Meeting the Needs of the ‘Now’ Generation

We are part of the ‘now’ generation. Unlike previous generations, we are accustomed to receiving what we want when we want it. If we want to buy stock, we expect confirmation of our trade in seconds. If we want to buy an airline ticket, we expect a complete itinerary and electronic tickets in seconds. If we want a book, no matter how obscure, we expect to find it online in minutes if not in seconds. If we don’t get what we want in real-time, it’s not soon enough.

Most industries have embraced new technologies capable of meeting the demands of the ‘now’ generation. Let’s take a few minutes, however, to consider how different the world would be if that technology was not available. What might life be like if we were forced to return to the types of technology available 30 or even 40 years ago?

First, let’s imagine that a marketing manager at the local supermarket wants to understand the shopping habits of local consumers and, based on the results, launch some product promotions. After analyzing large volumes of data, she realizes that many shoppers who buy chips also buy salsa. As a result of the discovery, her company embarks on an extensive direct-mail campaign offering everyone who recently purchased chips a discount coupon for salsa.

Next, let’s imagine an airline that decides to adjust pricing to fill seats on its planes. An analysis of historical data reveals that the average capacity of a passenger plane fell in June by two percent. As a result, the marketing department decides to cut fares in August to stimulate more business and to fill more seats.

Finally, let’s imagine that a local bank, at the end of each month, compiles a list of credit card purchases made by its customers. Purchases made overseas, which tend to be large business expenses, do not appear on the list for several weeks. For each customer, the bank produces a statement and sends out an itemized bill. Unfortunately, many customers have spent more than they intended and are unable to pay.

Thank goodness we don’t have to live with technology from the 1960s and 1970s. Customers would be frustrated, suppliers would leave money on the table, and the growth of many industries would be stifled.

In the wireless telephone industry, however, we do live with technology from another era. Customers do become frustrated; service providers do leave money on the table because of primitive marketing practices and industry growth is stifled because of rudimentary debt management policies. We have yet to realize that real-time billing is essential to the continued growth and profitability of our industry.

Let’s look again at the three scenarios, understand how the latest technology is used to support industry needs, and consider how real-time billing technology can be used to deliver the same features in our industry.

Supermarkets use technology to take good advantage of the natural link between products. When a consumer purchases a bag of chips, he is presented automatically with a discount coupon for salsa. The store uses technology to take advantage of the customer’s point of purchase. At the very moment the customer makes the decision to buy chips, an attempt is made to build on that decision and to secure the purchase of salsa. The results include more sales, more revenue, more profit, and happy customers who will want to return to the store.

In today’s wireless telephone industry, service providers are leaving money on the table. When customers purchase a ring tone, they should be presented with a discount coupon for a related service, such as a music video. Unfortunately, we are not taking advantage of the buying moment to increase sales. Instead, we analyze historical data and make offers based on out-of-date information. The teenager who purchases a ring tone from a popular artist today may not be interested in a music video featuring that same artist in one month’s time. The buying moment is over.

Real-time billing technology is available today and can be used to deliver instant promotions to the ‘now’ generation. The system knows when a purchase is made and can use short messages and other mechanisms to present the buyer with a related offer in real-time. If applied sensitively and intelligently, dynamic marketing techniques based on real-time billing information can change the face of our industry.

The airlines operate one of the most sophisticated pricing mechanisms in the world. The price of an airline ticket can vary from one minute to the next. It depends on demand, competitor pricing, and available capacity. By analyzing data in real-time, the airlines are able to adjust pricing to make the best use of their resources.

In the wireless telephone industry, operators have available capacity too. Through the judicious use of discounts, bonuses, and other promotions, they could make much better use of the network when call volumes are low. If demand is high, end users should expect to pay standard calling rates; if demand is falling, they should be encouraged to make more calls and to buy more services by the clever application of real-time discounts. Instead, we analyze monthly usage totals from the past and encourage users to convert from one static plan to another, regardless of the utilization of today’s network.

Real-time billing technology is available today, and it is capable of delivering dynamic pricing options. It knows how many calls are placed during every minute of every day and hence knows the current utilization of the network. The more sophisticated products offer a wide range of promotional capabilities, including discounts, free but time-constrained calling credit, and loyalty points. Capacity-based pricing schemes based on real-time billing information can change the face of our industry.

Banks are the experts at managing credit risk. This is their core business, and we can learn a lot from their practices. At the most basic level, every credit card user is assigned a personal credit limit. If a user demonstrates the ability to consistently pay on time, her credit limit might be increased. If another user begins to struggle with payments, her credit limit might be reduced. The most risky users are not offered credit cards but debit cards, and they can spend only what has been “prepaid” into their bank account. Whether a debit card or credit card account, all transactions are authorized in real-time and the new balance is calculated immediately. This is true no matter where in the world a purchase is made.

In the wireless telephone industry, we refuse to accept the banks’ approach to credit management. Instead, we cling to a time-consuming, leaky, fragile, inflexible, and expensive approach to billing. The results are frightening:

• Wireless users do not know how much they spend at the time they purchase services and are often shocked at the size of the bill. This leads to bad debt, increased collection overhead, an increase in the number of calls to Customer Care, and dissatisfied customers.
• The gap between the amount of revenue that should be collected and the amount of revenue that actually is collected is unacceptably high and is predicted to get higher as new data services are introduced. Even by the most conservative estimates, billions of dollars are lost every year as a result of revenue leakage.
• The problems are exaggerated for roaming users. Not only do they not know how much they are being charged, but many operators are not aware of roaming usage for days or even weeks. One operator writes off many millions of dollars every year because of fraud based on processing delays associated with roaming.
• Every operator in the world is pushing for higher revenues per user. Without more effective debt management procedures in place, this translates into even more bad debt.
• Due to the inflexibility of traditional billing systems, it can take an age and cost a fortune for operators to introduce new data services. This inflexibility complicates the issue of debt management and means that operators must charge flat rates for new services – not the most profitable pricing scheme.

It doesn’t have to be this way. Real-time billing technology is available today, and it can be used to implement more stringent debt management procedures. It can authorize all service requests in real-time and can impose a personal credit limit on every user account. Credit limits can be adjusted based on payment history, and new services can be billed without the need for expensive software customization.

It takes time and very careful planning to introduce real-time billing elements to a legacy billing environment. Nonetheless, the results can be staggering. It is gratifying to hear the comments of operators from around the world who have installed the Comverse Real-Time Billing system: the costs of billing and IT are a fraction of other operators in the region, and revenues have soared as a result of the rapid and flexible introduction of new services. Revenue leakage numbers have been slashed, and end users can access usage information in real-time. It’s a whole new world!

Our industry is one of the last to meet the needs of the ‘now’ generation. The good news is that the technology is now in place to change that.