Most of us would agree that differentiated products with additional value attributes are more likely to command a retail price premium than other products without such features. In the case of connectivity service products, that might include security features, quality of service mechanisms, pricing innovations, location awareness or other features.
The trick always is “monetization.” or customer willingness to pay. How can providers of such additional or enhanced features generate incremental revenue? Direct pricing for use of such features is the direct method. But customers might refuse to pay extra for coverage or voice quality or even service continuity, in most cases.
To be sure, the claim that “our network is better” or “only available from us” are logical or sometimes strong marketing platforms. Both claims are hard to substantiate in highly-competitive markets with competent competitors all using the same technology platforms and suppliers.
So, as always, the issue for marketers is that potential buyers have to be convinced there is “something here of additional value” that is worth paying for. Price always matters. But how much value buyers place on various other features is less clear.
Past industry experience suggests most mobile service customers will not pay extra for voice quality on calls or coverage, in a direct fashion. People only expect the ability to make and receive calls, send and receive messages and use the network mostly everywhere they are. Up to this point consumers have not been offered service at varying data speeds, dynamic pricing of usage or other quality of service metrics.
In practice, there can be service level differences based on whether service is purchased from a provider that owns its own network, compared to service from mobile virtual network operators who do not own their own networks.
And there are additional ways to showcase differentiated value among service plans. Perhaps lower-priced plans have limitations on hotspot data usage while higher-priced plans do not have such limitations.
More common ways of differentiating consumer mobility plans are the use of other non-network-related values and features, such as bundling video streaming service access.
Even so, it sometimes is hard to measure the direct impact of any specific feature on new account gains, reduced account churn or higher average revenue per account. Sometimes 5G access is bundled with higher-priced service plans that also feature unlimited usage.
In such cases, it will be hard to unravel whether it was the unlimited usage or the 5G that drove incremental growth.
No comments:
Post a Comment