Operator Loyalty Reward Programs: Are OSS/BSS Suppliers Missing a Great Opportunity?

• OSS/BSS suppliers are in position to drive innovation of operator loyalty and reward programs.
• Mobile marketing specialists have recently grabbed the marketing spotlight in stimulating operator loyalty program efforts.

Network operators of all types face the constant challenge of maintaining the loyalty of their customers.  Reducing customer churn consistently ranks as one of the key challenges operators identify as a top priority that keeps their decision makers up at night.  As a result, operators have invested a great deal to incentivize customers and prospects to choose their service including subsidies for mobile devices and discounts for switching operator services.

On the other hand, operators have not proven as adept in rewarding their loyal customers as part of an overall churn reduction strategy.  This is curious since a vast array of consumer-oriented industries, such as retail, credit cards, airlines, and hotels to name a few, use customer loyalty reward programs to help drive customer preference and loyalty for their own brands.  In the U.S. alone, the value of rewards and loyalty programs generates over $48 billion on an annual basis.  In various surveys, such as Ericsson’s ConsumerLab research, these industries receive higher positive perception ratings than network operators.  Surely the use of proven and familiar loyalty and reward programs has helped boost such positive ratings.

One key reason network operators have limited customer reward track records links back to their back-office capabilities.  Amdocs released a survey that showed only 21% of network operators indicate they have the necessary collaboration between their IT and customer retention and loyalty departments to support customer retention and loyalty strategies, such as creating one integrated customer profile, let alone offering simple and transparent pricing.  This is a classic variation of the proprietary silo model that evolved in the operator back office whereby, for example, the customer relationship management (CRM) platform cannot talk to the billing system platform without costly, time-consuming and manually intensive modifications.

Major OSS/BSS suppliers are not the only ones identifying the need for improvement in network operator loyalty programs.  Mobile marketing technology and solutions specialist Upstream targets creating customer loyalty through top-up and recharge activity with interactions, relevant games and valued prizes.  The company’s customer reward approach also enables prizes to be shared with the customer’s social network of family and friends, extending benefits beyond the individual customer.  Upstream invokes uses cases, including its work with Vodafone in markets such as Italy, Egypt and Romania to stimulate customer loyalty.  Mobile marketing specialist Big Time created its MobiWards program to exclusively cater to improving customer loyalty and reducing churn by promising a customer-centric approach that focuses on personalized customer/user interaction to deliver customized content and rewards.  Network operators can also look to cross-industry rewards to further entice customer loyalty.  For example, in order to boost customer retention, Alaska-based GCI rewards customers for dollars spent on its mobile services with air miles to partner Alaska Airlines.

Overall, OSS/BSS suppliers need to capitalize on driving operator customer reward programs with specific proposals that compel the operator to emulate successful rewards programs in other industries as well as better leverage their business/big data intelligence to innovate rewards programs.  While major OSS/BSS suppliers certainly have the tools to improve operator loyalty programs, mobile marketing specialists appear to have grabbed the spotlight recently in this area.  Likewise, operators need to make the required investments to integrate rewards programs as an essential element of customer retention strategies.  Without more robust rewards programs, the churn battle could continue on a price war attrition trajectory that satisfies few customers, let alone the operator.