The science of customer experience WDS is trusted by many of the world’s best-known wireless brands to help assure the customer experience, improve future products and services and build long-term,

Quite simply, we know what makes smartphones smarter and apps more appealing. Scan the QR code opposite and see how we do it. wds.co

The science of customer experience WDS is trusted by many of the world’s best-known wireless brands to help assure the customer experience, improve future products and services and build long-term,

Quite simply, we know what makes smartphones smarter and apps more appealing. Scan the QR code opposite and see how we do it. wds.co

editorial

contents

a new magazine from WDS that aims to deliver actionable business intelligence to the wireless community. Working on behalf of some of the industry’s largest wireless brands, WDS uses its global contact centers, technology deployments and professional services to help millions of end-users get the most from their wireless products and services.

In doing this we’re also collecting vast amounts of customer experience data to build a better understanding of how today’s consumers, devices, networks and services are interacting with each other. It’s the insight that we derive from this data that adds real value to our customers, helping them to improve future products and services, design great customer experiences

and better control the in-life performance of products and services in a way that creates long-term value.

We now want to share some of that insight with the wider wireless community.

Our cover feature looks at the growth of Android and whether the platform is cultivating a decentralized ecosystem

to control. Our own analysis shows that the return and repair of Android devices is collectively costing mobile operators as much as $2USD billion per year as they try to evolve their customer service strategies to keep pace with the rapidly growing ecosystem and concerns over platform fragmentation. Our study into this topic

comprises analysis of over 600,000 technical support calls spanning several device brands, networks and countries. It’s this type of insight that we believe creates actionable business intelligence for our customers. With the launch of Experience magazine,

We hope you enjoy the magazine and we welcome your feedback at experience@wds.co

David Ffoulkes-Jones

CEO, WDS

06

Managing the customerexperience for success Understanding the role of customer experience in today’s wireless ecosystem.

10

Best from the blog

WDS blog.

12

Controlling the Android ecosystem In the face of enormous growth and threats of fragmentation, how can mobile operators best manage their Android investments?

18

Anatomy of a device saleDissecting the retail experience to demonstrate why this touch point represents more than just a transaction.

22

Meet a WDS customerTony Andrews from RadioShack talks about the company’s customer experience strategy.

Email : experience@wds.co twitter: @wdscompany Blog: blog.wds.co

Creating industry value through the customer experience

WDS is the trading name of Wireless Data Services Ltd. Registered in England and Wales (company number 01714719). Wireless Data Services Ltd., Alder Hills Park, 16 Alder Hills, Poole, Dorset, BH12 4AR, UK. VAT number GB 911330278 . WDS cannot accept (and hereby disclaims) any responsibility for loss or damage caused by errors or omissions. All rights reserved ©WDS 2012

221206 18

editorial

contents

a new magazine from WDS that aims to deliver actionable business intelligence to the wireless community. Working on behalf of some of the industry’s largest wireless brands, WDS uses its global contact centers, technology deployments and professional services to help millions of end-users get the most from their wireless products and services.

In doing this we’re also collecting vast amounts of customer experience data to build a better understanding of how today’s consumers, devices, networks and services are interacting with each other. It’s the insight that we derive from this data that adds real value to our customers, helping them to improve future products and services, design great customer experiences

and better control the in-life performance of products and services in a way that creates long-term value.

We now want to share some of that insight with the wider wireless community.

Our cover feature looks at the growth of Android and whether the platform is cultivating a decentralized ecosystem

to control. Our own analysis shows that the return and repair of Android devices is collectively costing mobile operators as much as $2USD billion per year as they try to evolve their customer service strategies to keep pace with the rapidly growing ecosystem and concerns over platform fragmentation. Our study into this topic

comprises analysis of over 600,000 technical support calls spanning several device brands, networks and countries. It’s this type of insight that we believe creates actionable business intelligence for our customers. With the launch of Experience magazine,

We hope you enjoy the magazine and we welcome your feedback at experience@wds.co

David Ffoulkes-Jones

CEO, WDS

06

Managing the customerexperience for success Understanding the role of customer experience in today’s wireless ecosystem.

10

Best from the blog

WDS blog.

12

Controlling the Android ecosystem In the face of enormous growth and threats of fragmentation, how can mobile operators best manage their Android investments?

18

Anatomy of a device saleDissecting the retail experience to demonstrate why this touch point represents more than just a transaction.

22

Meet a WDS customerTony Andrews from RadioShack talks about the company’s customer experience strategy.

Email : experience@wds.co twitter: @wdscompany Blog: blog.wds.co

Creating industry value through the customer experience

WDS is the trading name of Wireless Data Services Ltd. Registered in England and Wales (company number 01714719). Wireless Data Services Ltd., Alder Hills Park, 16 Alder Hills, Poole, Dorset, BH12 4AR, UK. VAT number GB 911330278 . WDS cannot accept (and hereby disclaims) any responsibility for loss or damage caused by errors or omissions. All rights reserved ©WDS 2012

221206 18

Within an industry threatened by service commoditization and product homogenization, the customer experience has quickly become a valued and accepted means of protecting enterprise value. Yet how it is defined, measured and used to direct strategy is still in its infancy.

Facing disruptive new market entrants, increasingly expectant consumers and poor economic conditions, mobile operators understand more than ever that they must look to differentiate themselves if they are to protect their market position and financial performance.

After years of low-cost, price cutting strategies designed to build market share, the industry has cultivated a generation of consumers that associate mobile operator value with price. The industry cannot continue to invest and encourage innovation

under this degree of price pressure. It must reverse the trend and win back customers’ loyalty based not on price, but service value.

Many operators already understand this need for change. Strategy is shifting away from subscriber acquisition to subscriber retention and operators are carefully carving themselves niches to better differentiate and protect their offers. However, operator infrastructure and supporting processes have failed to keep pace with this change.

For many, the ‘vision’ is writing checks that the rest of the organization simply can’t cash.

Customer experience is not a strategy

Customer experience is frequently lauded as a way for the industry to reclaim value and deliver more profitable customers. However, one of the industry’s greatest fallacies is that customer experience is a strategy in itself. It is not. Customer experience is not the differentiator, it is the enabler. It is the means by which an operator can correctly track, guide investment and control its ability to deliver on whatever strategy and brand promise it has built to develop its market position and drive shareholder value. It is the well thought- out customer experience program that ensures the entire organization ‘pulls in the same direction’ to deliver on this brand promise; building customer loyalty and driving investment into key customer touch points (customer interactions) that differentiate the brand.

Mobile operators have collectively invested billions in their brands and it is the role of customer experience to create an ‘experience’ that delivers to the brand promise so tightly that business strategy and customer experience become inseparable.

Using the customer experience to build loyalty

Building customer loyalty means more than simply generating customer satisfaction. A customer can be satisfied (e.g. with the price of a service), but not necessarily loyal (churning when a cheaper alternative appears). Truly loyal customers deliver a wealth of benefits; they become more profitable as the cost of acquiring them and servicing them becomes amortized over a longer period, they show a greater tendency to increase spend through additional services and, if converted into brand advocates, can drive subsequent customer acquisitions. Summarily, the loyal customer is one that drives real bottom-line growth for the mobile operator business.

User experience vs customer experience

It’s important at this point to understand the difference between a user experience and a customer experience as these terms are

often [mistakenly] used interchangeably. A user experience typically defines how a customer feels when using an individual system or service. It is a largely singular experience and does little to control long-term profitability and loyalty within a customer. The Apple iPhone, for example, may deliver a great user experience but if it’s connected to a congested network cell then the customer experience fails.

The customer experience is, then, the sum of all experiences a consumer has with a service provider; from initial awareness, discovery and purchase to use and advocacy. It comprises a number of ‘touch points’; these are the many interactions that the customer has with the operator, from an interaction at the point-of-sale, the unpacking of a new device and the quality of the device, to the network reliability and customer care efficiency. These interactions can make or break a customer relationship

Customer experience is not the differentiator, it is the enabler

There is no ‘silver bullet’ customer experience that will generate profitable and loyal customers overnight

Experience issue 1 – 0706 – Experience issue 1

Managing the Customer Experience for Success

Continued…

“

“

”

”

Within an industry threatened by service commoditization and product homogenization, the customer experience has quickly become a valued and accepted means of protecting enterprise value. Yet how it is defined, measured and used to direct strategy is still in its infancy.

Facing disruptive new market entrants, increasingly expectant consumers and poor economic conditions, mobile operators understand more than ever that they must look to differentiate themselves if they are to protect their market position and financial performance.

After years of low-cost, price cutting strategies designed to build market share, the industry has cultivated a generation of consumers that associate mobile operator value with price. The industry cannot continue to invest and encourage innovation

under this degree of price pressure. It must reverse the trend and win back customers’ loyalty based not on price, but service value.

Many operators already understand this need for change. Strategy is shifting away from subscriber acquisition to subscriber retention and operators are carefully carving themselves niches to better differentiate and protect their offers. However, operator infrastructure and supporting processes have failed to keep pace with this change.

For many, the ‘vision’ is writing checks that the rest of the organization simply can’t cash.

Customer experience is not a strategy

Customer experience is frequently lauded as a way for the industry to reclaim value and deliver more profitable customers. However, one of the industry’s greatest fallacies is that customer experience is a strategy in itself. It is not. Customer experience is not the differentiator, it is the enabler. It is the means by which an operator can correctly track, guide investment and control its ability to deliver on whatever strategy and brand promise it has built to develop its market position and drive shareholder value. It is the well thought- out customer experience program that ensures the entire organization ‘pulls in the same direction’ to deliver on this brand promise; building customer loyalty and driving investment into key customer touch points (customer interactions) that differentiate the brand.

Mobile operators have collectively invested billions in their brands and it is the role of customer experience to create an ‘experience’ that delivers to the brand promise so tightly that business strategy and customer experience become inseparable.

Using the customer experience to build loyalty

Building customer loyalty means more than simply generating customer satisfaction. A customer can be satisfied (e.g. with the price of a service), but not necessarily loyal (churning when a cheaper alternative appears). Truly loyal customers deliver a wealth of benefits; they become more profitable as the cost of acquiring them and servicing them becomes amortized over a longer period, they show a greater tendency to increase spend through additional services and, if converted into brand advocates, can drive subsequent customer acquisitions. Summarily, the loyal customer is one that drives real bottom-line growth for the mobile operator business.

User experience vs customer experience

It’s important at this point to understand the difference between a user experience and a customer experience as these terms are

often [mistakenly] used interchangeably. A user experience typically defines how a customer feels when using an individual system or service. It is a largely singular experience and does little to control long-term profitability and loyalty within a customer. The Apple iPhone, for example, may deliver a great user experience but if it’s connected to a congested network cell then the customer experience fails.

