Flushing Profits: The On Hold Drain

Anna Yong

On NPR today, they covered a survey by Jacada, an Atlanta-based customer service software company found that people tend to multi-task while on hold. In a survey of 1000 people their results were:

What People Did While On Hold

• 36% went to the bathroom
• 26% made a meal
• 25% watched a full TV show episode
• 17% completely cleaned a room
• 16% played two or more games of solitaire
• 14% read an entire magazine or newspaper

http://www.npr.org/templates/story/story.php?storyId=104505494
But really, is being on hold even necessary? Even if customers can find something else to do, being hold actually decreases loyalty and satisfaction. “Switching levels are 83 percent higher among customers who are put on hold, compared with those who are not." J.D. Power and Associates, Aug 2008 http://www.jdpower.com/corporate/news/releases/pressrelease.aspx?ID=2008120

So as refreshing as a potty break might be, do you really want to risk the higher churn rate cited by J.D. Power, or might it be better to arm your CSRs with the tools they need to effectively help customers, fix phones and let your subscribers get on with their day?

The Rise of the Androids Redux - Klaatu barada nikto!

Jason Lackey

By now many have likely at least seen an Android phone and the device fetishists amongst us have probably even played with one. The first of the line, the HTC/TMobile G1, is a strong first effort with one of the best browser experiences on the market. Indeed, it is largely because of the browser that noted pundits such as Om Malik put the G1 in the rarified superphone category, along with the iPhone, upcoming Pre and high end Blackberries.

HTC has followed up the G1 with the Magic, which looks to be a serviceable piece. HKC, a Chinese maker, has the dualboot Pearl. Samsung's I7500 should be in stores very soon now and has every indication of being a very desirable piece.

Matt Richtel, of The New York Times reports that Andy Rubin, who runs Google's mobile efforts, announced 18-20 devices at Google I/O (developer conference in SF). The thing about open source is that anyone who wants to can run the basic stack and there will be phones running Android that Google has never heard of. I am sure that many of the blossoming Chinese makers will be unable to resist the combination of pricing (free) and features (good).

At InnoPath, we have seen considerable interest from a variety of directions, domestic and otherwise, in device management for Android. We announced support for Android on 23 September, 2008. Back then there was a lot of curiousity, but now we are seeing indications that real people are building a lot of real phones and they are looking for device management and other solutions for Android now. Personally I am really looking forward to seeing some of Motorola's efforts, rumor is that they are on their way to being an almost exclusively Android shop. I would love to have an "American" phone with software from Mountain View, where I live ;-)

I've fallen and I can't call help! Samsung's 911 Jitterbug

Anna Yong

Today I noticed that Samsung was recalling 160,000 Jitterbug cell phones because “When the recalled cell phones are in a no-service area and display an "out of range, try again later" message, they could fail to connect to emergency 911.” As part of the recall “Samsung and Jitterbug are directly contacting consumers to schedule a free software upgrade.” (http://www.cpsc.gov/cpscpub/prerel/prhtml09/09744.html)

Wow. Think about the logistics of this. Calling 160,000 customer takes at least 2 minutes, and therefore $2 of CSR labor and costs. That’s $320,000 right off the bat. Now Jitterbug needs to actually have the customer bring the phone back to the store, get it upgraded, which could probably take another 10 minutes at least – and that’s for a trained professional that probably costs $2 a minute. So $32k just to notify people , and then 160k * $20 = $3.2 million dollars to update the phone. All for a free software upgrade which could have been done remotely if the phone has been designed to include updates over the air.

Considering the fact that “Jitterbug was created for people who prefer a simple, easy to use cell phone, a friendly, helpful service experience”, perhaps a little bit of technology built into the phone ahead of time, would have saved a lot of headaches afterwards.

Where's My Cupcake?

Jason Lackey

One of the many cool things about working in wireless in general and at a device management company like InnoPath in particular would be....devices! We always need to keep on top of the latest and greatest, so we have a cool assortment of commercial and prototype devices coming through here. If you are of the nerdly persuation, this is powerful good stuff indeed.

One of the more interesting toys to come down the pipe has been the Tmobile G1, the first Android phone. All in all, a reasonably solid smartphone that is in some ways almost as slick as an iPhone and almost as stable as Symbian with one of the best browsers and a big, bright, lovely screen. Some fatal flaws, like lack of real Exchange support, but what fun would a first effort be without some sort of missing features or blemishes?

The phone we have here is currently on Firmware Version 1.1, we have been through one update, which was pretty slick. With Cupcake, the 1.5 FW being out, I am of course eager to get my hands on it.

