Average Revenue Per User (ARPU) is one of the most popular metrics the telecom industry worldwide uses to determine the revenue generated across its massive customer base. According to Statista, the global ARPU in the telco services market is likely to increase perpetually between 2023 and 2028 by a total USD11.6 (plus 6.25 percent). The revenue per user is predicted to amount to USD 197.23 in the year 2028.
However, the ARPU growth might get adversely affected by the economic uncertainty prevailing across the world. As warned by Analysys Mason earlier this year, the telecom industry as a whole might face tricky times as a result of economic difficulties and existing market pressures finding it difficult to maintain their average revenue per user.
Despite the widespread adoption of smartphones, tablets, and mobile networks worldwide, telcos are grappling with a significant challenge in improving their ARPUs. The decline in revenue from core services like voice and text has outweighed the increase in data revenue, leading to a notable erosion of ARPU.
The challenge faced by telcos extends beyond their size or geographic location and affects the entire industry. Intensified competition among operators, market saturation, cannibalization, and the rise of over-the-top (OTT) players have had a significant impact on telcos, resulting in reduced revenue realization and increased churn. OTT players fiercely compete with telcos in core areas such as voice, text, and data, consistently rolling out innovative and appealing apps and solutions that effortlessly capture a large portion of the mass market.
To address these challenges and improve their ARPU, telcos should focus on key strategies such as diversification, innovation, customer experience enhancement, synergy-building, identifying crucial partnerships, targeting growth in specific market segments, and leveraging insights from data. These strategies are essential components that telcos should integrate into their ARPU strategies.
They need to explore and implement high-impact strategies and breakthrough technologies like moLotus mobile video customer interaction platform that can effectively enhance customer acquisition, reduce churn, sustain and expand their subscriber base, and ultimately improve the average revenue generated per user by 2 to 4 percent. Traditional approaches such as offering incentives in data plans, lowering tariff rates, social media advertising, etc. may yield short-term benefits, but they are unlikely to offer a sustainable solution for telcos in the long run.
Big telecom players like Vodafone, Indosat Ooredoo, Hutchinson, Airtel, Celcom, etc. are evolving at an unprecedented pace, with increasing competition and changing consumer demands. They are continuously seeking ways to boost consumer revenues and stay ahead in this dynamic landscape. Here are the top five strategies that telcos can employ to maximize consumer revenues and thrive in the industry.
1. Automating & Transforming Customer Experience
One of the most effective ways to boost consumer revenues is by focusing on enhancing the overall customer experience. Telcos need to prioritize customer satisfaction and build long-lasting relationships. Providing seamless experiences across all the touchpoints is essential.
To achieve this, telcos should invest in responsive interfaces and intuitive self-service digital platforms. By allowing customers to effortlessly access services, telecom providers can reduce churn and encourage upselling opportunities.
Moreover, proactive customer support and quick issue resolution play a crucial role in ensuring a positive experience. Telcos need to leverage advanced mobile technologies such as moLotus, AI-powered chatbots and intelligent virtual assistants to provide real time support, addressing feedback, customer queries and concerns promptly.
Ever since the global outbreak of the Covid-19 pandemic, customers have been preferring digital over face-to-face customer assistance. Additionally, customers now expect swift and efficient services, and any delays in operational processes are not tolerated. Telcos need to be more determined than ever to overcome these obstacles. They should automate various customer processes such as document submission, order processing, and customer service.
To address these complexities, several telecom brands are turning to automation tools that can streamline processes and boost ARPU. Tools like Marketo, moLotus, and Hubspot are playing a crucial role in automating customer processes, making them faster, more convenient, and hassle-free. The advanced automation capabilities of the moLotus platform and technology are being utilized to automate various telco customer processes, including onboarding, reminders, thank you communications, and more. This automation not only reduces costs but also enhances consumer revenue and improves customer engagement.
Telcos are building enduring relationships with millennials by leveraging moLotus's transformative capabilities, such as digital rewards, Frequently Asked Questions (FAQs), real-time customer ratings, mobile reminders, instructional content, and mobile feedback channels. Research indicates that moLotus has reduced outbound process costs for telcos by up to thirty percent while simultaneously improving customer satisfaction levels.
2. Data-Driven Customer Communication
Utilizing data-driven personalization techniques is a game-changer for boosting consumer revenues in the telecom industry. By leveraging customer data, telecom providers can deliver targeted and relevant offers to their subscribers. Analyzing customer behavior, preferences, and usage patterns allows telcos to create tailored packages and promotions that resonate with individual consumers.
