Modernizing the Walkie-Talkie Philosophy

When I was growing up, a kid with a walkie-talkie had it made. Operating within a radius of anywhere from a dozen yards to a quarter of a mile, those walkie-talkies opened up a whole new world of communication for us. All our parents had to do was buy the equipment and we kids could gab to our hearts’ content – for free.

Not so today. With mobile devices and smartphones a staple in practically every kid’s schoolbag, today’s parents are footing a hefty bill every month. And it’s no longer just for voice services; kids are downloading ringtones, video and all the latest iTunes – and all that costs. My neighbor decided that enough was enough, but when he tried to terminate his son’s relationship with the service provider, he found himself looking at a costly fee to get out of the contract.

That’s why prepaid services are such a great solution for teenagers whose parents want to regain control of their monthly bills. Just purchase whatever prepaid package your kids need and they’re free to talk whenever they want, as long as they want, until they run out of minutes. And there’s no monthly bill and no expensive and nasty surprises.

It’s not only teenagers, however, who are a target market for prepaid services. Recent statistics indicate that some 7 percent of young adults age 18-24 use some sort of prepaid plan. Occasional mobile phone users also find the prepaid option attractive as do people on vacation who don’t want to pay hefty roaming charges or need an inexpensive and convenient mobile phone option.

But the relative ease of buying and activating a new prepaid SIM card leaves service providers in the dark about their customer data and usage habits. So how are they supposed to nurture long-term relationships with customers whose names and addresses they don’t even know? There’s no magic formula for achieving and maintaining loyalty among prepaid customers, but there are a few things service providers can do to hold onto their share of the market.

For a start, offering a new and unique experience in the form of innovative services and attractive bundles is one way to stem the churn of prepaid customers. Offering customers targeted, relevant and immediate promotions is another. Opening the full range of network services to prepaid customers is also key to implementing retention and loyalty strategies. At the end of the day, the journey to promoting loyalty with prepaid customers comes down to five strategies: pricing, offerings, choice, promotions and hybrids.

But implementing innovative marketing and business models obviously demands business support systems which can carry out real-time operations. With U.S. prepaid penetration at 21 percent in 2010 and expected to reach 23 percent by 2011 (USB Research), service providers must ensure that their real-time charging systems work to enable new rapid, continuous launching of new services and promotions. So getting the back-end right is just as important as getting it right with the customers.

At the end of the day, increasing loyalty among prepaid customers is not something out of a fairy tale. Prepaid service providers can build long lasting relationships with their customers, ultimately growing their revenues, by introducing creative pricing, innovative services, attractive bundles and relevant promotions. As for customers, they get what they want and everyone’s happy.

Kind of reminds me how I felt about walkie-talkies. But without all the static.