[June 20, 2001]

Lessons Learned In Asia: Keeping Wireless Customers Happy  

BY JEFFREY STOCKTON

Growing Pains
For DoCoMo's i-mode service, demand was greater than supply. What was originally "an experiment" grew into a modern day cultural icon attracting a million new adopters per month. However, from the i-mode backbone to the networks of the individual services that ride on it, much of the system's infrastructure was inadequately prepared to cope with the massive demand, especially with the peak-usage surges that occurred during commuting hours.

In fact, during the spring of 2000, DoCoMo had to halt sales and advertising of i-mode because the demand was too great. Many of the larger content sites faced similar problems stemming from inadequate infrastructure. One of the core deficiencies of many i-mode service providers (SPs) was a lack of automated customer care, billing, and revenue-management software. Swamped with unprecedented demand, many of these providers faced customer management nightmares that hindered growth and decreased profits.

There are hundreds of services that utilize the i-mode platform, ranging from horoscope and dating sites to finance, news, and sales force automation services. Many of these paid-content sites and services take advantage of DoCoMo's proprietary customer care and billing system. It offers companies three flat-rate monthly billing options and a very limited customer care functionality. This type of service is nothing new -- it is similar to 900-number phone services. The telco bills the customer by adding the charge directly to their monthly phone bills.

The advantage of DoCoMo's service bureau invoicing system is that the SP doesn't have to worry about any aspects of billing. DoCoMo tacks on the SP's monthly charge to the subscriber's i-mode bill and remits payment to the provider after subtracting i-mode's nine percent service fee. DoCoMo also handles all customer inquiries relating to billing. The disadvantages of this service include billing limitations, separated data, inability to leverage billing and customer information for marketing purposes, and fragmented customer care.

The Architecture Of Support
Regardless of the level of complexity of service or pricing plans, large SPs usually need customized customer care and billing software to enable marketing and customer care flexibility. By utilizing a service bureau for invoicing, companies relinquish the immense advantages of binding customer interaction with billing data. A centralized billing database contains a wealth of information, which can be used to base marketing and customer retention campaigns. For example, customer demographic information collected during registration -- such as age, household income, and interests -- can be leveraged in marketing campaigns. Customer retention programs via database marketing also require intimate access to billing information, service-level data, personal information, and individual preferences.

While many i-mode SPs gradually realized that they couldn't effectively leverage their existing customers without an easily accessible and centralized customer database, there were i-mode SPs that knew from the start that DoCoMo's invoicing system wouldn't work for them, citing many of the preceding limitations.

These SPs realized they had need for more robust customer care and billing capabilities than the proprietary DoCoMo system offered. Despite the advanced hardware and front-end technologies, the industry, in general, in Japan was decidedly behind the times when it came to operational and business support systems infrastructure, and the wireless Internet business was probably the one market that could easily highlight the antiquated business software.

In fact, several large wireless content providers were running their businesses using only Excel spreadsheets. Each business division -- billing, customer care, tech support, and marketing -- kept departmental information on its own spreadsheets. Other service providers used multiple fragmented systems in each department. For example, an application for billing, a separate one for accounting, another one for order management, and so forth. Every department had a very narrow view of the customer: The billing department only had information regarding a customer's billing history while the customer service department only had information detailing the client's customer service history. The information could not be shared easily between departments. This separation of vital customer information resulted in poor resolution of customer inquiries and created problems that required labor-intensive multi-departmental cooperation. For example, before issuing a credit to a customer complaining about a service outage, a customer service representative (CSR) first needed to confirm with billing that the client had paid through, then contact tech support to confirm the technical difficulty.

It got so bad that one company issued automatic refunds when a customer called to complain -- no matter the complaint -- because the cost of researching the complaint would exceed the cost of the refund.

Inefficiencies also stemmed from redundant data entry. Whenever a new customer was added, every department created separate records with some of the same information overlapping in each one. At the end of the customer lifecycle, every department had to delete the customer record, or risk revenue leakage through accidentally extended service.

Help Customers Help Themselves
Lack of automated processes is another stumbling block ISPs face in attaining scalability. Providers that cannot have customers drive their own routine inquiries, new service registrations, and account modifications have problems managing operational costs, responding to customer needs quickly, and maintaining business agility.

Given the demand for their services and their existing customer care software, i-mode service providers were faced with two immediate choices. They could maintain a high level of customer service by reducing their rate of growth or they could exploit the demand for their services to the maximum by scaling at a rate faster than their infrastructure was capable of supporting.

Most i-mode providers realized the importance of maintaining customer loyalty, and reduced demand by ceasing advertising and promotional activity. However, they also realized that they could grow at an even faster pace by implementing more advanced business infrastructure software.

The goal of any SP is to create a business infrastructure that minimizes the number of support personnel for every new customer added. Automating as many repetitive processes as possible such as registration, trouble-ticket management, and marketing, while streamlining those inquiries that do require a CSR or tech support intervention are essential to achieving this goal.