The customer experience is, then, the sum of all experiences a consumer has with a service provider; from initial awareness, discovery and purchase to use and advocacy. It comprises a number of ‘touch points’; these are the many interactions that the customer has with the operator, from an interaction at the point-of-sale, the unpacking of a new device and the quality of the device, to the network reliability and customer care efficiency. These interactions can make or break a customer relationship

Customer experience is not the differentiator, it is the enabler

There is no ‘silver bullet’ customer experience that will generate profitable and loyal customers overnight

Experience issue 1 – 0706 – Experience issue 1

Managing the Customer Experience for Success

Continued…

“

“

”

”

Summary Continued cost efficiency and revenue gains should not have to come at the expense of the customer experience; they should be a direct result of it. While the end goal of any customer experience optimization program is to create value through improved financial performance, it is important to approach this target from the bottom-up. Simple cost-cutting measures may meet short term expectations but they come at the cost of long-term sustainability.

Creating a valuable customer experience requires significant effort and resource. It requires careful planning and interaction between departments historically disconnected. There must be integration not only across technology platforms, but across a mobile operator’s people, processes and services. Unfortunately this has become increasingly challenging in today’s

decentralized market and operators must try harder than ever to retain their value-added positions and build a customer experience that now extends across the entire customer journey.

Parity across price plans, hardware and services means consumers increasingly see little measurable difference between brands; certainly not enough to build loyalty. Instead, the customer experience has emerged as a means for players to differentiate in this highly competitive market.

Managed correctly, the customer experience becomes fully integrated with the strategy and becomes the vehicle through which to deliver on the brand vision. But if it is the experience that drives customer behavior in this way, it must be built in a way that is controllable. Too often we see customer experience management programs failing to meet their true potential, either through poor measurement, reliance on siloed CRM deployments, or simply because macro-financial controls are deployed in a way that immediately breaks the customer experience and its ability to deliver the brand promise. This is why development of a great customer experience begins with understanding the enterprise-wide strategy and how the many interactions that the customer has with the operator influences their behavior, loyalty and profitability

and by designing them to influence the desired behavior in a customer, greater control is given.

Deploying a customer experience management program in this way offers far greater control to the operator. Individual touch points (and the processes that control them) can be optimized; they become micro control-points for the operator to adjust and manage within a framework where value is delivered by controlling the way in which the customer interacts with it. Financial performance becomes an output from these interactions. It becomes controllable and without it, the operator is resigned to controlling performance using cumbersome, macro-control methods that put the entire customer experience, and subsequently, the brand promise, at risk.

So there is no ‘silver bullet’ customer experience that will generate profitable and loyal customers overnight. It must be contextualized, mapped to an operator’s customer journey and tweaked to suit different customer segments and different internal departments. Above all, if it is to help an operator truly realize its vision and drive financial performance it must be designed in a way that can be controlled.

Aligned KPIs

Taking control of the customer experience in this way requires alignment across the entire operator business. If this doesn’t happen, the strategy (and the customer experience required to deliver it) can become diluted as it cascades throughout the organization and becomes placed under the control of siloed departments.

These departments are often measured against legacy KPIs that are unlikely to match the enterprise-wide view. Targets placed on Customer Operations to decrease support costs, on Product Marketing to source lower-cost devices or on Retail to speed the buying cycle can be insular and misaligned with each other; one often having a detrimental effect on the next.

In understanding that the customer experience is controlled by multiple interactions, each owned by different divisions and teams, it becomes clear that the performance of one team has a profound impact on others later in the customer journey. This is why any customer experience change program is a leadership issue that requires direct commitment from a C-Suite mandated to unify disjointed teams and processes.

Measuring performance

It is perhaps this end-to-end approach to customer experience that causes so much frustration among CFOs who wish to directly correlate departmental ‘customer experience’ investments against a financial improvement. This behavior frequently misses the point and compartmentalizes individual programs against an individual stage of the customer journey rather than considering its impact on the overarching strategy.

For example, an improvement in First Call Resolution by Customer Operations may be heralded as an improvement in the customer experience, but can the department be sure that the process or technology deployed hasn’t simply pushed cost elsewhere along the customer journey? Similarly, can the Marketing Department be confident that attitudinal Net Promoter Scores actually relate to a behavioral change when the customer’s contract is due to expire?

This is not to say that departmental customer experience measurement is not important. It is, if only to ensure that the customer-centric operator is able to focus investment on activities that will have a direct impact on the vision and strategic objective. However the utopian view of a perfectly aligned business that directs investment and resource in perfect synergy according to the customer experience is often just that, utopian! Investment can often be hard to achieve when customer experience data can’t directly be correlated to a financial benefit. In such cases, it’s useful to apply ‘translator’ KPIs.

Translator KPIs act as the bridge between departmental KPIs and the single strategy and brand vision that the operator must uphold. They provide a more tangible target that can be tied to a financial benefit but still demonstrate customer value.

Let’s take the example of an operator who looks to differentiate through ease-of-use and simplicity. It has decided that the market needs an accessible service provider able to cut through industry jargon and a sea of different tariffs. Its brand vision upholds these values and promises customers no-nonsense service built on the principle that less is sometimes more!

Having mapped its touch points, understood the customer journey and built what it sees as a unique customer experience it must use translator KPIs to ensure that departmental efforts and investments are directed correctly. These may include:

Lead to Cash: The length of time it takes to convert a customer lead and sign them to a

24-month contract.

Propensity to Call: The probability of a customer contacting customer care.

Service Availability: No customer should be left without service or a working device.

Contract Renewal / Upgrade: Conversion rate of existing customers onto more profitable contract type.

There exists, then, a very logical hierarchy to building the framework necessary to better control the customer experience (see Fig 1). Modeling the customer experience in this way allows very direct ROI analysis by calculating the cost of people, process and product investments against the desired customer behavior and resultant benefits.

KPI TRANSLATORSLead to Cash

Business Benefit: Shortened sales cycle.Propensity to Call

Business Benefit: Reduced cost-to-serve.

Customer Value: Product / service integrity.

No need to contact support.Service availability

Business Benefit: Remove key churn driver.

Customer Value: Continuity of service.

Fast problem / repair resolution.Contact Renewal / Upgrade

Business Benefit: Improved retention rate /TCO.

Customer Value: Valued relationship / continuity of service.

Launch pad for customer experience

Experience issue 1 – 0908 – Experience issue 1

1

2

3

4Fig 1: Using translator KPIs to

connect departmental KPIs to the desired customer experience

Summary Continued cost efficiency and revenue gains should not have to come at the expense of the customer experience; they should be a direct result of it. While the end goal of any customer experience optimization program is to create value through improved financial performance, it is important to approach this target from the bottom-up. Simple cost-cutting measures may meet short term expectations but they come at the cost of long-term sustainability.

Creating a valuable customer experience requires significant effort and resource. It requires careful planning and interaction between departments historically disconnected. There must be integration not only across technology platforms, but across a mobile operator’s people, processes and services. Unfortunately this has become increasingly challenging in today’s

decentralized market and operators must try harder than ever to retain their value-added positions and build a customer experience that now extends across the entire customer journey.

Parity across price plans, hardware and services means consumers increasingly see little measurable difference between brands; certainly not enough to build loyalty. Instead, the customer experience has emerged as a means for players to differentiate in this highly competitive market.

Managed correctly, the customer experience becomes fully integrated with the strategy and becomes the vehicle through which to deliver on the brand vision. But if it is the experience that drives customer behavior in this way, it must be built in a way that is controllable. Too often we see customer experience management programs failing to meet their true potential, either through poor measurement, reliance on siloed CRM deployments, or simply because macro-financial controls are deployed in a way that immediately breaks the customer experience and its ability to deliver the brand promise. This is why development of a great customer experience begins with understanding the enterprise-wide strategy and how the many interactions that the customer has with the operator influences their behavior, loyalty and profitability

and by designing them to influence the desired behavior in a customer, greater control is given.

Deploying a customer experience management program in this way offers far greater control to the operator. Individual touch points (and the processes that control them) can be optimized; they become micro control-points for the operator to adjust and manage within a framework where value is delivered by controlling the way in which the customer interacts with it. Financial performance becomes an output from these interactions. It becomes controllable and without it, the operator is resigned to controlling performance using cumbersome, macro-control methods that put the entire customer experience, and subsequently, the brand promise, at risk.

So there is no ‘silver bullet’ customer experience that will generate profitable and loyal customers overnight. It must be contextualized, mapped to an operator’s customer journey and tweaked to suit different customer segments and different internal departments. Above all, if it is to help an operator truly realize its vision and drive financial performance it must be designed in a way that can be controlled.

Aligned KPIs

Taking control of the customer experience in this way requires alignment across the entire operator business. If this doesn’t happen, the strategy (and the customer experience required to deliver it) can become diluted as it cascades throughout the organization and becomes placed under the control of siloed departments.

These departments are often measured against legacy KPIs that are unlikely to match the enterprise-wide view. Targets placed on Customer Operations to decrease support costs, on Product Marketing to source lower-cost devices or on Retail to speed the buying cycle can be insular and misaligned with each other; one often having a detrimental effect on the next.

In understanding that the customer experience is controlled by multiple interactions, each owned by different divisions and teams, it becomes clear that the performance of one team has a profound impact on others later in the customer journey. This is why any customer experience change program is a leadership issue that requires direct commitment from a C-Suite mandated to unify disjointed teams and processes.

Measuring performance

It is perhaps this end-to-end approach to customer experience that causes so much frustration among CFOs who wish to directly correlate departmental ‘customer experience’ investments against a financial improvement. This behavior frequently misses the point and compartmentalizes individual programs against an individual stage of the customer journey rather than considering its impact on the overarching strategy.

For example, an improvement in First Call Resolution by Customer Operations may be heralded as an improvement in the customer experience, but can the department be sure that the process or technology deployed hasn’t simply pushed cost elsewhere along the customer journey? Similarly, can the Marketing Department be confident that attitudinal Net Promoter Scores actually relate to a behavioral change when the customer’s contract is due to expire?

This is not to say that departmental customer experience measurement is not important. It is, if only to ensure that the customer-centric operator is able to focus investment on activities that will have a direct impact on the vision and strategic objective. However the utopian view of a perfectly aligned business that directs investment and resource in perfect synergy according to the customer experience is often just that, utopian! Investment can often be hard to achieve when customer experience data can’t directly be correlated to a financial benefit. In such cases, it’s useful to apply ‘translator’ KPIs.

Translator KPIs act as the bridge between departmental KPIs and the single strategy and brand vision that the operator must uphold. They provide a more tangible target that can be tied to a financial benefit but still demonstrate customer value.

Let’s take the example of an operator who looks to differentiate through ease-of-use and simplicity. It has decided that the market needs an accessible service provider able to cut through industry jargon and a sea of different tariffs. Its brand vision upholds these values and promises customers no-nonsense service built on the principle that less is sometimes more!

Having mapped its touch points, understood the customer journey and built what it sees as a unique customer experience it must use translator KPIs to ensure that departmental efforts and investments are directed correctly. These may include:

Lead to Cash: The length of time it takes to convert a customer lead and sign them to a

24-month contract.

Propensity to Call: The probability of a customer contacting customer care.

Service Availability: No customer should be left without service or a working device.

Contract Renewal / Upgrade: Conversion rate of existing customers onto more profitable contract type.