Telcos can design and deliver personalized plans, services and interactions to the unique needs and preferences of individual customers. Way to personalize communication is via analyzing data such as location data, and usage patterns. It allows telcos to gain deeper insight into their customer preferences. This info can be used to offer personalized discounts, promotions, and recommendations. This can add to customer loyalty and customer lifetime value, ultimately driving higher ARPU. Telcos should start by segmenting their customer base based on factors such as usage patterns, languages, demographics, and preferences using tools like moLotus. Subsequently, they can then create and offer personalized plans and services for each segment and finally individual customers.
Several telcos are striving to differentiate themselves from competitors and establish stronger relationships with their customers. In a telecom industry outlook report by Deloitte, it was highlighted that many customers perceive minimal differences in performance among their service providers. Telecom businesses often target customers with similar offerings, lacking sufficient differentiation. Attracting, delighting, acquiring, and retaining consumers now requires telcos to adopt rapid, data-driven, customer-centric, personalized, and ever-changing campaigns. Research indicates that telcos excelling in personalization generate forty percent more revenue than their counterparts.
Hyper-personalization, facilitated by tools like moLotus, will be a vital catalyst for ARPU growth in a saturated and highly competitive telecom market. By utilizing customer data assets and analytics through moLotus, telcos can transform their approach to customer lifecycle value management. They have begun leveraging customer data to deliver hyper-personalized recommendations, offers, and messages tailored to individual customers, including special occasions like birthdays, anniversaries, and festivals.
Customer interaction is an area where telcos should work upon to boost ARPU. Tech-savvy customers are increasingly gravitating towards telcos that prioritize interactive communication through innovative mobile technologies like moLotus. This technology offers various customer response options, including SMS, Web links, USSD, Call-backs, and mgrams. moLotus transforms telco-customer communication, making it real-time, mobile-friendly, seamless, easily accessible, simple, and engaging.
3. Building Efficiency Through Tech Partnerships
To boost ARPU, telcos must keep pace with emerging technologies and embrace innovative solutions. Technologies such as 5G, artificial intelligence, and mobile ad tech can transform the way telecom providers engage with their customers and generate revenues.
The advent of 5G opens up new possibilities for delivering high-speed, low-latency services. Telcos can leverage new technologies to offer enhanced consumer experiences via immersive mobile videos, and innovative mobile solutions. Mobile advertising technologies enable them to tap into new revenue streams and cater to evolving consumer demands. Automation and artificial intelligence-based tools can revolutionize customer support and engagement. This not only improves efficiency but also enhances consumer satisfaction and drives consumer revenues.
Telcos such as Indosat Ooredoo Hutchison, Vodafone, Celcom, Airtel, Maxis, and others are increasingly collaborating and forming partnerships with mobile technology leaders like moLotus to enhance their presence in the enterprise business sector. This collaboration has become a vital element of their marketing mix and overall transformation strategy. In Indonesia, for example, moLotus has joined forces with Indosat Ooredoo Hutchison to launch the iAds-MGram service, powered by moLotus. The iAds-MGram campaigns have been highly effective in increasing lead generation, conversion rates, customer responses, and acquiring new customers, resulting in immediate revenue growth with high margins.
By bundling telecom services with high-quality content, telcos can attract new customers and encourage existing subscribers to upgrade their plans. This strategy increases ARPU by providing customers with additional value and entertainment options, thereby reducing churn and increasing consumer revenues.
4. Upselling & Cross-selling
Upselling and cross-selling are effective strategies that can significantly boost ARPU in the telecom industry. By leveraging these techniques, telcos can increase customer spending, enhance customer satisfaction, and ultimately drive revenue growth. According to Hubspot, 72 percent of sales professionals who upsell and 74 percent who cross-sell are of the opinion that the strategies boost up to 30 percent of their consumer revenue.
Upselling involves persuading customers to upgrade their existing telecom services or products to higher-tier options with additional features, benefits, or increased usage limits. This strategy encourages customers to spend more by offering them upgrades that align with their evolving needs and preferences. For example, a telecom company might entice a customer to upgrade from a basic mobile data plan to a premium plan with higher data limits, faster speeds, and additional perks such as free content streaming services. By upselling, telecoms not only increase the ARPU of individual customers but also cultivate long-term loyalty and satisfaction.
Cross-selling, on the other hand, focuses on promoting complementary products or services to existing customers. Telcos have a wide range of offerings beyond basic voice and data plans, including value-added services. Through cross-selling, telcos can capitalize on their existing customer base by promoting these additional services. For example, a customer who has subscribed to a mobile plan might be targeted with an offer to add a discounted subscription to a music streaming service. This not only creates more revenue but also boosts customer relationships.
