With the imminent launch of 5G, carriers have identified a significant pricing challenge within the market. Although there’s been ample hype surrounding 5G, PWC’s recent consumer study shows that shoppers are only willing to pay an extra $4.40/month for 5G mobile services. Furthermore, Chinese smartphone manufacturer, OnePlus, has been the first to reveal that 5G devices could cost $200 to $300 more than current 4G devices. Even after 24 months, a significant shortfall will remain, and carriers need to be prepared. While many telco companies have their own sophisticated pricing optimization programs, these traditional methods aren’t able to keep up with changing consumer expectations in the face of rapid technology and market shifts. At Brightstar, we believe consumer proposition testing is key to solving this multi-billion dollar problem.
Traditionally, telco brands update their pricing models annually to align with new product releases or yearly phone plan refreshes. Amid these infrequent pricing evaluations, carriers also re-price bundled offers to balance the increasing costs of new devices and convert consumers to new products. Unfortunately, these rigid pricing models don’t consider the dynamic telco market and constant shift in consumer behavior. Therefore, carriers are missing out on the opportunity to finetune their offers, increase their margins, and retain customers.
At Brightstar, we’ve combined various scientific techniques to eliminate the guesswork around pricing in the telco industry. Our in-house data science team uses consumer sentiment, transactional data, machine learning, and statistical analysis to develop reliable scenarios for carriers to test new consumer propositions before implementing accurate pricing strategies. We’ve used this rigorous method in Australia to optimize bundled offers based on consumer willingness-to-pay. In Japan, we assisted with program design and market entry by testing consumer preference and pricing expectation for new products in the market. In Malaysia, we tailored go-to-market messaging by identifying consumer sentiment towards different product features. In the UK, we improved the customer experience by investigating consumer pain points.
How it works
Although many carriers are already using conjoint analysis (an online market research technique) to test phone plans, our consumer proposition analysis helps carriers gain competitive insights about their markets and customers quickly enough to influence tactical pricing, promotions, and procurement decisions. Our deep industry knowledge combined with conjoint analysis, machine learning algorithms, scientific segmentation, and market simulation allows us to accurately forecast customer demand as pricing changes in the market. From here, our data science team can advise clear pricing recommendations, run retail A/B testing, design corporate “war games,” and develop go-to-market strategies before and after the product is launched. Although these marketing techniques initially only serve online retailers, our consumer proposition testing can be applied to both offline and online channels, benefiting all retailers operating in the telco space.
The future of telco
Naturally, finding the perfect balance between profit and customer satisfaction can be challenging, but with Brightstar’s consumer proposition testing, carriers will be able to keep their products aligned with market trends and consumer preference. Already deployed in six countries with various Tier-1 carrier programs, our unique pricing optimization technique helps both online and offline carriers understand their customer base to price properly in their market. This innovative market testing approach will propel the telco industry forward, launch carriers to the top of the market, and design a whole new world of opportunities for telco.