There exists, then, a very logical hierarchy to building the framework necessary to better control the customer experience (see Fig 1). Modeling the customer experience in this way allows very direct ROI analysis by calculating the cost of people, process and product investments against the desired customer behavior and resultant benefits.

KPI TRANSLATORSLead to Cash

Business Benefit: Shortened sales cycle.Propensity to Call

Business Benefit: Reduced cost-to-serve.

Customer Value: Product / service integrity.

No need to contact support.Service availability

Business Benefit: Remove key churn driver.

Customer Value: Continuity of service.

Fast problem / repair resolution.Contact Renewal / Upgrade

Business Benefit: Improved retention rate /TCO.

Customer Value: Valued relationship / continuity of service.

Launch pad for customer experience

Experience issue 1 – 0908 – Experience issue 1

1

2

3

4Fig 1: Using translator KPIs to

connect departmental KPIs to the desired customer experience

Best from the blog

-14.2% Nokia

-3.9% Sony Ericsson-3% Motorola -2.5% LG

+0.2% Samsung+0.3% RIM+1.2% ZTE +2.1% HTC +3.9% Apple

Market share gain and loss Q1 09 to Q

3 11

There’s more to loyalty than retention

Consumer retention is a long established priority across the wireless industry, primarily because most mature wireless markets appreciate that the cost of retaining an existing customer is far less than that of acquiring a new one. However loyal consumers have much more to offer than just consistent revenues.

Although by their nature loyal consumers will be retained, not all retained consumers will be loyal. The implications of switching providers can prove a barrier to switching for many subscribers, as can the prospect of navigating through an unfamiliar operating system. With this in mind it becomes evident that retention is a byproduct not just of loyalty but also consumer inertia.

Loyalty is often described as the emotional bond between the consumer and the brand. It’s an affective construct that goes above and beyond consumer satisfaction, offering many behavioral advantages.

The inclination for loyal consumers to promote or recommend a brand has been well documented and as such the Net Promoter Score (NPS) metric has become a prominent loyalty measure. Recommendations are a powerful catalyst for growth as consumers allocate a much higher degree of trust to fellow consumers than they do any other source. This circle of trust reaches beyond the immediate pool of family and friends to a myriad of online acquaintances through social media platforms or online forums. The most dedicated of these brand advocates are suitably described as ‘brand missionaries’,

spreading the brand message far and wide in addition to defending it against rival criticisms. This advanced level of loyalty is evident within the smartphone community, especially for Operating Systems such as iOS, whose consumers have developed a cult-like following to the brand.

Not only will loyal consumers make a valued contribution to the organization’s sales and PR efforts but in addition to this they often become a valuable support channel. Having purchased a phone based on a recommendation from a fellow consumer, a user will naturally turn to this brand advocate for resolving subsequent usability issues. Often, brand missionaries will also offer ways to improve the experience; for example recommending apps and services. The loyal brand missionary is an asset and it’s vital that we sit-up and take notice

The handset long-tail

Despite the economic turbulence of the last few years the mobile device market has remained remarkably buoyant, with shipment volumes increasing year-on-year; from 1.15bn in 2009, 1.38bn in 2010 and 737m units in the first six months of 2011 alone. But do you know who’s been the greatest beneficiary of this growth? The answer may surprise you.

In fact four of the largest manufacturers have all lost market share (23.6% between them since 2009) and with positive gains of just a few percent among even the industry’s brightest stars (Apple saw the greatest increase at 3.9%, followed by HTC, ZTE, RIM and Samsung), one wonders who’s benefited the most.

The real-winner isn’t actually a single manufacturer but the mobile device ‘long-tail’. This describes the hundreds of new manufacturers that have sprung up to fuel

consumer demand, yet remain too small to register on the shipment league-tables compiled by industry analysts (who refer to them simply as ‘others’). They began 2009 with 12.4% of the global handset shipment market (29.4m units).

Today they comprise nearly a third (27.8%) of the market.

Many of these manufacturers are based in South-East Asia (hundreds exist in China alone), and while many serve just their local markets, others have global aspirations. Ningbo Bird, for example, is a name unlikely to be familiar to most of the world’s mobile consumers. However, it employs over 10,000 people, and ships millions of devices to over 60 countries worldwide where they’re often rebranded and sold by operators. Companies such as Ningbo Bird very obviously look to emulate the success of companies such as HTC and ZTE who have recently exploded onto the global stage as brands in their own right.

Much of this success has been driven by a strong consumer appetite for smartphone products over the past three years. To meet this demand, and manage the cost of ranging traditionally expensive smartphone products, mobile operators have looked to lower-cost options. Thanks to the maturation of the component market and the Android OS, smaller manufacturers have been able to respond, delivering smartphone products at wholesale prices under US$100. The combination of low(er)-cost smartphones and the ability to add UI overlays onto Android devices (something not achievable on competing smartphone platforms such as iOS, BlackBerry and Windows Phone), has proved very compelling to the operator community.

Individually these manufacturers represent little threat to the Tier One manufacturers. However, as a collective they represent a seismic, and rather disruptive, shift in the industry

Hardware as a brand

Once was the day that devices were designed around specific demographics and use cases. OEMs even started building their brands around certain form factors.

Wanted a flip phone, buy a Motorola. A candybar, buy a Nokia. A Qwerty, buy a BlackBerry. But walk into a mobile retail outlet today and the smartphones on offer will fall into two camps; the anonymous black touchscreen or the ‘looks like a BlackBerry but isn’t’ Qwerty. Put simply, everything looks the same. Hardware is homogenizing at the top-end; the smartphone parts-bin is shared out across brands with screens, keys, processors, and more, becoming interchangeable between manufacturers.

The problem is compounded with the screens switched off, devoid of any icons or branding to help in the identification process.

For device manufacturers, and especially those Tier One manufacturers deploying Android products, this lack of innovation and design differentiation could be detrimental to brand value. Consumer brands have long associated their brand identity with industrial design; from the iconic Coca-Cola bottle to the styling-cues used across a car manufacturer’s range of vehicles. Can the wireless industry claim the same; how quickly could you identify a device brand based solely on its form factor and design? Any such void adds greater brand equity to the OS; and it’s to this that consumers will grow their loyalty, not to the hardware. In this scenario, with consumers buying on software features and functions, it becomes increasingly difficult for the Tier One manufacturers to protect their price points against lower-cost variants with (at least on the surface) comparable functionality

Experience issue 1 – 1110 – Experience issue 1

Some of the most viewed blog posts from blog.wds.co

Best from the blog

-14.2% Nokia

-3.9% Sony Ericsson-3% Motorola -2.5% LG

+0.2% Samsung+0.3% RIM+1.2% ZTE +2.1% HTC +3.9% Apple

Market share gain and loss Q1 09 to Q

3 11

There’s more to loyalty than retention

Consumer retention is a long established priority across the wireless industry, primarily because most mature wireless markets appreciate that the cost of retaining an existing customer is far less than that of acquiring a new one. However loyal consumers have much more to offer than just consistent revenues.

Although by their nature loyal consumers will be retained, not all retained consumers will be loyal. The implications of switching providers can prove a barrier to switching for many subscribers, as can the prospect of navigating through an unfamiliar operating system. With this in mind it becomes evident that retention is a byproduct not just of loyalty but also consumer inertia.

Loyalty is often described as the emotional bond between the consumer and the brand. It’s an affective construct that goes above and beyond consumer satisfaction, offering many behavioral advantages.

The inclination for loyal consumers to promote or recommend a brand has been well documented and as such the Net Promoter Score (NPS) metric has become a prominent loyalty measure. Recommendations are a powerful catalyst for growth as consumers allocate a much higher degree of trust to fellow consumers than they do any other source. This circle of trust reaches beyond the immediate pool of family and friends to a myriad of online acquaintances through social media platforms or online forums. The most dedicated of these brand advocates are suitably described as ‘brand missionaries’,

spreading the brand message far and wide in addition to defending it against rival criticisms. This advanced level of loyalty is evident within the smartphone community, especially for Operating Systems such as iOS, whose consumers have developed a cult-like following to the brand.

Not only will loyal consumers make a valued contribution to the organization’s sales and PR efforts but in addition to this they often become a valuable support channel. Having purchased a phone based on a recommendation from a fellow consumer, a user will naturally turn to this brand advocate for resolving subsequent usability issues. Often, brand missionaries will also offer ways to improve the experience; for example recommending apps and services. The loyal brand missionary is an asset and it’s vital that we sit-up and take notice

The handset long-tail

Despite the economic turbulence of the last few years the mobile device market has remained remarkably buoyant, with shipment volumes increasing year-on-year; from 1.15bn in 2009, 1.38bn in 2010 and 737m units in the first six months of 2011 alone. But do you know who’s been the greatest beneficiary of this growth? The answer may surprise you.

In fact four of the largest manufacturers have all lost market share (23.6% between them since 2009) and with positive gains of just a few percent among even the industry’s brightest stars (Apple saw the greatest increase at 3.9%, followed by HTC, ZTE, RIM and Samsung), one wonders who’s benefited the most.

The real-winner isn’t actually a single manufacturer but the mobile device ‘long-tail’. This describes the hundreds of new manufacturers that have sprung up to fuel

consumer demand, yet remain too small to register on the shipment league-tables compiled by industry analysts (who refer to them simply as ‘others’). They began 2009 with 12.4% of the global handset shipment market (29.4m units).

Today they comprise nearly a third (27.8%) of the market.

Many of these manufacturers are based in South-East Asia (hundreds exist in China alone), and while many serve just their local markets, others have global aspirations. Ningbo Bird, for example, is a name unlikely to be familiar to most of the world’s mobile consumers. However, it employs over 10,000 people, and ships millions of devices to over 60 countries worldwide where they’re often rebranded and sold by operators. Companies such as Ningbo Bird very obviously look to emulate the success of companies such as HTC and ZTE who have recently exploded onto the global stage as brands in their own right.

Much of this success has been driven by a strong consumer appetite for smartphone products over the past three years. To meet this demand, and manage the cost of ranging traditionally expensive smartphone products, mobile operators have looked to lower-cost options. Thanks to the maturation of the component market and the Android OS, smaller manufacturers have been able to respond, delivering smartphone products at wholesale prices under US$100. The combination of low(er)-cost smartphones and the ability to add UI overlays onto Android devices (something not achievable on competing smartphone platforms such as iOS, BlackBerry and Windows Phone), has proved very compelling to the operator community.

Individually these manufacturers represent little threat to the Tier One manufacturers. However, as a collective they represent a seismic, and rather disruptive, shift in the industry

Hardware as a brand

Once was the day that devices were designed around specific demographics and use cases. OEMs even started building their brands around certain form factors.

Wanted a flip phone, buy a Motorola. A candybar, buy a Nokia. A Qwerty, buy a BlackBerry. But walk into a mobile retail outlet today and the smartphones on offer will fall into two camps; the anonymous black touchscreen or the ‘looks like a BlackBerry but isn’t’ Qwerty. Put simply, everything looks the same. Hardware is homogenizing at the top-end; the smartphone parts-bin is shared out across brands with screens, keys, processors, and more, becoming interchangeable between manufacturers.

The problem is compounded with the screens switched off, devoid of any icons or branding to help in the identification process.