To effectively execute upselling and cross-selling strategies requires a deep understanding of customer preferences, behavior, and usage patterns and a digital marketing tool for running suitable upsell and cross-sell campaigns. Telecom brands should leverage customer data and advanced analytics to identify upsell and cross-sell opportunities. By analyzing customer usage patterns, demographics, and purchase history, telecom providers can run upselling and cross-selling offers and recommendations.
Telcos have been leveraging multiple channels such as social media, call centers, and retail stores to reach customers with upsell and cross-sell offers and promotions, however with less likelihood of upsell and cross-sell success.
A new technology like moLotus is fast replacing those channels playing a vital role in facilitating upselling and cross-selling initiatives. By capturing and analyzing customer data, moLotus enables telcos to identify upsell or cross-sell opportunities, track customer interactions, run unique upselling and cross-selling campaigns and measure the success of the campaigns, enabling telcos to boost their consumer revenue generation efforts.
moLotus upselling and cross-selling campaigns not only drive immediate consumer revenue growth but also have long-term benefits for telcos. By increasing customer spending and engagement, these campaigns improve customer retention and reduce churn rates. Satisfied telco customers who have been successfully upsold or cross-sold are more likely to remain loyal and recommend the telecom brands to others, leading to additional ARPU through referrals and positive word-of-mouth.
5. Diversification & Scaling
Diversification and scaling are two vital strategies that can significantly boost ARPU in the telecom industry. By expanding their offerings and globally scaling their operations, telcos can tap into new revenue streams, attract a larger customer base, and ultimately drive higher ARPU.
Diversification involves expanding the range of products, services, and solutions offered by telcos. By diversifying their offerings, telecom brands can cater to a broader range of customer needs and preferences, capturing additional revenue opportunities. For example, a telecom company that traditionally focused on providing voice and data services may choose to diversify into value-added services such as cloud storage. This expansion into new areas not only generates additional revenue but also enhances the overall customer experience and engagement.
Diversification also allows telcos to target different customer segments and industry verticals. By tailoring specific solutions for business customers, enterprise clients, or niche markets, telecom brands can unlock new revenue streams with higher ARPU potential. For instance, offering specialized mobile advertising solutions for industries like healthcare, ecommerce, or automobiles can lead to increased ARPU as customers in these sectors have unique requirements and are willing to pay a premium for personalized services.
Scaling, on the other hand, focuses on expanding the reach and capacity of telecom operations. This includes upgrading infra, and enhancing service capabilities to accommodate a larger customer base. Scaling allows telcos to serve more customers without compromising on service quality, thus driving revenue growth and higher ARPU. By scaling, telcos can attract new customers in previously underserved areas and capture additional market share.
To effectively diversify and scale, telcos need to adopt a strategic approach via technologies. This involves conducting market research, identifying growth opportunities, and aligning the diversification and scaling strategies with the telco's overall vision and capabilities. Telecom brands should evaluate market trends, customer demands, and competitive landscapes to identify areas where diversification and scaling can create a competitive advantage and drive higher ARPU.
Marketing tools like moLotus, Zapier, Expandi.io, HubSpot, InMobi, etc. are assisting telcos to diversify and scale by increasing customer demand, reaching out to global customers, and diversifying business. Globally scalable moLotus campaigns stand out in reaching millions of customers daily just in a few seconds on their mobile devices irrespective of phone type - feature phone, smartphone, and i-phone or phone model.
Experts advise telecom brands to invest in moLotus for launching new products and services, offering innovative go-to-market strategy. The strategy includes a cluster of marketing activities that ensure a telco product’s entry into the market with success in just three months. Big telcos are using moLotus go-to-market strategy for different kinds of product launches - new product entry, rebranding of existing products, new iterations of existing products, etc. By expanding their offerings and scaling their operations via moLotus, telcos can tap into new revenue streams, attract a larger customer base, and drive higher ARPU.
Conclusion
Boosting consumer revenues in the telecom industry requires a comprehensive approach that focuses on enhancing customer experience, leveraging data-driven personalization, offering attractive content bundles, and embracing new technologies like moLotus. By implementing these strategies, telcos can maximize consumer revenues, strengthen customer loyalty, and thrive in the ever-evolving industry landscape. Staying ahead in this competitive market requires continuous innovation and a customer-centric mindset. Telecom providers that invest in these strategies will position themselves for long-term success and growth in the industry.
