For the mobile industry and the operators it is always a Catch 22 situation. Surprisingly, the global recession has not resulted in a drop in the number of new subscribers or talk time or a decrease in data transfers. But yes the ARPUs have been impacted and so have the bottom lines and the stock prices of mobile operators. The competition has increased. The success of a mobile operator lies in transforming these challenges into opportunity by taking the ownership of mobile medium and leveraging its unique strengths.

For cellular service providers already struggling to deal with dual challenges of declining ARPU and increasing churn, the current economic conditions pose additional challenges. In today’s competitive landscape, mobile operators can no longer rely on conventional competitive tactics such as price cuts, promotions and basic product bundling to maintain their edge in the consumer segment. Shifts in customer demand and a changing competitive landscape are compelling operators to redefine strategies.

As the trend is, revenue growth of most of the operators is now attributed to the increase in the adoption of non-voice services. The market requirement is not “this service” but “which service”.

Unlike traditional voice and data services, the new value added services have shorter life cycles, are highly dynamic and cater to micro-segments. Moreover with a broad portfolio of products and services to choose from, customers are highly demanding and are finicky. An operator’s success depends on the extent to which their marketers can reach out to customers in a personalised manner, with products and services that may be most relevant to them. This is possible only by understanding a customer’s unique preferences and needs and highlights the need for putting the customer relationship at the centre of marketing activity.

According to Gartner, one of the major trends that would influence how well operators will perform would depend on how soon they upgrade to customer centric marketing. With consumer confidence at a low across most regions amid the recession, they tend to avoid adopting new services that are not free. This trend is expected to push carriers to become creative marketers and focus on retention, customer loyalty and demonstrable value. Adoption of more aggressive customer loyalty programs by the operators will be the key to revenue enhancement and retention.

Currently, one of the main problems faced by the operator is the disconnect between marketers and customers. It is in this context, mobile is emerging as a powerful marketing channel for the operators. The ubiquitous handset is offering new opportunities to make inroads into the consumer’s mind space. Recognising the ubiquitous nature of mobile and the increasing popularity of the SMS especially with prepaid segment and low income groups, the operators are turning to this medium to tap those hard-to-reach demographic groups.

No doubt mobile as a marketing channel works for Operator – the ringtones, CRBTs, news alerts are fetching thousands of dollars for the operators. Increasing capabilities of mobile phones, faster networks like 3G and interactive mobile applications are fuelling the demand for more content and data services from the customers. The traditional marketing mix like print ads, bill boards, and television commercials may not work for the successful marketing of new products and services. In the operators’ world, a concept called mass no longer exists; each subscriber has strong and unique preferences. Successful marketing is all about understanding and responding to unique customer needs in real-time.

Being the owners of mobile media, Operators are in a better situation to exploit the unique advantages they have in the value chain. However, mobile marketing is not as simple as it may seem to be. Being a personal and intimate channel, subscribers are highly sensitive about the messages they receive on the handset. So the success of a mobile marketer depends to the extent to which he can make the messages relevant, contextual and personalised. This is only possible if the marketer has access to fresh customer data like the profile, credit balance, spending habits and preferences.

Currently the data within the operator’s network is spread across multiple systems in multiple formats.  It is quite possible that the VAS marketers cannot merge a list they have with the one maintained by the call centre or billing department as they are scattered in disparate systems and not integrated with each other. Pulling it together is a time-intensive and expensive affair. Most of the operators still rely on manual systems which lead to costly errors. In the process, they also run into the risk of customer ire. Unsolicited marketing from irrelevant sources and lack of control over frequency of messages sent turn off the customers, and stimulate higher churn rate. Seems that the time is apt for the operators to tighten their control over the media and leverage the unique characteristics of mobile by playing a more proactive role.

According to industry analysts, problems for the operators are deeper. There is often lack of synergy between various departments - marketing, sales, customer services and IT. This leads to inefficiencies, delays and unnecessary costs and overhead.

The operators need to ensure that they develop a viable and sustainable business model that does not alienate consumers and damage both their own reputation and that of the brands using the service. A push campaign can no more excite a subscriber as it used to. It has become imperative for marketers to stop compulsive selling and focus on enhancing relationship with customers. Each campaign should trigger an on-going conversation with the subscriber. To unlock the full potential of conversational mobile marketing the operators have to encourage their marketers to be more agile and creative. While ensuring creative freedom to marketers, the operators need to enforce discipline and control over factors like spam, messaging frequency and time of message delivery which have direct impact on customers.

All said and done, subscriber communication is more a strategic decision which should begin with a change in the operators’ mindset. The operators will need to experiment with different ways to transform the businesses and operating cultures in order to prosper. If the service providers understand this and adapt to conversational marketing, the global recession is as good a time as any to get moving.