For device manufacturers, and especially those Tier One manufacturers deploying Android products, this lack of innovation and design differentiation could be detrimental to brand value. Consumer brands have long associated their brand identity with industrial design; from the iconic Coca-Cola bottle to the styling-cues used across a car manufacturer’s range of vehicles. Can the wireless industry claim the same; how quickly could you identify a device brand based solely on its form factor and design? Any such void adds greater brand equity to the OS; and it’s to this that consumers will grow their loyalty, not to the hardware. In this scenario, with consumers buying on software features and functions, it becomes increasingly difficult for the Tier One manufacturers to protect their price points against lower-cost variants with (at least on the surface) comparable functionality

Experience issue 1 – 1110 – Experience issue 1

Some of the most viewed blog posts from blog.wds.co

Are fragmentation concerns valid?

In November 2010, game developer Rovio Mobile withdrew its hugely popular Angry Birds from the Android Market after it began receiving complaints that the game was running poorly on a number of Android handsets. With reports of screen lag and unresponsiveness, the company’s investigation showed that some older, and some less-well specified devices were unable to deliver a quality gaming experience. In its place, the game was replaced by Angry Birds Lite, a version coded to the lowest common [Android] denominator.

The problem is symptomatic of both hardware and software fragmentation, and made public one very clear problem with an open source platform; the experience on one Android device is not necessarily consistent with the next.

Unlike operating systems from competing vendors, such as Apple and RIM, Android is available under an open source license. Both Apple and RIM operate a tightly controlled, and largely closed, ecosystem. Their OS is deployed only on their hardware, built to their specifications and passed through their own testing processes; consequently the

customer experience is predictable and consistent. At the other end of the spectrum sits Android. The OS is deployed by dozens of OEMs, each using different hardware reference designs and each subject to different testing processes.

Android deployments can never compete with the hardware consistency (or software integration) of some of its competitors; nor does it want to. Google executives have repeatedly argued against clamping down on fragmentation, claiming that the company does not believe in a ‘one size fits all’ solution. However, contrary to popular belief Google does impose certain anti-fragmentation measures. For example, to deploy the Android Market

manufacturers must follow the Android Compatibility Program, which includes a Compatibility Testing Suite (CTS) on which to test deployments against the Compatibility Definition Document (CDD). In addition to describing compatibility, standards and customization rights over the software it also mandates a minimum set of hardware requirements, covering for example the screen and camera, so that Android Market apps are able to permeate across the widest Android device community possible.

However, to broaden its reach to as many manufacturers and budgets as possible, minimum processor / graphics processor speeds (one of the largest single component costs in an Android build) are low; certainly lower than the 1Ghz processor speed mandated by Microsoft for all Windows Phone 7 builds. This is the problem that Rovio Mobile ran into; many older devices and low-end entry level devices simply didn’t have the processing power to deliver a quality experience. It’s also a problem that many smartphone consumers experience, many of who subsequently add cost to their mobile operator by contacting customer care looking for a resolution, or worse, looking for a replacement.

Continued…

CONTROLLING THE ANDROID ECOSYSTEM

stagnation that has hit other parts of the telecoms industry, the mobile handset market remains surprisingly buoyant. Shipment volumes continue to increase year-on-year; from 1.15bn in 2009, and 1.38bn in 2010 to 1.13bn units shipped in the first three quarters of 2011 alone. Much of this growth has come from the smartphone device category and, in particular, the success of the Android operating system.

Android’s open architecture, customization options and deployment by more than 35 OEMs (which has also helped to drive down the cost of smartphone products) makes it a highly desirable prospect for mobile operators. However, the platform’s rapid growth has led to concerns over fragmentation, product reliability and a decentralized ecosystem that is shifting power away from mobile operators

Despite the economic

Experience issue 1 – 1312 – Experience issue 1

The experience on one Android device is not necessarily consistent with the next

”

“

Are fragmentation concerns valid?

In November 2010, game developer Rovio Mobile withdrew its hugely popular Angry Birds from the Android Market after it began receiving complaints that the game was running poorly on a number of Android handsets. With reports of screen lag and unresponsiveness, the company’s investigation showed that some older, and some less-well specified devices were unable to deliver a quality gaming experience. In its place, the game was replaced by Angry Birds Lite, a version coded to the lowest common [Android] denominator.

The problem is symptomatic of both hardware and software fragmentation, and made public one very clear problem with an open source platform; the experience on one Android device is not necessarily consistent with the next.

Unlike operating systems from competing vendors, such as Apple and RIM, Android is available under an open source license. Both Apple and RIM operate a tightly controlled, and largely closed, ecosystem. Their OS is deployed only on their hardware, built to their specifications and passed through their own testing processes; consequently the

customer experience is predictable and consistent. At the other end of the spectrum sits Android. The OS is deployed by dozens of OEMs, each using different hardware reference designs and each subject to different testing processes.

Android deployments can never compete with the hardware consistency (or software integration) of some of its competitors; nor does it want to. Google executives have repeatedly argued against clamping down on fragmentation, claiming that the company does not believe in a ‘one size fits all’ solution. However, contrary to popular belief Google does impose certain anti-fragmentation measures. For example, to deploy the Android Market

manufacturers must follow the Android Compatibility Program, which includes a Compatibility Testing Suite (CTS) on which to test deployments against the Compatibility Definition Document (CDD). In addition to describing compatibility, standards and customization rights over the software it also mandates a minimum set of hardware requirements, covering for example the screen and camera, so that Android Market apps are able to permeate across the widest Android device community possible.

However, to broaden its reach to as many manufacturers and budgets as possible, minimum processor / graphics processor speeds (one of the largest single component costs in an Android build) are low; certainly lower than the 1Ghz processor speed mandated by Microsoft for all Windows Phone 7 builds. This is the problem that Rovio Mobile ran into; many older devices and low-end entry level devices simply didn’t have the processing power to deliver a quality experience. It’s also a problem that many smartphone consumers experience, many of who subsequently add cost to their mobile operator by contacting customer care looking for a resolution, or worse, looking for a replacement.

Continued…

CONTROLLING THE ANDROID ECOSYSTEM

stagnation that has hit other parts of the telecoms industry, the mobile handset market remains surprisingly buoyant. Shipment volumes continue to increase year-on-year; from 1.15bn in 2009, and 1.38bn in 2010 to 1.13bn units shipped in the first three quarters of 2011 alone. Much of this growth has come from the smartphone device category and, in particular, the success of the Android operating system.

Android’s open architecture, customization options and deployment by more than 35 OEMs (which has also helped to drive down the cost of smartphone products) makes it a highly desirable prospect for mobile operators. However, the platform’s rapid growth has led to concerns over fragmentation, product reliability and a decentralized ecosystem that is shifting power away from mobile operators

Despite the economic

Experience issue 1 – 1312 – Experience issue 1

The experience on one Android device is not necessarily consistent with the next

”

“

Experience issue 1 – 1514 – Experience issue 1

Consistency and buyer’s remorse

At the point-of-sale, many consumers (and retailers alike) are assuming a degree of consistency across Android devices that in some cases doesn’t exist. Even migrating from one Android device to the next can bring about problems as consumers’ expectations for performance are dismantled by a different hardware build and by potentially resource-hungry operator and manufacturer overlays. Indeed, because Android Market displays only apps capable of running on a specific build, a number of operators and retailers have experienced product returns from consumers unable to access the same content as their friends, or the same content and apps as their previous device.

The problem can also be compounded by the length of time a device sits in the dealer channel waiting to be sold. What, to the consumer, might appear as the latest device may in fact be shipping with a 12 month old single-core processor and an old OS version. Only when the consumer returns home and un-boxes his new purchase does he realize that he is unable to achieve the same Android experience as his peers (or his previous device).

As a majority, consumers don’t (and shouldn’t) care about platform fragmentation and OS versions. As part of the buying cycle, consumers will have built an opinion about a product; expectations are set. When these expectations are not fulfilled, perhaps as in the case above, the consumer may experience buyers’ remorse – the feeling that the product doesn’t offer the best value for money or that a more preferable product was available elsewhere.

From donuts to cupcakesIt’s not only [the lack of] hardware consistency that causes difficulties for developers and inconsistencies for consumers. Many argue that there are simply too many versions of the Android Operating System in circulation and that this again drives additional support costs from consumers; a) looking to upgrade and checking with their operator for release dates, b) finding that after an upgrade they have lost previously available functionality and c) finding that their device won’t get, or isn’t capable of getting, the latest upgrade.

Information regarding upgrade availability often differs between manufacturers and achieving OS version parity across a base of devices can take several months. This, and a combination of frequent OS upgrades and the duration of time that stock sits in the channel means that it’s common for a consumer’s newly acquired device to already be running an outdated version of Android.

Like the hardware fragmentation issue, this can cause problems. The Android Market allows application developers to build for specific Android versions meaning consumers could discover that their new device (with legacy OS version) doesn’t have the necessary software APIs to access some apps. For example, resource intensive applications built to leverage the performance improvements of Android 2.2 (Froyo) will not perform well on older versions of the OS.

In late 2009, Netflix, a provider of on-demand streamed movies, ran into problems when developing its Android app.

The service was already available on more than 200 different consumer electronics devices, including iOS and Windows Phone 7. However the company pulled the launch of an Android app, stating that Android fragmentation had led to the lack of a common digital rights management (DRM) solution.

This was a key requirement enforced upon it by its major studio partners. To circumvent the problem, Netflix was forced to work with individual device manufacturers to add content protection to their devices.

“Unfortunately, this is a much slower approach and leads to a fragmented experience on Android, in which some handsets will have access to Netflix and others won’t,” explained Netflix. “This clearly is not the preferred solution, and we regret the confusion it might create for consumers. However, we believe that providing the service for some Android device owners is better than denying it to everyone.”

The situation is improving. Google’s own data shows that over 90% of Android devices are now running v2.x, as a minimum. WDS analysis shows that a new Android version requires 2-3 months in-market before accelerating in market share, and then peaks at 50-60% share before declining to make way for its successor. (Fig 1)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1.5

1.6

2.1

2.2

2.3

2.3.3

3

3.1

3.2

Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2010

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

2011

Cupcake

Donut

Eclair

Froyo

Gingerbread

Honeycomb

Fig 1: Android OS version market share (Mar 2010 – Aug 2011)

Are Android devices more expensive to support?Based on analysis of over half a million technical support interactions between July 2010 and June 2011, WDS found that (when measured by the length of time taken to resolve a support interaction) Android devices are no easier, nor more difficult, to troubleshoot than a comparative product from an alternate OS vendor. However, analysis of problem types encountered by different OS brands can often point to key deficiencies in the OS value chain that can, in turn, drive support costs or even increase the rate of product returns.

Experience issue 1 – 1514 – Experience issue 1

Consistency and buyer’s remorse

At the point-of-sale, many consumers (and retailers alike) are assuming a degree of consistency across Android devices that in some cases doesn’t exist. Even migrating from one Android device to the next can bring about problems as consumers’ expectations for performance are dismantled by a different hardware build and by potentially resource-hungry operator and manufacturer overlays. Indeed, because Android Market displays only apps capable of running on a specific build, a number of operators and retailers have experienced product returns from consumers unable to access the same content as their friends, or the same content and apps as their previous device.

