‘DIY plans’ which allow subscribers to tailor their plans to their usage have recently emerged in India and some Southeast Asian markets. These ‘DIY plans’ allows highly personalised mobile plans. A high data-user for instance can chose to have a high data allocation and no SMS allocation; a jet-setting businessperson can choose to have a higher roaming and IDD allocation.
In Asia, for two leading telcos in India and the Philippines, DIY plans have resulted in an increase in subscriber acquisition of approximately 20%, 12 months post-launch. While these results might seem extremely encouraging from the outside, there are several challenges and risks to factor in. There is a big risk in combinations of the DIY plan conflicting with other existing plans resulting in older plans becoming redundant. With DIY plans, telcos also need to balance increase in sales with profitability, as underestimating customer acquisition costs and pricing too aggressively will impact their bottom lines.
How can telcos overcome these challenges of DIY plans?
Firstly, telcos must have a focused go-to-market strategy with an emphasis on consumer experience especially through physical touchpoints. Customer acquisition should be focused primarily on retail and telephone customer care channels to guide customers through the longer process of selecting a DIY plan. Telcos should also launch DIY plans first in showrooms and exclusive retail outlets, and then scale it to the entire distribution chain. This would ensure that the user experience is controlled and that all distributors can be sufficiently trained within the lead-up time to distribution. In retail stores telcos should design the DIY customer journey to be engaging and interactive, for example, by involving the use of tablets.
Secondly, telcos should drop any existing plans which conflict with DIY plan combinations, and focus marketing efforts on DIY plans. Depending upon the amount of flexibility offered by the DIY plans, in some cases, this could mean dropping even 60 – 70% of all present plans in the market. The marketing and promotion messages should be to reach out not only to new subscribers, but also to existing subscribers who are looking to migrate.
Thirdly, telcos should not be overly aggressive in pricing their plans. Some early adopters to the DIY plan have offered consumers a discount of almost 20% on existing per unit rates (on data, voice, SMS) – their aggressive pricing drove customer acquisition but was detrimental to their bottom lines.
Lastly, telcos should consider using a ‘Bento Box’ approach. Rather than offering complete customisability, one element (one of data, voice, or SMS) remains fixed (akin to rice in a bento box) while the other elements are flexible. This could help telcos better control profitability within their DIY portfolio.