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Bill Shock and the SME Opportunity

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Rob SmithBy Rob Smith

You might have heard about a story appearing in the U.K. press recently, which reported that a mobile customer was hit with two bills which amounted to a staggering £19,000 (c.$30,000).

While originally intent on the bill being paid, it later emerged the cost was a result of a fault with the customer’s device, which was (unexpectedly) sending and receiving vast amounts of data, and the operator agreed to waive the bill.

In a similar gaffe in October 2012, a French telephone user was sent a bill for 12 quadrillion Euros (yes, that’s a real number) – amounting to 6,000 times the yearly economic output of France as a whole. Fortunately, sense prevailed on that occasion too and the bill was waived.

For me, incidents like this raise two interesting questions: How many bill shock-type invoices are sent out each month that simply don't make the headlines (e.g. invoices with excessive charges sent out to major business customers that are simply returned unpaid or credited without fuss)? And why aren’t operators making use of the systems available to detect and prevent such excesses?

At the heart of the matter, surely, is the need for a change in mindset around the customer experience. With consumer spend increasingly being diverted to non-network services, apps and content, building long-lasting and mutually beneficial relationships with business customers must be a priority – in particular with the traditionally untapped and underserved SME segment.

The potential is undoubtedly there. By most figures, the business world is populated by as few as 1 percent of large corporations, and that the remaining 99 percent are small to medium sized enterprises (SMEs). Meanwhile, U.K. watchdog Ofcom has found that companies with five or more employees spend an average of 19 percent more than the average U.K. household on basic telecoms services alone.

While the SME market offers uncontested revenue-generating potential, communications service providers may not necessarily have the strategy in place to be able to reap the rewards immediately – that doesn’t mean that it can’t be done, however. While legacy consumer-oriented infrastructures may not have the capabilities and features required to support the niche needs of small business, operators can overcome such barriers and get to market quickly by using adjunct managed BSS services to support their SME proposition.

Another significant problem that service providers face is trying to identify their customers in the first place. The unique profile of SME business customers, in particular the SOHO and micro businesses, means that, for many service providers, their business sits somewhere in between the realms of larger corporates and individual consumers. To that degree, many SME customers may not even be known to the provider. There is, however, an opportunity for service providers to utilize sophisticated analytics to harness the wealth of customer data available across the multiple touch points they have with customers to ascertain their true status. By doing so, and by identifying small business customers, operators can structure SME packages according to their needs, and therefore provide additional value.

While there is a vast range of business and consumer tariffs to choose from, SMEs will find it difficult to identify a plan that works best for their usage patterns, subsequently defaulting to consumer pay-as-you-go or pay monthly plans to avoid spending years tied to contracts that don’t fit their needs. This naturally benefits neither the SME, nor the loyalty of the SME to the operator.

To take this idea of SME specialism one step further, the capabilities exist that would allow service providers to offer a template set of service levels and service assurance to their SME customers, though this would require greater flexibility and agility in the back-end systems to adapt to differing needs and usage patterns.

The SME opportunity is one that service providers are well aware of but struggle to monetize, mostly due to the inherent complexity of serving such a diverse and fragmented segment. With a shrewd proposition, backed up by an agile and flexible back-office, service providers could be well positioned to develop a long term SME strategy that benefits both parties.

Rob Smith is director, marketing development, MDS. Smith has 10 years of experience in the telecoms industry, with a sustained track record of delivery and creating growth.

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