The problem can also be compounded by the length of time a device sits in the dealer channel waiting to be sold. What, to the consumer, might appear as the latest device may in fact be shipping with a 12 month old single-core processor and an old OS version. Only when the consumer returns home and un-boxes his new purchase does he realize that he is unable to achieve the same Android experience as his peers (or his previous device).

As a majority, consumers don’t (and shouldn’t) care about platform fragmentation and OS versions. As part of the buying cycle, consumers will have built an opinion about a product; expectations are set. When these expectations are not fulfilled, perhaps as in the case above, the consumer may experience buyers’ remorse – the feeling that the product doesn’t offer the best value for money or that a more preferable product was available elsewhere.

From donuts to cupcakesIt’s not only [the lack of] hardware consistency that causes difficulties for developers and inconsistencies for consumers. Many argue that there are simply too many versions of the Android Operating System in circulation and that this again drives additional support costs from consumers; a) looking to upgrade and checking with their operator for release dates, b) finding that after an upgrade they have lost previously available functionality and c) finding that their device won’t get, or isn’t capable of getting, the latest upgrade.

Information regarding upgrade availability often differs between manufacturers and achieving OS version parity across a base of devices can take several months. This, and a combination of frequent OS upgrades and the duration of time that stock sits in the channel means that it’s common for a consumer’s newly acquired device to already be running an outdated version of Android.

Like the hardware fragmentation issue, this can cause problems. The Android Market allows application developers to build for specific Android versions meaning consumers could discover that their new device (with legacy OS version) doesn’t have the necessary software APIs to access some apps. For example, resource intensive applications built to leverage the performance improvements of Android 2.2 (Froyo) will not perform well on older versions of the OS.

In late 2009, Netflix, a provider of on-demand streamed movies, ran into problems when developing its Android app.

The service was already available on more than 200 different consumer electronics devices, including iOS and Windows Phone 7. However the company pulled the launch of an Android app, stating that Android fragmentation had led to the lack of a common digital rights management (DRM) solution.

This was a key requirement enforced upon it by its major studio partners. To circumvent the problem, Netflix was forced to work with individual device manufacturers to add content protection to their devices.

“Unfortunately, this is a much slower approach and leads to a fragmented experience on Android, in which some handsets will have access to Netflix and others won’t,” explained Netflix. “This clearly is not the preferred solution, and we regret the confusion it might create for consumers. However, we believe that providing the service for some Android device owners is better than denying it to everyone.”

The situation is improving. Google’s own data shows that over 90% of Android devices are now running v2.x, as a minimum. WDS analysis shows that a new Android version requires 2-3 months in-market before accelerating in market share, and then peaks at 50-60% share before declining to make way for its successor. (Fig 1)

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1.5

1.6

2.1

2.2

2.3

2.3.3

3

3.1

3.2

Mar Apr May Jun Jul Aug Sep Oct Nov Dec

2010

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov

2011

Cupcake

Donut

Eclair

Froyo

Gingerbread

Honeycomb

Fig 1: Android OS version market share (Mar 2010 – Aug 2011)

Are Android devices more expensive to support?Based on analysis of over half a million technical support interactions between July 2010 and June 2011, WDS found that (when measured by the length of time taken to resolve a support interaction) Android devices are no easier, nor more difficult, to troubleshoot than a comparative product from an alternate OS vendor. However, analysis of problem types encountered by different OS brands can often point to key deficiencies in the OS value chain that can, in turn, drive support costs or even increase the rate of product returns.

16 – Experience issue 1

One example is a higher than average propensity for hardware failures on devices running Android. Of the smartphone technical support calls analyzed by WDS 14% of Android calls were assigned to hardware faults such as button or touchscreen failures, speaker and microphone faults and battery performance. Windows Phone 7 OS operates within a similar set of dynamics to Android in that it is implemented by multiple manufacturers. However, Windows Phone 7 deployments are subject to tighter minimum hardware specifications and, by comparison, 11% of technical support calls for the platform were assigned to hardware. At the other end of the scale iOS and the BlackBerry OS are both implemented on closed hardware platforms tightly controlled by Apple and RIM. This full, end-to-end control is reflected in a far lower propensity for hardware failure; 7% and 6% respectively. (Fig 2)

Hardware faults are of particular concern to mobile operators. Software or configuration faults can typically be rectified by the

CSR remotely, either through manual configuration or an over-the-air update. However, hardware faults usually result in the device being returned and entered into a reverse logistics process for repair or replacement.

This results in additional cost for the operator:

Logistics: Authorizing returns, testing, repairing,

restocking, reshipping and disposal.

Sales & Marketing: Remarketing / selling refurbished products.

Finance: Validating warranty repairs

and recovering costs from suppliers.

Customer Service: Managing customer interactions.

The ability of an operator to reclaim the initial value of a returned device is critical. While there is no set model in the industry for returns (there are many factors

that determine who in the supply chain pays for returns, repairs, restocking and transportation for example), the normal range for recoverable value can vary anywhere between 20-50%, resulting in a cost of approximately GBP£80 per return for the operator. With WDS estimating the average rate of smartphone returns at 5-7%, the necessity to mitigate returns becomes obvious.

But while Android deployments may show a higher propensity to hardware failures than rival OS platforms, analysis of these hardware faults shows no principle defects on the platform; ie: the platform is not predisposed to one particular hardware defect. Instead, the distribution of hardware faults against weighted averages deviates by less than 1% in all categories. In this instance, Android actually benefits from deployment across multiple reference designs and component variants. This means that the brand is unlikely to be associated with a specific hardware shortcoming.

Conversely, both iOS and BlackBerry (deployed on controlled hardware designs with limited component deviation) show strong weighting towards failures in particular hardware categories. This is the result of a single defect permeating across an entire device portfolio. In Apple’s case, 16% of all hardware issues relate to speaker failure (against a weighted average of 6%). For BlackBerry, a quarter of all faults resided with Button / Key failure (against an 8.8% average).

These figures must be considered carefully and in this instance, the ‘share of hardware faults’ has no relation to the total volume of calls taken; ie while 16% of all Apple hardware failures related to speaker faults, such calls represent just 1.3% of all technical support calls taken for the platform. However it remains an important metric as brands can quickly become associated with a particular hardware deficiency if their distribution of hardware failures is focused too heavily in a particular category. For example, BlackBerry’s reputation for battery longevity, build and audio quality is upheld in WDS’ findings. Likewise, Apple’s reputation for quality displays but occasionally sub-optimal audio performance is also qualified by these results.

Support costs are not limited to hardware failures. In fact while hardware problems account for 14% of all support calls taken, 16% are related to platform / software issues. As a percentage of all tech support calls taken this is a higher percentage than both BlackBerry and iOS which generate 4% and 2% respectively.

However, this is not an indictment of the platform’s shortcomings, rather a testament to its growth across a broader range of consumers than many of the other smartphone platforms. For many consumers an Android device will be their first smartphone. The migration from a featurephone to a smartphone can occasionally be intimidating; with advanced features and functions to navigate and learn. Many of the platform / software calls included in WDS’ study were symptomatic of this migrationary period into the mass-market and can be classed as user-education.

However, analysis does show a correlation between customer care / support traffic and Android OS updates. There is much anecdotal evidence to suggest updates cause some end-users to experience unexpected device behavior or loss of previously available functionality. However, it must not be assumed that shortcomings are the direct result of Android tweaks. Instead, a number of faults have arisen because of the functionality added (or removed) by operators and OEMs in their overlays. In one example from 2010, a UK operator was forced to apologize to its customers after fielding a storm of complaints from users unhappy with the addition of ‘bloatware’ – unnecessary software added by the operator that couldn’t easily be removed, in an Android 2.1 update. Customers complained that the additions slowed their devices and inhibited some functionality (including SMS notifications).

Android has delivered enormous value but needs operator control

Android has arguably done more than any other technology to develop and democratize the smartphone market. However the speed of its penetration into the market has undoubtedly put strain on operators’ supporting infrastructures and business models. However, the challenges that have arisen are addressable and in no way outweigh the benefits derived from Android’s accessibility and openness.

Despite objections to the contrary [from Google], WDS analysis would suggest that platform fragmentation has driven additional cost into many operators’ businesses, largely through increased instances of product repairs and returns. WDS believes the difference in opinion comes from the disconnect between operator / retailer support channels and Google itself. The industry’s own decentralization and fragmentation means that data rarely flows seamlessly across all parties involved in the development, manufacture, distribution, retail and servicing of a product.

Of course, the only way to truly combat both hardware and software version fragmentation would be to slow down the pace of development and/or mandate tighter deployment requirements. However, this would be detrimental to Android’s USP and, ultimately, its competitiveness. In the case of software fragmentation this leaves Google to perform a careful balancing act; juggling the need to develop the platform at a pace that protects its market leadership but with consideration for the external factors that impact the customer experience and TCO for its principal channel to market, the mobile operators

14%

11%

7%6% Fig 2: Hardware related calls

as a percentage of all technical

support calls. (Source: WDS 2011).

Challenges that have arisen are addressable and in no way outweigh the benefits derived from Android’s accessibility and openness

“

”

1

2

3

4

Experience issue 1 – 17

16 – Experience issue 1

One example is a higher than average propensity for hardware failures on devices running Android. Of the smartphone technical support calls analyzed by WDS 14% of Android calls were assigned to hardware faults such as button or touchscreen failures, speaker and microphone faults and battery performance. Windows Phone 7 OS operates within a similar set of dynamics to Android in that it is implemented by multiple manufacturers. However, Windows Phone 7 deployments are subject to tighter minimum hardware specifications and, by comparison, 11% of technical support calls for the platform were assigned to hardware. At the other end of the scale iOS and the BlackBerry OS are both implemented on closed hardware platforms tightly controlled by Apple and RIM. This full, end-to-end control is reflected in a far lower propensity for hardware failure; 7% and 6% respectively. (Fig 2)

Hardware faults are of particular concern to mobile operators. Software or configuration faults can typically be rectified by the

CSR remotely, either through manual configuration or an over-the-air update. However, hardware faults usually result in the device being returned and entered into a reverse logistics process for repair or replacement.

This results in additional cost for the operator:

Logistics: Authorizing returns, testing, repairing,

restocking, reshipping and disposal.

Sales & Marketing: Remarketing / selling refurbished products.

Finance: Validating warranty repairs

and recovering costs from suppliers.

Customer Service: Managing customer interactions.

The ability of an operator to reclaim the initial value of a returned device is critical. While there is no set model in the industry for returns (there are many factors

that determine who in the supply chain pays for returns, repairs, restocking and transportation for example), the normal range for recoverable value can vary anywhere between 20-50%, resulting in a cost of approximately GBP£80 per return for the operator. With WDS estimating the average rate of smartphone returns at 5-7%, the necessity to mitigate returns becomes obvious.

