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Mobile Upgrade Strategies - Justification & Best Practice

In the current paper, we present the results of a detailed analysis of mobile operator upgrade policies in one of Europe's most competitive markets, the UK. This is supplemented with some insights from two of Europes' other major markets, Germany and Italy. The current paper provides insights into mobile handset upgrade methods and best practices for 'contract' consumer customers.

We analyse how upgrades impact the economics of Customer Lifetime Value (CLV), and show how operators can influence this. Operator motivations for upgrading are explored in detail. Dealer commissions and handset prices at the point of upgrade are also compared in an effort to understand how channels are motivated to upgrade customers.

Specifically, the current paper answers the following questions:

• What are the processes of upgrading?
• What are the best practices for upgrading?
• What are the dealer commissions for new connections versus upgrades?
• What operator policies have emerged from our discussions with them?
• What are the economic and customer drivers behind upgrading?
• What constraints do the operators experience?
• Which initiatives can we recommend to operators to optimise the impact of their upgrade strategy?
• What alternatives are there to an upgrade strategy?

Price: EUR 1,250.00 / GBP 1,000.00

if you would like learn more about this report, or our other work in this topic area and how to subscribe, please contact us

1
Introduction
1

1.1
Objectives
2

1.2
Methodology
2

2
Lifetime of customer
3

2.1
Subscriber Acquisition Cost
4

2.2
Subscriber Retention Cost
5

3
The Upgrade process
9

3.1
Customer segmentation
9

3.2
Channel Option Types
9

3.3
Active Upgrade Methods
10

3.3.1
Company texts customer
10

3.3.2
Company calls customer
11

3.3.3
Company outsources to a 3rd party
11

3.3.4
Shop/dealer
11

3.4
Passive Upgrade Methods
12

3.4.1
Website
12

3.4.2
Customer calls operator
12

3.5
Upgrade Mechanisms
13

3.5.1
Comparison between Italy and the UK
13

3.5.2
Upgrade Opportunities
13

3.6
Issues and Problems
14

3.6.1
Commission structures
14

3.6.2
Too Late to upgrade
14

3.6.3
Inefficient dealer retention commission process
14

3.6.4
Handset devaluation
15

3.7
Touch point
15

4
Case Illustrations
16

5
Best & Poor Practices
18

5.1
Best practice details
18

5.1.1
Website upgrading
18

5.1.2
Early upgrade approach
19

5.1.3
Dedicated CSR
20

5.1.4
Sophisticated customer segmentation
20

5.1.5
Upgrade Bonuses Vs Airtime Revenue Share
20

5.1.6
Operator shop chains
21

5.1.7
Next day upgrade and activation
21

5.1.8
Contract buy-out
21

6
Commissions and Prices
21

7
Drivers for Upgrading
23

7.1
Main drivers
23

7.2
Churn
24

7.3
ARPU
24

7.4
Value Added Services
24

8
Innovations & Recommendations
24