The cellular telecoms business is probably the most successful business ever, he adds. Demand for mobile phones and SIM cards is universal, even amongst those who today do not have access to, or cannot afford to join the ever-expanding mobile community. But in a rapidly saturating market, with competition intensifying, mobile operators are finding it increasingly difficult to hang on to their customers.
Churn rates are estimated to be between 15 percent and 25 percent, meaning that any given operator is losing up to a quarter of its customer base to a competitor every year. Furthermore the launch of new, advanced data services, using technologies such as GPRS, MMS and 3G are not being met with the same enthusiasm experienced with traditional voice and SMS services.
Mobile operators are finally being forced to focus on actively retaining customers and growing the average revenue per user (ARPU).
"Operators need to ensure that they are not doing anything to chase their customers away, and, at the same time, give them reasons to stay," says James.
Research conducted by The Yankee Group and Accenture shows that:
-- 82 percent of customers change their operator, due to a product or service problem, and the operator's inability to deal with it effectively;
-- One frustrated customer will tell 13 other people;
-- For every person that calls with a problem there are 29 others who never call;
-- 90 percent of customers will not complain, they will simply leave once they become dissatisfied.
There is also evidence that high-spending customers are more likely to switch operator than low spending customers, given that high-spenders have greater expectations of their operator.
"At present there is very little difference between operators -- each offers similar services (phone, voice, SMS, data connectivity) at very similar rates. Often the biggest differentiator between operators today is the color of their brand!
"Operators need to start defining more clearly who their customers are, and then target them effectively with packages that are tailor-made to meet their needs. Cell C's CY community is a good example. It is targeted at the youth market, and gives members benefits like R20 free airtime, 10 SMS and five ring tones free every month, as well as VIP treatment on the CY Web site.
"There is a lot of room to create uniqueness here. Operators need to stand for something and then use that to create brand strength and loyalty.
"With the latest billing systems, operators can create packages for individual users depending on who they are calling. For example, a package for students that gives them a 50 percent discount on calls to other students or lecturers. Users need to feel the operator is giving them something, and that they are not just another number paying for services every month."
Attracting the big spenders
According to Pyramid Research, average ARPU in SA has decreased from just under US$30 per user in mid-2004 to an estimated $20 in 2006 and is expected to drop further, to around $15 per user by 2010.
"Attracting high spending customers is not easy, but it is probably true that high-end churners are most likely to be dissatisfied customers of a competitor, so operators need to consider:
-- Targeting corporate customers with dedicated account managers;
-- Offering a personal service and tailor-made solutions for SMEs;
-- Ensuring that the critical first contact with individuals is a positive one, whether in the operator's shop or via its call center.
"It comes down to customer service -- you need to treat high-spending customers differently -- meet with them and talk to them. These customers tend to be business users, so offer quality business packages with VIP treatment included -- like the fast track queues offered to business class customers at airports," James adds.
Driving revenues
There is much mobile operators can do to boost revenues from their customers. Persuading people to talk more may be tricky, but research by Ericsson shows that 20 percent to 30 percent of calls made are not even completed due to the other party being unavailable or busy on the line. Simple services, such as voice mail and call waiting, ensure that calls are not missed, which benefits both customers and operators.
"SMS has taken off in Europe and SA, but we see that it has not been as widely adopted in Africa, where the culture is towards oral communication. Operators need to educate users as to the services that are on offer, how to use them and what benefits they offer. Additionally, if users' phones are not preconfigured for more advanced services, most will not bother even trying to access them. Operators in Africa are now seeing the benefits of automatic (over the air) handset configuration, which drives usage and saves money by reducing the number of calls to the call center."
The cellular industry has been a phenomenal success throughout the world, and will undoubtedly continue to be so. But mobile operators must start to become much more customer-oriented if they are to retain their privileged position. James concludes with a quote by Mahatma Gandhi, who said: "We are not doing our customers a favor by serving them; they are doing us a favor by giving us an opportunity to do so."