Singapore's StarHub in April launched Hub Troopers, which it defines as an "elite team of highly trained digital experts." Hub Troopers, Singapore's version of the Geek Squad in the US, offers premium technology services that allow the operator to become closer to its customers, sell addition services, drive revenue and ensure that their customers' digital homes are optimized for consumption of its communications services.
More broadly, this premium suite of services covers technology consulting and education, installation and configuration, integration, protection and maintenance, troubleshooting and triage in the digital home.
Over the last two years, we have seen increased interest from operators around the world, particularly in the US, in launching premium technology services as a direct response to the difficulty they face in differentiating themselves in the marketplace.
The trend is now hitting APAC. Homes are increasingly digital and connected. Singapore has recently seen 10% year-on-year growth in home networks, 26% growth in broadband subscriptions and over the past five years has had a 39% jump in triple-service (cable/broadband/phone) customers. With the upcoming next-generation broadband networks in the region (e.g. Singapore, Australia, Malaysia) the complexity of the digital home will increase, further creating inter-operability and connectivity issues for the consumers. The need for premium technology services will grow.
Why are operators interested in these premium services, which are not their core business and competency? Communications providers are in a unique situation. With new players such as Apple and Google fast entering their markets, competition has become more complex. Going forward, providers must change the game by differentiating themselves in new ways. Premium services change the customer experience by meeting customers in their digital homes and differentiating the provider based on service rather than price. They also ensure content readiness and on-selling of additional services - two strategic objectives that will drive revenue and margins as the provider begins to own the digital home.
Enhancing the experience
Premium technology services bring the provider into the customers' homes, allowing greater visibility into the needs of customers by facilitating more personal interaction, and thus increase their ability to target and meet these needs. Such services also offer the potential for customers to associate trust and emotions with the provider, as many services such as computer repair or data recovery create emotional situations for the customer (e.g. loss of pictures or emails). Contrary to Geek Squad, which is positioned to respond to the customers' needs at the point-of-sale, telecom operators can respond to customers at the "point-of-pain."
Communications providers offer customers an experience that only changes based on their service subscription details (such as TV channels). This can - and should - change. Imagine a provider that can offer to upgrade a customer's cable TV subscription to high definition, and simultaneously install and optimize a HD TV and HD surround sound to maximize the customer's enjoyment of their new channels. The provider improves the customer's experience of their core services (cable TV) while also entering their digital home, and creating a personal and positive experience, which the customer will associate with the provider.
Ensuring content readiness
Communications providers currently operate on the assumption that their customers' technology is ready to consume their content; this is not always the case. A poorly optimized TV will not produce a good picture, and the cable service provider may be blamed for this. Similarly, a provider may offer a lighting fast internet connection, yet the customer's computer may be bogged down by spyware and the customer may erroneously think the connection is slow, and their experience with the provider will suffer.
Offering premium services will differentiate the operator in scenarios where their customers' hardware is not optimized, because the customer will not be left hanging. A customer who has spent an hour or more on the phone with a technical support agent to fix a slow internet issue does not want to be told that the problem rests with their computer, and therefore they must call someone else. All too often providers leave their customers hanging in because they do not provide end-to-end services. Providers currently miss many opportunities to come alongside the customer and transform their communications services situation from frustration to enjoyment simply because they cannot provide this missing link and become a one-stop-shop for their customers.
While these service generate new revenue streams, value also comes from creating more situations in which the provider can up-sell and cross-sell their products. Imagine an agent who enters a home to install a television. While in the home, he notices that there is no wireless network and hears the customer complaining about their son always hogging the internet port for his online games. The agent could suggest a wireless network installation to share the internet connection and allow the son to move his online gaming elsewhere in the house. An agent in this situation has solved the customer's issue, sold additional services and increased the enjoyment the customer will receive from their internet subscription. This is great value for any provider.
The operator's objective is to own the digital home. Communications service subscribers want their products to work and stay working. The provider that develops this capability will be able to come alongside its customers in the increasingly complex digital landscape and help them build and operate a productive and enjoyable digital home.
There is obviously a price to pay for such services, and operators must change their mindset from "free to fee." Traditionally, operators have always provided free support, mainly around connectivity problems. With premium technology servies, they need to move into the "premium" mindset, offering a unique experience for a premium. The good news is that consumers are willing to pay and have a preference for service providers (see figure above).
While popular globally, TV installations, network installations and file sharing are just the tip of the iceberg for premium technology services. Mobile phones are rapidly gaining the ability to control digital functions within a household, media content is increasingly delivered via the internet rather than DVD, and technologies such as power-optimizing control panels and automatically syncing digital photo frames will continue the trend of the interoperability and inter-connectedness within the digital home. Providers that successfully offer services to optimize and maximize the digital home experience will own the digital home and in doing so will steer clear of the damaging effects of the communications price war and thrive in the midst of stiff competition.
Guillaume Sachet is Accenture's lead for communications, media and high-tech ASEAN Strategy; John Candeto is a strategy business analyst with Accenture