Imagine, you’ve made it to the World Cup and have an ideal seat to take a shot of Mo Salah’s next goal. While he races to the goal, kicking the ball in front of him with masterly control, you lift your phone and click as he shoots the ball in just the right corner. You’ve got it! Now, time to share that picture with your friends back home…but wait…you receive a message that your prepaid balance is insufficient to share the picture. If only you had known ahead of time, you could have been ready to share that shot with everybody back home!
And this is exactly the way prepaid top-ups are heading; customers no longer have to check to see how much credit they have left, telecom providers are increasingly doing that for them and with good reason. Doing so creates customer loyalty and increases average revenue per user (ARPU). This also reduces customer churn, which is the industry term for losing a prepaid customer to another prepaid provider. Fortunately, there are many ways to retain your prepaid customers, prevent customer churn and increase ARPU.
Some of these customer retention methods include automatic reload options such as day-of-the-month top-up. A day-of-the-month top-up can be selected if the customer wants to manage their monthly prepaid costs by spending a certain amount per month. The selected prepaid credit amount is automatically added on a certain day of each month, and the credit is paid for by a direct debit, credit card, Paypal or Sepa payment. Convenience for both the customer and the telecom provider that directly impacts the provider’s bottom line. Customer churn is avoided because the customer appreciates not having to go to the store and buying a 16-digit top-up code, instead everything is taking care of automatically.
Another automatic reload option telecom providers can offer are low-balance top-ups. Once a customer’s credit has dropped below a certain threshold, the selected amount of credit is automatically reloaded to their prepaid credit. The customer’s preferred payment option has already been registered with the provider and this, too, is taken care of automatically through direct debit, credit card, Paypal or Sepa payment.
These automatic reload options create customer loyalty because of the ease they offer customers; customers have a prepaid account with the telecom provider, but they experience the convenience of a postpaid subscription. Telecom providers benefit on a large scale, too; acquiring new customers can cost a provider up to five times more than retaining prepaid customers. If a provider retains a million prepaid customers, this not only reduces costs because focus has shifted from the costs of customer acquisition, but the provider also increases ARPU on an extremely large scale. Studies have shown that by increasing customer loyalty, customer lifetime, or the time a customer stays with a prepaid telecom provider, is also extended, and ARPU accumulates even more.
Several future trends can be seen on the horizon for automatic reloads. Once all security issues have been examined and resolved, voice-activated top-ups and gadgets such as the Amazon Dash button are just around the corner, where the customer only has to ask for prepaid credit and it is automatically added to their balance. Another simple option that could easily be developed is a QR code on top-up receipts that customers can scan instead of having to type in the lengthy 16-digit codes that currently exist.
Prepaid packages that include data are another way to create customer loyalty and increase customer retention. Reminders that inform customers when a prepaid balance is low already exist, but push messages such as happy birthday or happy new year wishes are a nice touch that tethers a customer to a provider even more. The ubiquitous WhatsApp offers other possibilities for reloading options which are currently being explored. Prepaid SIM card registration that is linked to personal identification documents is already mandatory in some countries. This could be a push factor for customers to select automated payment options because they have to provide identification anyway when purchasing a prepaid SIM card.
In the end, to increase ARPU, creating customer loyalty is key, and the key to creating customer loyalty is offering the experience and convenience of a postpaid subscription. This creates a win-win situation for both the customer and the telecom provider.
Even Mo Salah couldn’t score a better goal.
About the author
Alper Altan – Reload Services
Business Development Manager
I’m Alper Altan, Business Development Manager at Mi-Pay. I make sure that Mi-Pay maximizes profit on existing customers as well as new business.