But while Android deployments may show a higher propensity to hardware failures than rival OS platforms, analysis of these hardware faults shows no principle defects on the platform; ie: the platform is not predisposed to one particular hardware defect. Instead, the distribution of hardware faults against weighted averages deviates by less than 1% in all categories. In this instance, Android actually benefits from deployment across multiple reference designs and component variants. This means that the brand is unlikely to be associated with a specific hardware shortcoming.

Conversely, both iOS and BlackBerry (deployed on controlled hardware designs with limited component deviation) show strong weighting towards failures in particular hardware categories. This is the result of a single defect permeating across an entire device portfolio. In Apple’s case, 16% of all hardware issues relate to speaker failure (against a weighted average of 6%). For BlackBerry, a quarter of all faults resided with Button / Key failure (against an 8.8% average).

These figures must be considered carefully and in this instance, the ‘share of hardware faults’ has no relation to the total volume of calls taken; ie while 16% of all Apple hardware failures related to speaker faults, such calls represent just 1.3% of all technical support calls taken for the platform. However it remains an important metric as brands can quickly become associated with a particular hardware deficiency if their distribution of hardware failures is focused too heavily in a particular category. For example, BlackBerry’s reputation for battery longevity, build and audio quality is upheld in WDS’ findings. Likewise, Apple’s reputation for quality displays but occasionally sub-optimal audio performance is also qualified by these results.

Support costs are not limited to hardware failures. In fact while hardware problems account for 14% of all support calls taken, 16% are related to platform / software issues. As a percentage of all tech support calls taken this is a higher percentage than both BlackBerry and iOS which generate 4% and 2% respectively.

However, this is not an indictment of the platform’s shortcomings, rather a testament to its growth across a broader range of consumers than many of the other smartphone platforms. For many consumers an Android device will be their first smartphone. The migration from a featurephone to a smartphone can occasionally be intimidating; with advanced features and functions to navigate and learn. Many of the platform / software calls included in WDS’ study were symptomatic of this migrationary period into the mass-market and can be classed as user-education.

However, analysis does show a correlation between customer care / support traffic and Android OS updates. There is much anecdotal evidence to suggest updates cause some end-users to experience unexpected device behavior or loss of previously available functionality. However, it must not be assumed that shortcomings are the direct result of Android tweaks. Instead, a number of faults have arisen because of the functionality added (or removed) by operators and OEMs in their overlays. In one example from 2010, a UK operator was forced to apologize to its customers after fielding a storm of complaints from users unhappy with the addition of ‘bloatware’ – unnecessary software added by the operator that couldn’t easily be removed, in an Android 2.1 update. Customers complained that the additions slowed their devices and inhibited some functionality (including SMS notifications).

Android has delivered enormous value but needs operator control

Android has arguably done more than any other technology to develop and democratize the smartphone market. However the speed of its penetration into the market has undoubtedly put strain on operators’ supporting infrastructures and business models. However, the challenges that have arisen are addressable and in no way outweigh the benefits derived from Android’s accessibility and openness.

Despite objections to the contrary [from Google], WDS analysis would suggest that platform fragmentation has driven additional cost into many operators’ businesses, largely through increased instances of product repairs and returns. WDS believes the difference in opinion comes from the disconnect between operator / retailer support channels and Google itself. The industry’s own decentralization and fragmentation means that data rarely flows seamlessly across all parties involved in the development, manufacture, distribution, retail and servicing of a product.

Of course, the only way to truly combat both hardware and software version fragmentation would be to slow down the pace of development and/or mandate tighter deployment requirements. However, this would be detrimental to Android’s USP and, ultimately, its competitiveness. In the case of software fragmentation this leaves Google to perform a careful balancing act; juggling the need to develop the platform at a pace that protects its market leadership but with consideration for the external factors that impact the customer experience and TCO for its principal channel to market, the mobile operators

14%

11%

7%6% Fig 2: Hardware related calls

as a percentage of all technical

support calls. (Source: WDS 2011).

Challenges that have arisen are addressable and in no way outweigh the benefits derived from Android’s accessibility and openness

“

”

1

2

3

4

Experience issue 1 – 17

With a heightened degree of influence over the entire customer experience, decisions made by consumers when selecting wireless products and services, and the practices employed by retailers during the buying process, have been found to have a profound impact on both lifetime profitability and loyalty.

By correctly matching products to consumer needs, introducing services and supporting the exploration of a new device, retailers are quickly realizing that their influence can dramatically shape consumer behavior in a way that not only drives profitable post-sale usage patterns and loyalty, but also mitigates unnecessary device returns.

But while efficiencies can help to achieve industry targets, failures can quickly erode them. In many cases the failure is minor and may go unnoticed; however more salient deficiencies are often at the root of consumer frustration and can result in significant damage to revenues, brand, operational costs and loyalty.

Control the entire buying cycle

The actual ‘transaction’ represents just one element of the buying cycle. In order to develop loyalty among its customer base, the retailer must try to broaden its reach.

For example, to better control the risk of product returns, retailers need to consider how the consumer has researched and

evaluated products, what their motivation for purchase is and how the out-of-box and set-up experience will support them.

Following several behavioral surveys and audits for leading retailers over the past 12 months, WDS has compiled this complete view of the device buying cycle. (Fig 1)

Need recognition

The desire to purchase a new device can stem from one of many variables; it might be a scheduled upgrade, a new connectivity need, the launch of a hero device or simply that the consumer’s current device isn’t satisfactory. The need recognition will also often dictate how the consumer progresses

through the rest of the buying cycle. For example, a consumer churning from another network will take greater time comparing devices, price-points and operator services than someone taking a scheduled upgrade.

In most cases however, customers will be faced by a wide array of choice and unfortunately the complexity and volume of decisions required during the buying process can dramatically increase the likelihood of a poor decision. In addition, today’s consumers are time-pressured and given the breadth and depth of information available to them for research and comparison, few have the time to make a thorough appraisal of every product on offer to them.

For some the consequence of a poor decision may be trivial, but for others poor choices made at this stage can greatly impact the likelihood of the device being returned.

Anatomy of a device sale

The complexity and volume of decisions required during the buying process can dramatically increase the likelihood of a poor decision.

Today’s retail experience has become more than just a transaction. Maximizer or

satisficer?Consumers can be grouped within two need fulfillment categories, maximizers and satisficers. Maximizers only accept the best, conducting exhaustive research and exploring as many options as possible before making a final decision. A maximizer needs to be sure that they have chosen the best possible product or service to fit their needs. Such consumers are more susceptible to buyer’s remorse, dwelling on alternatives that may not have been considered in full. Satisficers will ‘settle’ for a product or service that is good enough. They don’t worry about the possibility of a better alternative. Being a satisficer does not mean compromising. These consumers still have standards for price and quality, but once that bar has been met they will happily transact.

1918

recognition search Evaluation Purchase

P

ost s

ale

Need Information

recognition search Evaluation Purchase

P

ost s

ale

Need Inform

ationDevice buying cycle

Device buying cycle

recognition search Evaluation Purchase

P

ost s

ale

Need Inform

ationDevice buying cycle

Fig 1: Device buying cycle

With a heightened degree of influence over the entire customer experience, decisions made by consumers when selecting wireless products and services, and the practices employed by retailers during the buying process, have been found to have a profound impact on both lifetime profitability and loyalty.

By correctly matching products to consumer needs, introducing services and supporting the exploration of a new device, retailers are quickly realizing that their influence can dramatically shape consumer behavior in a way that not only drives profitable post-sale usage patterns and loyalty, but also mitigates unnecessary device returns.

But while efficiencies can help to achieve industry targets, failures can quickly erode them. In many cases the failure is minor and may go unnoticed; however more salient deficiencies are often at the root of consumer frustration and can result in significant damage to revenues, brand, operational costs and loyalty.

Control the entire buying cycle

The actual ‘transaction’ represents just one element of the buying cycle. In order to develop loyalty among its customer base, the retailer must try to broaden its reach.

For example, to better control the risk of product returns, retailers need to consider how the consumer has researched and

evaluated products, what their motivation for purchase is and how the out-of-box and set-up experience will support them.

Following several behavioral surveys and audits for leading retailers over the past 12 months, WDS has compiled this complete view of the device buying cycle. (Fig 1)

Need recognition

The desire to purchase a new device can stem from one of many variables; it might be a scheduled upgrade, a new connectivity need, the launch of a hero device or simply that the consumer’s current device isn’t satisfactory. The need recognition will also often dictate how the consumer progresses

through the rest of the buying cycle. For example, a consumer churning from another network will take greater time comparing devices, price-points and operator services than someone taking a scheduled upgrade.

In most cases however, customers will be faced by a wide array of choice and unfortunately the complexity and volume of decisions required during the buying process can dramatically increase the likelihood of a poor decision. In addition, today’s consumers are time-pressured and given the breadth and depth of information available to them for research and comparison, few have the time to make a thorough appraisal of every product on offer to them.

For some the consequence of a poor decision may be trivial, but for others poor choices made at this stage can greatly impact the likelihood of the device being returned.

Anatomy of a device sale

The complexity and volume of decisions required during the buying process can dramatically increase the likelihood of a poor decision.

Today’s retail experience has become more than just a transaction. Maximizer or

satisficer?Consumers can be grouped within two need fulfillment categories, maximizers and satisficers. Maximizers only accept the best, conducting exhaustive research and exploring as many options as possible before making a final decision. A maximizer needs to be sure that they have chosen the best possible product or service to fit their needs. Such consumers are more susceptible to buyer’s remorse, dwelling on alternatives that may not have been considered in full. Satisficers will ‘settle’ for a product or service that is good enough. They don’t worry about the possibility of a better alternative. Being a satisficer does not mean compromising. These consumers still have standards for price and quality, but once that bar has been met they will happily transact.

1918

recognition search Evaluation Purchase

P

ost s

ale

Need Information

recognition search Evaluation Purchase

P

ost s

ale

Need Inform

ationDevice buying cycle

Device buying cycle

recognition search Evaluation Purchase

P

ost s

ale

Need Inform

ationDevice buying cycle

Fig 1: Device buying cycle

2120

Post sale (device exploration)

The 30 days immediately after a new device purchase is one of the most important in the entire lifecycle. It is at this stage where consumers explore new features and functions and set-up services, this process will ultimately shape user behavior and determine long-term profitability.

Again the way in which a consumer proceeds through the exploration phase will vary across different consumer segments. Motivation among prosumers is predominantly led by connectivity needs and peer conformity. The ‘digital-native’ generation expects, and is expected to be connected at all times. They have a strong feature-led motivation that offers a clear rationale for purchase. After the point of purchase, there’s likely a very clear process of exploration on the device, mapping to the original connectivity requirements. On the other hand, mass-market (Late Majority) consumers may not have such clearly defined feature-led needs to be satisfied. Many will naturally churn onto a smartphone platform as part of their natural upgrade path.

This means, for the mass-market, Late Majority consumer, the process of device exploration after the point of purchase can be vague and unstructured.

Without a clear motivating need, consumers can easily become overloaded with new technologies, features, functionalities and complex set-up procedures. In such circumstances, particularly when faced with an unfamiliar device, it’s quite usual for the user to simply abandon set-up of a new service and return to familiar voice and SMS applications. Ultimately, while a user may change device with little thought, they won’t necessarily change usage patterns to suit.

