BEST PRACTICES RESEARCH
© Frost & Sullivan 2017 5 “We Accelerate Growth”
Key Solution Requirements
A new purchase to replace a damaged or missing device represents a particularly
unattractive and expensive proposition. Younger generations—particularly millennials—
expect communication services to match their on-demand, always-on lifestyle; and
consumers are frustrated by the slightest interruption of service and point of friction or
inflexibility in the real-time digital economy.
In North America and other developed
markets, carriers have removed the device subsidy for contract renewal and have
transitioned to installment plans. This transition makes consumers more price conscious
about the cost of the device throughout its lifecycle, and results in longer upgrade cycles
and lengthening ownership periods. Greater consumer outlay is pushing a burgeoning
market for consumers and enterprises to insure and repair their device investments to
minimize usage interruptions. Moreover, the decreasing upgrade rates and slower pace of
feature innovation is forcing carriers to consider ancillary service options and reduce
friction points to retain customers and generate brand loyalty.
From pure insurance to comprehensive repair and support plans, mobile protection
providers have grown in scope and depth in response to smartphone penetration in
developed markets. Protection providers recognize that merely financing device
replacement fails to meet and satisfy consumer expectations and the longer the duration
without a smartphone the more frustrated the consumer becomes. As device capabilities
expand and data stored therein represents value, the smartphone becomes the key link in
consumer’s connected ecosystem of home, work, shopping, entertainment, and finance.
Users need targeted help and support to realize the full potential of device capabilities and
applications (apps). Conversely, the mountain of Big Data created and filtered through the
user’s smartphone represents innumerable potential untapped possibilities for value-added
services and personalization. Predictive analytics based on consumer behavior data will
make customer care and anticipatory recommendations significantly more targeted,
moving toward an entirely personalized “customer segment of one” and opening new
opportunities for value-added services.
Frost & Sullivan research believes that managing these customer touch points in the
sensitive moments of smartphone loss/damage affords carriers a critical opportunity to
reduce customer churn effectively and increase satisfaction. Mobile protection providers
must deliver more targeted, higher-value-added support, and protection plans to create
results for carriers. The costs of customer care and device concessions continue to vex
carriers; thus, protection providers strive to create value opportunities that reduce
headaches for carriers and sales representatives outside their core competency. Frost &
Sullivan research specifies that mobile support and protection offerings must consider four
essential pillars: mobile handset protection, mobile data protection, mobile application
support, and mobile device support.
What Millennials Want that Your Systems Can’t Deliver: Flexibility at a Whole New Level (Frost & Sullivan, June
2016).
Outlook for New Business Models and Consumer Driven Strategies in Digital Consumer Lifestyle: Striving for New
Business Models Built on Trust (Frost & Sullivan, November 2016).
The Global Need for Mobile Support and Protection Services: From Handset Protection to Mobile Technology
Support and Beyond (Frost & Sullivan, January 2015).