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Partnerships needed for building customer loyalty via mobile social networking

Service providers building customer loyalty via mobile social networking services should look to OTT players as partners rather than enemies to capitalize on their creativity.

Editor's note: Increasingly popular smartphones offer users dramatically improved experiences when accessing mobile social networking services. TM Forum chairman and CEO Keith Willetts sees an opportunity for telecom service providers to monetize the rise of mobile social networking services while building customer loyalty and leveraging new revenues by exploring partnerships to deliver customer experience management initiatives modeled after innovative products, such as Google Wave, offered by over-the-top (OTT) players.

There is life beyond just carrying bits, but those creative engagements won't come to telecom players just by waiting and grumbling.

Keith Willetts
Chairman and CEO
TM Forum

Why would growing affinity groups loyal to service providers be good? Because customer loyalty goes straight to the bottom line. As TM Forum reported in its latest Insights Research Report on customer experience management, small shifts in customer loyalty can have a big impact on profitability.

Loyal customers don't need to be tempted with expensive offers to win them back, and their willingness to recommend your service makes them your best salespeople. What better than to have ever-expanding groups of friends telling one another that if they switch to use Facebook on your network, they will get a great tariff and extra goodies thrown in?

To make customer loyalty programs work properly, leaders in the key markets for mobile social networking services -- both mobile providers and social networking service operators -- would need to become more than just arms-length partners. They'd really need to team up. The service provider would get sticky revenues and improved profitability, and the social networking partner would instantly broaden and diversify its user base.

There's an old theory that everyone on the planet is connected, with only six degrees of separation between them; that is, you are only six friends away from every one of the 6.75 billion (and rising) people in the world. That's some network to play for.

Google Wave: A game-changer for mobile social networking services

While using social networking services is fun and seems to be the accepted method of communicating with large groups of people at one time, we're starting to see a new wave of online interaction that could play very well to the customer-loyalty smartphone strategy that rewards social networkers who communicate on the same network.

The new Google Wave product significantly changes how we communicate. Imagine having your email, instant messaging, blogs, collaboration tools, games, photo albums and much more all literally on the same page. Think of it as a mashup of Outlook, Skype, Flickr, wikis and anything else that allows you to communicate and share with others.

What this kind of service says to me is that people are communicating in ways that mimic how you'd interact if you were in a room full of people rather than if you were writing an old-fashioned letter or placing a phone call to just a single friend. So regardless of physical space or time, you can still collaborate with many people at the same time.

The beauty of Google Wave -- beyond the obvious features -- is that it's totally open source. Anyone can develop to it using Google's APIs, which are already freely available. If Gmail was an interesting twist on traditional computer- or server-based email, then Google Wave will take that to the next level. Of course, whether it catches on with users is another matter entirely, but for now people are clamoring for the privilege of a preview.

Service providers building customer loyalty via mobile social networking services should look to the over-the-top players as partners rather than enemies in order to capitalize on their creativity.

Something like Google Wave unfortunately only reinforces the argument that the telecom industry as a whole seems remarkably unable to come up with really new and innovative ideas. But I don't think it's entirely out of the game just yet. The world's communications providers are sitting on a lot of cash and are still part of a $1.4 trillion global market. With that financial strength, they can let someone else (such as OTT players like Facebook and Google) do the heavy lifting, then buy the service or partner with the company.

If they're smart, communications players will become an enabling platform for these services and find a way to monetize them as well. To do that, service providers have to get closer to these application service providers or get creative -- or both. There is life beyond just carrying bits, but those creative engagements won't come to telecom players just by waiting and grumbling. They have to get engaged and innovate too, making their own waves if they want to survive and thrive.

Back to: Building telecom revenue with mobile social networking services

About the author: Keith Willetts is recognized as one of the world's leading authorities on communications management. As co-founder and chairman of the TM Forum, he has been the driving force behind its continuous evolution. Currently managing partner at Mandarin Associates Ltd. in the U.K., Willetts consults with companies on a wide variety of business development issues. He previously held executive positions at BT and TCSI. A regular presenter and writer, he co-authored the highly influential book The Lean Communications Provider.

This was last published in November 2009

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