A profitable outcomeThe buying cycle is undoubtedly becoming a more challenging and complex environment to manage, particularly for mobile operators who typically bear the cost of a poorly managed retail experience. Its impact on the lifetime profitability of a customer shouldn’t be underestimated either. Consider, for example, the four possible outcomes of any device purchase:

Device Return: The consumer decides that the device does not match his or her initial expectations or requirements. It is too complicated to set up or navigate and the device is returned either as a No Fault Found return or as a return within the retailer’s standard returns policy.

Immutable Behavior: There is no incentive for the user to change their usage patterns as they migrate to a more

sophisticated smartphone from a basic featurephone. New features and functions have not been introduced and the consumer simply navigates to familiar, low-margin voice services and occasional text messages. This renders 99% of the (subsidized) device obsolete and makes it increasingly difficult for the mobile operator to recoup their subsidy investment.

Aspiration Change: The consumer dives into his device’s new features and functions without consultation or education. His motivation for using value-added services is high but his ability to set up and navigate complex mobile products is not. The consumer becomes a support burden as he looks to resolve multiple configuration and usability issues within the first weeks of ownership. Eventual data usage may occur but profitability will have been damaged from these early support requirements.

Profitable: This is the desired outcome. The consumer has been correctly matched with a device that meets his/her needs. They have been introduced to appropriate services and guided through the set-up process. They become a regular user of high-margin data services but without adding unnecessary cost to the retail or mobile operator / service provider’s support channels.

With smartphones becoming the de facto device choice for many consumers, controlling as much of this buying cycle as possible should be a priority in any customer experience strategy

Information search

Multiple research sources will be used in this initial phase of the decision making process. Traditionally, consumers have embraced multiple sources through a sequence of separate engagements, an online search at home or in the office, a visit to the store, a call to customer care, a quick flick through a catalogue and perhaps another visit to the store to make the final decision. However, today’s consumers can, and often do, embrace different channels and technologies simultaneously. A savvy consumer with a smartphone could quickly use their device to take a picture of a product barcode, initiating a price comparison engine and accessing product and consumer reviews. A photo of the product could be shared across their social network, inviting personal recommendations or warnings, and a mapping application could quickly show them alternative retailers within walking distance of their current location.

The evolution in how consumers conduct an information search represents a significant challenge for today’s retailer. The level of trust assigned to social media and personal sources (Fig 2) represents a key shift in power from commercial to customer-customer channels and presents a key challenge for retailers, operators and manufacturers alike.

Evaluation

The way in which consumers evaluate products, services and retailers varies enormously across demographics. Don’t be fooled into thinking there’s a silver bullet. There is no single retail experience that will shape profitability and loyalty overnight. Instead these demographical divides are bringing different preferences and attitudes to the market, forcing retailers to build multiple experiences that tailor to a variety of needs.

For example, buying decisions comprise multiple criteria, including brand loyalty, product availability, point-of-sale experience and past experience. Retailers must leverage these factors to start gaining market share based on ‘value’ and not just price.

Value perception also differs enormously between demographics and cultures. However, trust and expertise is a recurring theme and is common across many high-value and electronic sales. Consumers want, and need, to trust their retailer. They are looking for transparency and convenience as they navigate the complexity of price plans and product features. Consumers who don’t feel confident in their sales representative’s knowledge are more inclined to defer on a purchase.

However, in a bid to establish a trusted relationship with the consumer, sales individuals may turn to their own opinion and brand preferences, guiding consumers away from products that they personally believe (rightly or wrongly) are over-priced or represent poor value. They believe that this behavior establishes a high level of trust with the consumer but this over-compensation can come at the cost of actually listening and understanding the requirements of the consumer.

Purchase

Even after supporting the consumer through a tireless exploration process, the retailer cannot be assured a sale.

Given the culture for multi-channel research and shopping it has become almost impossible for one single retailer to own the buying experience end-to-end and fully understand the consumer’s expectations. In fact it is often the case that consumers will experience disconnect from within the same brand. Even today, many mobile operators insist that handset upgrades can only be processed through the online store or by contacting customer care, rather than benefiting from the impulse buying behavior of consumers who pass the physical store. Likewise, consumers become aggravated by their inability to return faulty products to a convenient physical store because it’s been purchased through the online channel. This disconnect between channels is confusing and frustrating for the consumer who is therefore prevented from enjoying the expected convenience of the retailer’s multiple channels.

For the mass market the process of device exploration after the point of purchase can be vague and unstructured.

Retailers want to build market share based on ‘service value’ and not just price.

Family

Friends

Online Product Reviews

Product Web Sites

News Sources

Search Engines

TV

Discussion Forums

Influential Bloggers

Unknown Peers

0 10 20 30 40 50 60 70

GlobalNorth America

1

2

3

4

Who consumers trust in their buying decisions

Fig 2: Sources of trust, Nielson 2010 Global Trust Study

2120

Post sale (device exploration)

The 30 days immediately after a new device purchase is one of the most important in the entire lifecycle. It is at this stage where consumers explore new features and functions and set-up services, this process will ultimately shape user behavior and determine long-term profitability.

Again the way in which a consumer proceeds through the exploration phase will vary across different consumer segments. Motivation among prosumers is predominantly led by connectivity needs and peer conformity. The ‘digital-native’ generation expects, and is expected to be connected at all times. They have a strong feature-led motivation that offers a clear rationale for purchase. After the point of purchase, there’s likely a very clear process of exploration on the device, mapping to the original connectivity requirements. On the other hand, mass-market (Late Majority) consumers may not have such clearly defined feature-led needs to be satisfied. Many will naturally churn onto a smartphone platform as part of their natural upgrade path.

This means, for the mass-market, Late Majority consumer, the process of device exploration after the point of purchase can be vague and unstructured.

Without a clear motivating need, consumers can easily become overloaded with new technologies, features, functionalities and complex set-up procedures. In such circumstances, particularly when faced with an unfamiliar device, it’s quite usual for the user to simply abandon set-up of a new service and return to familiar voice and SMS applications. Ultimately, while a user may change device with little thought, they won’t necessarily change usage patterns to suit.

A profitable outcomeThe buying cycle is undoubtedly becoming a more challenging and complex environment to manage, particularly for mobile operators who typically bear the cost of a poorly managed retail experience. Its impact on the lifetime profitability of a customer shouldn’t be underestimated either. Consider, for example, the four possible outcomes of any device purchase:

Device Return: The consumer decides that the device does not match his or her initial expectations or requirements. It is too complicated to set up or navigate and the device is returned either as a No Fault Found return or as a return within the retailer’s standard returns policy.

Immutable Behavior: There is no incentive for the user to change their usage patterns as they migrate to a more

sophisticated smartphone from a basic featurephone. New features and functions have not been introduced and the consumer simply navigates to familiar, low-margin voice services and occasional text messages. This renders 99% of the (subsidized) device obsolete and makes it increasingly difficult for the mobile operator to recoup their subsidy investment.

Aspiration Change: The consumer dives into his device’s new features and functions without consultation or education. His motivation for using value-added services is high but his ability to set up and navigate complex mobile products is not. The consumer becomes a support burden as he looks to resolve multiple configuration and usability issues within the first weeks of ownership. Eventual data usage may occur but profitability will have been damaged from these early support requirements.

Profitable: This is the desired outcome. The consumer has been correctly matched with a device that meets his/her needs. They have been introduced to appropriate services and guided through the set-up process. They become a regular user of high-margin data services but without adding unnecessary cost to the retail or mobile operator / service provider’s support channels.

With smartphones becoming the de facto device choice for many consumers, controlling as much of this buying cycle as possible should be a priority in any customer experience strategy

Information search

Multiple research sources will be used in this initial phase of the decision making process. Traditionally, consumers have embraced multiple sources through a sequence of separate engagements, an online search at home or in the office, a visit to the store, a call to customer care, a quick flick through a catalogue and perhaps another visit to the store to make the final decision. However, today’s consumers can, and often do, embrace different channels and technologies simultaneously. A savvy consumer with a smartphone could quickly use their device to take a picture of a product barcode, initiating a price comparison engine and accessing product and consumer reviews. A photo of the product could be shared across their social network, inviting personal recommendations or warnings, and a mapping application could quickly show them alternative retailers within walking distance of their current location.

The evolution in how consumers conduct an information search represents a significant challenge for today’s retailer. The level of trust assigned to social media and personal sources (Fig 2) represents a key shift in power from commercial to customer-customer channels and presents a key challenge for retailers, operators and manufacturers alike.

Evaluation

The way in which consumers evaluate products, services and retailers varies enormously across demographics. Don’t be fooled into thinking there’s a silver bullet. There is no single retail experience that will shape profitability and loyalty overnight. Instead these demographical divides are bringing different preferences and attitudes to the market, forcing retailers to build multiple experiences that tailor to a variety of needs.

For example, buying decisions comprise multiple criteria, including brand loyalty, product availability, point-of-sale experience and past experience. Retailers must leverage these factors to start gaining market share based on ‘value’ and not just price.

Value perception also differs enormously between demographics and cultures. However, trust and expertise is a recurring theme and is common across many high-value and electronic sales. Consumers want, and need, to trust their retailer. They are looking for transparency and convenience as they navigate the complexity of price plans and product features. Consumers who don’t feel confident in their sales representative’s knowledge are more inclined to defer on a purchase.

However, in a bid to establish a trusted relationship with the consumer, sales individuals may turn to their own opinion and brand preferences, guiding consumers away from products that they personally believe (rightly or wrongly) are over-priced or represent poor value. They believe that this behavior establishes a high level of trust with the consumer but this over-compensation can come at the cost of actually listening and understanding the requirements of the consumer.

Purchase

Even after supporting the consumer through a tireless exploration process, the retailer cannot be assured a sale.

Given the culture for multi-channel research and shopping it has become almost impossible for one single retailer to own the buying experience end-to-end and fully understand the consumer’s expectations. In fact it is often the case that consumers will experience disconnect from within the same brand. Even today, many mobile operators insist that handset upgrades can only be processed through the online store or by contacting customer care, rather than benefiting from the impulse buying behavior of consumers who pass the physical store. Likewise, consumers become aggravated by their inability to return faulty products to a convenient physical store because it’s been purchased through the online channel. This disconnect between channels is confusing and frustrating for the consumer who is therefore prevented from enjoying the expected convenience of the retailer’s multiple channels.

For the mass market the process of device exploration after the point of purchase can be vague and unstructured.

Retailers want to build market share based on ‘service value’ and not just price.

Family

Friends

Online Product Reviews

Product Web Sites

News Sources

Search Engines

TV

Discussion Forums

Influential Bloggers

Unknown Peers

0 10 20 30 40 50 60 70

GlobalNorth America

1

2

3

4

Who consumers trust in their buying decisions

Fig 2: Sources of trust, Nielson 2010 Global Trust Study

With 4,500 stores, RadioShack is one of the leading retailers of innovative wireless and personal technology products, services and accessories in the US. As a business with a strong wireless focus it takes the customer experience seriously and began working with WDS in 2009 to extend the value delivered to customers not only in-store but post-sale.