In the case of i-mode, SPs implemented systems that allowed subscribers to wirelessly -- from their mobile device -- sign up for new services, upgrade or downgrade existing services, change their user and billing information, view current usage, look at their billing history, and pull up a FAQ/knowledgebase that contains solutions and answers to common problems and questions.

They also integrated all customer- and service-level data into a single database, which powers all customer-centric functions of the business systems environment. The new database let personnel across the enterprise use the same client application and access the exact same data, eliminating redundant data entry and enabling superior customer support. The result: If a customer calls tech support complaining of a service problem, the support engineer can take notes, assign a case number to the incident, and relate it to the customer's database file. If the customer later calls customer support to claim a service credit for the incident, the CSR has instant access to the incident report in addition to any other relevant account details, such as billing and customer support history. Using this information, the CSR can immediately verify whether or not the customer qualifies for a service credit.

The Soft Sell
Besides being able to efficiently handle customers, i-mode SPs also found it necessary to effectively manage services. In an extremely dynamic market environment largely based on fads, SPs needed to quickly identify killer i-mode services and rapidly develop, market, and implement them.

The software many i-mode SPs use today allows them access to detailed reporting and analytical statistics that can be used to determine customer preferences, and therefore help them build new services and value propositions for customers. After rolling out a new service, SPs can upsell or cross sell the service to their existing customer base using sophisticated database marketing. For example, if the popular Japanese toy maker and i-mode content provider Bandai rolled out a new online game based on the popular animated feature Akira, it could easily initiate a marketing campaign targeting consumers it believed would be most interested in the new game. This could be based on multiple criteria. Perhaps Bandai has customers who have played a similar game or maybe some of their customers subscribe to an animated movie newsletter. Bandai would target these existing customers, because they fall into its market constituency for this new service.

From the start, i-mode was an unanticipated success. Initially, SPs were ill prepared to cope with the massive demand. Their inability to manage customer services effectively, coupled with their reliance on non-automated tasks slowed growth. But as new business software was implemented, SPs were able to keep up with demand. Today, i-mode is thriving and poised to expand to other parts of Asia, the United States, and Europe. The hype surrounding competing technologies and the advent of third-generation wireless (3G) technology has prompted SPs around the world to look at i-mode as a case study for managing rapid growth.

Learning A Lesson From i-mode
According to Cahners In-Stat Group, the number of wireless data subscribers worldwide will rise to 1.3 billion in 2004. Today, wireless SPs are ensuring their operating and business support systems (OSS/BSS) are in place well before they begin providing services. Many i-mode SPs were lucky. There was a novelty factor that enabled them to survive tumultuous periods without a decent business infrastructure. Wireless SPs entering the market today have no such luxury. If customer service is bad, customers will simply terminate the service.

As the wireless Internet gains new users and matures, customers have increasingly higher expectations in terms of system reliability and customer care. The market is also becoming more competitive, making business intelligence capability and marketing campaign management vital components of overall business strategy.

This situation of evolving businesses and evolving technology roughly parallels that of most Internet service sectors. ISPs, content providers, and Web hosting companies faced similar situations, moving from inefficient labor-intensive business processes to platforms so automated that seemingly nothing needs to be done by humans. Internet penetration is already so high in the United States and Europe that it is unlikely that there will be a mass exodus to a single Internet platform, whether it be fixed-wired or wireless. Still, the i-mode example is an important lesson for SPs in developing countries and other parts of Asia, particularly China, where costs for Internet services are rapidly declining relative to disposable income.

Much of the technology originally developed to power business functions at wireless SPs is exportable back to providers of traditional Internet services, such as ISPs, ASPs, Web hosts, and content providers. One of the key demands of wireless SPs has been the ability to rapidly roll out new services, complete with unique pricing structures, business rules, collection methods, and customer service processes. Traditionally, it has taken days, if not weeks, to configure complex new Internet services. This was usually satisfactory because, once configured, most services remained in place for a long time. However, wireless services are largely consumer and entertainment-oriented, and are often subjected to the dynamic fad-driven demands of the marketplace. As a result, services that are hot today may be unpopular in several weeks. 

Companies must develop advanced configuration applications that facilitate the process of setting up a new service. This technology will help traditional Internet companies be more receptive to market trends and customer preferences as the marketplace becomes increasingly competitive, and providers search for new ways to differentiate themselves and add value to their offerings.

Jeff Stockton is the corporate communications manager of Inovaware Corporation. Inovaware is a supplier of billing and customer care solutions for providers of Internet and next-generation communications services and a provider of customer-centric business infrastructure software for Internet service businesses. Through its Synchronized Business Infrastructure (SBI), Inovaware integrates the complex billing, customer management, customer support, and sales and marketing aspects of Internet businesses into one seamless functional unit.