‘When in Rome do as the Romans do.’ An old adage that telecoms firms would do well to pay attention to as they embark on their journey to transform themselves from communications service providers (CSPs) into digital service providers (DSPs).
So how can DSPs act like digital locals? The most important thing DSPs need to do is to understand the behaviour of digital consumers, and to ensure they design their habits, needs and wants into the business paradigm adopted. Wearing the right ‘garb’ – having the right look and feel – is vital. But being a digital local means not just dressing like a Roman but walking and talking like one too.
Talking the digital talk begins by understanding that fickleness, impulsiveness and spontaneity are a fundamental part of the digital zeitgeist. DSPs need to be able to respond to changes in customer behaviour and take advantage of digital natives’ desire for variety and novelty. Accepting that change and spontaneity are essential parts of the digital experience means (re)building processes and technology to support both continual change as well as impulsive behaviour.
Walking the digital walk, however, means that not only do DSPs need to be able to identify and respond to evolving customer needs and their demand for novelty and innovation, but they also have to be able to commercially exploit these opportunities once identified. This means being able to create a continuous conveyor of innovation and new products, as well as having the ability to monetise this innovation.
But, as much as DSPs struggle to increase their innovation velocity, variation and volume, they equally struggle to ensure that innovation value is fully optimised.
Part of the problem is that digital consumers expect a convenient, easy-to-use shopping experience for digital services and products. They want to buy what they want, how and when they want it. CSPs though currently only offer two payment options – prepaid and postpaid – both of which result from a legacy utility mindset and business paradigm rather than from a digital retailing perspective.
In order to meet the needs of digital consumers, and to compete with digital companies already offering these capabilities, DSPs will need to be able to provide a third payment option – ‘pay now’ capabilities.
Adding pay now not only expands the choice of payment methods but also supports impulsive purchasing of digital goods and services – obviating the inconvenience of having to use a prepaid balance for these goods and thus top up more frequently, and preventing bill shock scenarios resulting from an unexpected accumulation of charges for postpaid users.
It might seem radical to suggest the breaking of the prepaid/postpaid hegemony that has dominated the telecoms industry for so long, but DSPs need to come at the digital market with fresh eyes and not with old-fashioned thinking. Just because that’s the way it has been done for years in telecoms does not make it the right way to approach the digital market.
Bricks and mortar retailers have always offered pay-now capabilities – in fact this method is so normal that they simply call it ‘paying’ – and took this method with them when they ventured online, influencing the expectations of digital consumers. Pure-play digital companies also offer pay-now options and so, if DSPs are to avoid looking like a pasty Englishman on the beach or a loud American in a Hawaiian shirt on Oxford Street, they have to be able to support this option.
Supporting a pay-now model delivers a wide range of benefits for DSPs but arguably one of the most significant is that is challenges assumptions around who a customer is, the DSP’s relationship with them, their credit-worthiness and how you transact with them. Pay-now capabilities enable any customer to buy digital goods or services from the DSP, rather than a product range availability determined by the payment model (prepaid or postpaid). In fact, even ‘non-customers’ – i.e. those who have not previously bought from the DSP or who do not want a regular relationship with the DSP – can now buy in an ad hoc manner.
This is important because adopting pay now is not just about meeting customer expectations and getting revenue quicker, it’s also about opening up new customer demographics and new revenue-generating opportunities.
DSPs therefore need to recognise that success in the digital world requires them to dress, walk and talk like digital locals if they are to blend in and maximise their opportunities. A DSP is not simply a CSP with a fancy website and quad-play offering. Becoming a DSP requires a fresh approach if those awkward tourist moments are to be avoided!
6 Signs you’re a digital tourist:
- You only support the organised tours
You expect your customers to have an exclusive relationship with you and can’t accommodate their fickleness or the ability to sell to ‘non-customers’
- You fumble the money
You make it hard for customers to buy from you and only offer limited (legacy) payment options
- You wear a snowsuit to the beach
You have processes, systems and a business paradigm that are not designed for the digital world – they are too heavy and unwieldy
- You’re speaking a different language
The concepts, terminology and mindset you use has been adopted from your legacy business without any adjustment
- You dawdle in the street and walk on the wrong side of the pavement
Your payment and fulfilment options are not fast enough – the experience is too slow for the digital world and you put too many barriers in the way of purchasing (e.g. insistence on sign up and credit checks)
- You flaunt your wallet and wear designer brands in the wrong part of town
Your current processes and systems and too expensive for the digital world, making your digital business less profitable.
Click the link below to read Telesperience ‘Pay Now’ white paper from Teresa Cottam, and dive deeper ino the commercial benefits of offering paynow capabilities
Find Teresa on LinkedIn: https://www.linkedin.com/in/teresa-cottam-900597