Thursday, June 19, 2008

Customer experience is key - even in Ukraine

The Telco 2.0 blog is quickly becoming one of my favorites. Their analyses always combine broad, high-level, forward-thinking approaches to the mobile business with an in-depth understanding of the underlying technology that lead some really thought-provoking insights. That they tend to support my own views, albeit usually in more cogent and factual way, doesn't hurt either. ;-)

In this post from October 2007, the author makes three assertions about the mobile business that really resonate with me:

  1. Communication is king and presence is a prince; content merely provides ways to communicate. The 3 types of communication are: presence, storytelling, and information transfer. Focusing on one type like storytelling misses the bigger problem with how we communicate. I also surpised by the supporting statistic that global revenue from games, movies and music are less than that of SMS.

  2. The job of Nokia (and all device makers) is to create "fantastic user experiences" by helping the operators overcome structural issues and producing products that align with the current horizontal industry structure instead of trying to compete with them.

  3. Customer data and the customer relationship has great value. Mobile operators own that and the handset makers shouldn't try to muscle in on that area.

These intuitively make sense to me, and I have expressed similar opinions in my work, particularly with operators here in Ukraine. In my conversations with mobile operator folks here in Ukraine, I have also emphasized the untapped potential represented by creating a better user experience, exploiting messaging services like MMS and premium SMS, and partnering with content providers. I expressed in one of several articles I've written during the past year. There is huge short- and long-term revenue potential being forfeited here all for want some very basic and relatively inexpensive improvements. For example, I have yet to be able to send an MMS with my Nokia N73 despite several attempts at downloading the settings and talking to my operator's customer care reps. Practically every other mobile user I've complained to about this tells me they have the same problem, and have long since given up trying. Upon telling this to one of the managers at my operator, he suggested that it's because my particular phone was probably illegally sold on the market and thus my local operator's settings would not work on this phone. Yes, illegal phones on the market is a big problem in Ukraine, but I've asked both a content product manager and a senior network manager at two other operators here and both of them said that sounds very strange. I can see now that there is likely substantial intertia against fixing this problem within the operator, as they have created a culture to blame it on piracy rather than invest the resources to try and fix it either technologically or through better business processes.

None of my aforementioned articles are online but if you'd like to read them, please email me and I'll be glad to send them to you.

Needless to say, as far as I know, my opinions haven't particularly inspired anyone in the industry. I'm not particularly surprised since the operators have done quite well financially so far merely riding the wave of rising consumer incomes and strong economic growth with "status quo" or worse services. As a shareholder in the two leading Ukrainian mobile operators, I haven't had too much to complain about the past several years. But, as an industry marketing professional here in Ukraine, I would love to see this market become a leader for mobile innovation, a laboratory for new products and services that could actually be leveraged in other markets. Drug companies find Ukrainians good enough to test new drugs in clinical trials, the results of which can be applied to other world markets. Apparently not so with mobile services.

Quoth one of my friends who has lived in Ukraine continuously since we both arrived in 1997, "It's never easy." Truer words were never spoken about today's Ukraine. The past 17 tumultuous years have thrown almost every aspect of life into some level of chaos - families, politics, markets, communication. Life for the average Ukrainian is quite difficult to navigate, from finding out why your water or electricity has been shut off and when it will come back, to buying a car and getting what you ordered, to setting up your mobile phone to send MMS and email. So when something IS easy, people notice it.

However, the paradox of the Ukrainian consumer is that while they have been conditioned to accept poor quality service and products, they often haven't recognized or rewarded brands that offer good quality. And they have rarely been willing to pay extra for better quality, primarily due to low incomes of most people. Companies understandably wouldn't want to invest in new and improved products if they will not reap more profit from them?

But I contend that this is yesterday's thinking. Incomes are rising quickly, particularly in the major cities. These rising incomes are driven by more demanding jobs, which in turn makes time and convenience more valuable commodities to people. New competitors are entering the market constantly, each one doing something different, if not better, than the encumbants. This is particularly evident in the retail business, specifically supermarkets, restaurants and cafes. Consumer credit is flooding the market to allow people to buy more big - and even small - ticket items (maybe too many items). So today's marketer, particularly one in the communications business, has more and more freedom to innovate. No, not freedom. They have more and more an obligation to innovate. Expectations of upwardly-mobile Ukrainians are rising with their incomes, and they have more and more alternatives to choose from.

Ukrainians' rising expectations, just like those of consumers in other countries, require the operators, device makers, application developers, content providers, and all other contributors to the value chain to decide which business each one is in, and work together to improve the customer experience. Only then will the full potential of mobile communication be unlocked. But, as pointed out by Marek Pawlowski in his article on the MEX (which stands for mobile user experience) blog, the leading device makers and operators still have an identity crisis about which business they are actually in.


tobto said...

Just found your blog and must say, Tim, I've got a lot of useful info. Thanks!