Most recently, and as part of its Mobile Product Support program, RadioShack signed WDS to deliver an exclusive, nationwide support service spanning in-store, contact center, web and on-device apps to help customers get the most from their smartphone or tablet for the life of the device.

We talked to Tony Andrews, Vice President Wireless Operations at RadioShack to find out more about the retailer’s customer experience ambitions and its relationship with WDS.

WDS: What is RadioShack’s customer experience strategy?

TA: Retailers haven’t historically invested in the post-sale customer experience but at RadioShack we understand that this is vital in building long-term customer value and loyalty. Our strategy extends beyond the actual purchase of a product and we’re really focusing on the ‘Out of Box’ experience and helping our customers get the most from their RadioShack wireless purchase for the life of the product.

Our customers want convenience, they want value and they want us to be their trusted local advisor. The average American lives no more than nine minutes from a store and we must be able to deliver a highly personalized customer experience within a small box format.

WDS: Is this helping to differentiate RadioShack?

TA: Absolutely. In my opinion no one else is really leading the field in simplifying the experience and creating a dynamic safety-net to help move customers through the pre and post-sale buying experience. We are aggressively pursuing this vision and it will fundamentally define RadioShack’s future.

WDS: Why is the customer experience so important to the retail industry?

TA: The wireless device market has become highly commoditized. The lines between device capability and form factor are blurring between brands and the ‘experience’ is the one thing that will help define the long- term health of a business and create real differentiation.

WDS: Tell us more about your role at RadioShack?

TA: I’ve been in my role for nearly four years and I love the company for its constant drive to improve. Personally I am focused on delivering dynamic and sustainable solutions that improve the wireless experience for our customers, stores and partner. I have a small team that works cross-functionally with all departments to ensure we execute on this vision.

WDS: You’ve been central to the design and launch of the Mobile Product Support program. Tell us about its importance for RadioShack.

TA: The Mobile Product Support program was launched in November 2011 and is a perfect example of a solution designed to complement our customer experience vision. It’s a dynamic customer and store support program designed to help customers get the right product for their needs and get the most from it for the life of the device.

Firstly, matching the right product to the right customer is fundamental, and our in-store tools help our sales associates achieve this. We also understand that the ‘move-in’ period directly after a new device sale is key to building long-term loyalty and profitability so Mobile Product Support gives our customers access to services that help them explore and set-up their new purchase.

WDS: How do customers access the service?

TA: A customer is signed up for the service [for free] in-store. They’ll then be able to download the RadioShack Mobile Product Support app for Android or access a personalized web-portal where multimedia simulators will guide them through set-up procedures for their favorite mobile services. If they run into difficulty, they’ll then be able to talk directly with a device expert through our US-based contact center.

WDS: WDS has been working with RadioShack since 2009 and has been engaged with the design and implementation of this program from an early stage.

TA: Yes. WDS is responsible for the design, development and operation of several key components, including the creation and management of the on-device [app] and web-based tools as well as the contact center. We have a very fluid relationship with WDS that encompasses everything from solution execution to creative design. We have a shared vision to always find new and dynamic solutions to problems!

WDS: Mobile Product Support has been live since November 2011 and is available nationwide through nearly 4500 stores. Was it a challenge to get this implemented across the RadioShack business?

TA: The reality is that devices are only going to get more complex and with this comes increased pressure to provide relevant and timely knowledge to both customers and RadioShack Associates in a way that best suits their needs. Given this, I don’t think anyone ever doubted the value of this program. We of course went through several stages of roll-out to fine-tune the solution and measure its impact on the business. We commenced the original trial in Seattle in June 2010 and expanded to a further three regions in April 2011. We quickly saw a positive impact on several key metrics, including an increase in store sales, an improvement in customer experience and a reduction in costly product returns. We then went nationwide in November 2011.

About Mobile Product Support

Mobile Product Support from RadioShack delivers a customized range of specialized support services spanning in-store, contact center, web and on-device apps to help customers get the most from their smartphone or tablet for the life of the device. RadioShack selected WDS to deliver the nationwide service in an exclusive multi-year agreement that spans specialist support via phone, live online chat, email and forums. In addition, WDS allows RadioShack customers to explore device features, set-up services or resolve their own problems by using online “How To” guides at RadioShack.com and even via a Mobile Product Support application available from the Android Market for all Android devices.

A key feature of the solution is the implementation of the WDS GlobalMine™ platform to connect each of the deployed tools and services. Device, network and service data collected by WDS is shared across the solution components to ensure they are populated with real- time troubleshooting and customer experience information.

“If one of our support agents discovers a problem with a newly launched device, the fix is shared immediately across each of the deployed tools and services. Where the fault may have once resulted in a product return, now the customer will be proactively presented with updates and fixes via online and on-device tools. It inspires huge loyalty to the RadioShack brand and will ensure that the company becomes the mobility retailer of choice for consumers,” explains WDS CEO David Ffoulkes-Jones. To learn more and watch a video of the service, visit bit.ly/RSWDS

Online RadioShack ‘Mobile Product Support’ tools can be found at www.RadioShack.com/MobileProductSupport

22 – Experience issue 1

Helping the wireless industry to build sustainable, value-driven relationships with end-users. wds.co

Meet a WDS customer Tony Andrews,

Vice President Wireless Operations at RadioShack

At RadioShack we understand that this is vital in building long-term customer value and loyalty

It inspires huge loyalty to the RadioShack brand

“

“

”

”

With 4,500 stores, RadioShack is one of the leading retailers of innovative wireless and personal technology products, services and accessories in the US. As a business with a strong wireless focus it takes the customer experience seriously and began working with WDS in 2009 to extend the value delivered to customers not only in-store but post-sale.

Most recently, and as part of its Mobile Product Support program, RadioShack signed WDS to deliver an exclusive, nationwide support service spanning in-store, contact center, web and on-device apps to help customers get the most from their smartphone or tablet for the life of the device.

We talked to Tony Andrews, Vice President Wireless Operations at RadioShack to find out more about the retailer’s customer experience ambitions and its relationship with WDS.

WDS: What is RadioShack’s customer experience strategy?

TA: Retailers haven’t historically invested in the post-sale customer experience but at RadioShack we understand that this is vital in building long-term customer value and loyalty. Our strategy extends beyond the actual purchase of a product and we’re really focusing on the ‘Out of Box’ experience and helping our customers get the most from their RadioShack wireless purchase for the life of the product.

Our customers want convenience, they want value and they want us to be their trusted local advisor. The average American lives no more than nine minutes from a store and we must be able to deliver a highly personalized customer experience within a small box format.

WDS: Is this helping to differentiate RadioShack?

TA: Absolutely. In my opinion no one else is really leading the field in simplifying the experience and creating a dynamic safety-net to help move customers through the pre and post-sale buying experience. We are aggressively pursuing this vision and it will fundamentally define RadioShack’s future.

WDS: Why is the customer experience so important to the retail industry?

TA: The wireless device market has become highly commoditized. The lines between device capability and form factor are blurring between brands and the ‘experience’ is the one thing that will help define the long- term health of a business and create real differentiation.

WDS: Tell us more about your role at RadioShack?

TA: I’ve been in my role for nearly four years and I love the company for its constant drive to improve. Personally I am focused on delivering dynamic and sustainable solutions that improve the wireless experience for our customers, stores and partner. I have a small team that works cross-functionally with all departments to ensure we execute on this vision.

WDS: You’ve been central to the design and launch of the Mobile Product Support program. Tell us about its importance for RadioShack.

TA: The Mobile Product Support program was launched in November 2011 and is a perfect example of a solution designed to complement our customer experience vision. It’s a dynamic customer and store support program designed to help customers get the right product for their needs and get the most from it for the life of the device.

Firstly, matching the right product to the right customer is fundamental, and our in-store tools help our sales associates achieve this. We also understand that the ‘move-in’ period directly after a new device sale is key to building long-term loyalty and profitability so Mobile Product Support gives our customers access to services that help them explore and set-up their new purchase.

WDS: How do customers access the service?

TA: A customer is signed up for the service [for free] in-store. They’ll then be able to download the RadioShack Mobile Product Support app for Android or access a personalized web-portal where multimedia simulators will guide them through set-up procedures for their favorite mobile services. If they run into difficulty, they’ll then be able to talk directly with a device expert through our US-based contact center.

WDS: WDS has been working with RadioShack since 2009 and has been engaged with the design and implementation of this program from an early stage.

TA: Yes. WDS is responsible for the design, development and operation of several key components, including the creation and management of the on-device [app] and web-based tools as well as the contact center. We have a very fluid relationship with WDS that encompasses everything from solution execution to creative design. We have a shared vision to always find new and dynamic solutions to problems!

WDS: Mobile Product Support has been live since November 2011 and is available nationwide through nearly 4500 stores. Was it a challenge to get this implemented across the RadioShack business?

TA: The reality is that devices are only going to get more complex and with this comes increased pressure to provide relevant and timely knowledge to both customers and RadioShack Associates in a way that best suits their needs. Given this, I don’t think anyone ever doubted the value of this program. We of course went through several stages of roll-out to fine-tune the solution and measure its impact on the business. We commenced the original trial in Seattle in June 2010 and expanded to a further three regions in April 2011. We quickly saw a positive impact on several key metrics, including an increase in store sales, an improvement in customer experience and a reduction in costly product returns. We then went nationwide in November 2011.

About Mobile Product Support

Mobile Product Support from RadioShack delivers a customized range of specialized support services spanning in-store, contact center, web and on-device apps to help customers get the most from their smartphone or tablet for the life of the device. RadioShack selected WDS to deliver the nationwide service in an exclusive multi-year agreement that spans specialist support via phone, live online chat, email and forums. In addition, WDS allows RadioShack customers to explore device features, set-up services or resolve their own problems by using online “How To” guides at RadioShack.com and even via a Mobile Product Support application available from the Android Market for all Android devices.

A key feature of the solution is the implementation of the WDS GlobalMine™ platform to connect each of the deployed tools and services. Device, network and service data collected by WDS is shared across the solution components to ensure they are populated with real- time troubleshooting and customer experience information.

“If one of our support agents discovers a problem with a newly launched device, the fix is shared immediately across each of the deployed tools and services. Where the fault may have once resulted in a product return, now the customer will be proactively presented with updates and fixes via online and on-device tools. It inspires huge loyalty to the RadioShack brand and will ensure that the company becomes the mobility retailer of choice for consumers,” explains WDS CEO David Ffoulkes-Jones. To learn more and watch a video of the service, visit bit.ly/RSWDS

Online RadioShack ‘Mobile Product Support’ tools can be found at www.RadioShack.com/MobileProductSupport

22 – Experience issue 1

Helping the wireless industry to build sustainable, value-driven relationships with end-users. wds.co

Meet a WDS customer Tony Andrews,

Vice President Wireless Operations at RadioShack

At RadioShack we understand that this is vital in building long-term customer value and loyalty

It inspires huge loyalty to the RadioShack brand

“

“

”

”