Here is the sticking point. One of the rules of good UI design is that you should never tease the user or create expectations that are not going to be met, but that is what happen here. We know that Cupcake has been released, and the UI of the phone has a place where you can check for FW updates. Thus the expectation is that even if there is a FW push going on that has not reached the device that a client initiated update done from the phone would be successful. In this case, checking for an update just gets you "Your system is currently up to date".

One of the lessons I learned from a long and painful stint in corporate IT was that managing expectations was key, perhaps even more important than overall technical excellence. If you set expectations right and kept people updated, they usually didn't complain too much no matter how hosed up things were. In contrast, technical excellence meant little when the unmanaged (and often unreasonable) expectations of the unwashed masses were not met.

So clearly the hard part is building a new version of the firmware and coming up with a decent OTA distribution system. Clearly the easy part is manipulating a string such as "Your system is currently up to date" which could easily be manipulated to say something like "An update for your phone will be available shortly" or better yet, do the push such that the main push happens on schedule but client initiated jobs are allowed priority. Even home networks can handle QOS these days and let VOIP traffic have priority over email, business processes probably should be able to do the same.

So, where's my cupcake?

How Much is that Smartphone in the Window

Dave Ginsburg

So there’s been a lot of discussion lately about where subsidies are going for the current crop of smartphones. To put it in perspective, just today BGR ran a story (http://www.boygeniusreport.com/2009/05/12/att-blackberry-curve-8900-to-run-99-with-a-2-year/) that included a chart of AT&T list and subsidized pricing. As an example, the FUZE, an HTC device, runs $499.99 list and $299.99 under a two year plan with rebates. At the other end, the Palm Centro is only $279.99 list and just $49.99 under the same plan. Interestingly, the new Nokia E71x, a phone that received a great deal of publicity when launched at CTIA this year, is only $99.99 after rebates. In comparison to some of the Blackberry and Samsung models, it demonstrates how aggressive Nokia is in entering the US market.

Now, what would be interesting is a parallel to the (mostly) public price sheet. A yin and yang, if you would, of the smartphone world. But this sheet would outline the true cost to the operator of supporting the handset. For example, by model, it could outline how many calls they receive, the reasons for each call, and how long they take to resolve. The operator would know if working the subscriber through email settings is much more cumbersome on one OS platform or model than another. Although some of this analysis may currently go into what the operator is willing to offer as a subsidy or even what handsets they are willing to carry, I don’t think this is the case given the lack of good analytical tools.

Think of it as akin to a gas guzzler tax for cars, but in this case the consumable is tech support minutes. Operators would be more careful in inviting into their network devices with known support issues, would be more careful on the subsidy, and would be more open to devices that had a demonstrated support advantage. Here is where technologies such as over-the-air device management will come into play to help create a more efficient and therefore less costly support environment. A handset vendor delivering a phone to an operator with such management capabilities will have a financial advantage, able to demonstrate up-front lowered lifecycle support costs. This much like selling a more fuel-efficient car. Although at InnoPath we’ve done most of our ROI modeling with the operator in mind, the handset vendor’s perspective helps complete the picture. It not only takes millions off the cost of delivering frontline support by the operator, but results in additional handset sales to the operator as well. And it will help add another datapoint to answering the question we seem to ask all the time… just how do they calculate the subsidy?

The End of The Mobile Gravy Train?

Jason Lackey

Analysts are a funny lot, sometimes they can put a spin on something or call attention to what should be a fairly obvious megatrend and it can cause a ruckus.

JP Morgan's Mike McCormack is an excellent example, writing:

"With high wireless penetration, more aggressive competition from prepaid, and the struggling economy as a backdrop, wireless subscriber growth at AT&T and Verizon continues to decline. After falling below 10% for the first time in more than five years last quarter, postpaid subscriber growth was 8.8% and 8.7% for AT&T and Verizon, respectively, in 1Q09. While postpaid add growth at AT&T has outperformed declines at Verizon, we believe the company is unlikely to duplicate its past success absent a meaningful product refresh from Apple (which would likely impact margins)."

Uh, yes. The US is a mature mobile market. There are only so many people in the country and many of those people and most of the ones who want mobile phones already have them. Once you reach the point where everyone who wants something already has it then double digit growth is going to be hard to achieve. The game then becomes a zero sum effort and your gains will come at the expense of your competition. These things should be obvious.

Sometimes, you find that the analysts can actually miss a pretty big trend, or at least be surprised when it rears up and bites them in the posterior:

"The move to devices driving subscriber behavior is disturbing, in our view, taking the carriers out of the driver’s seat and commoditizing the carrier’s networks."

Couple things here. One is that for the past several years, both the wireless operators and the OEMs have all realized that devices sell and that having sexy cool devices is of vital, critical importance, particularly in markets like North America where you find that phone and wireless service tend to come from the same place and that subsidized handsets are the rule rather than the exception. There is a reason why device makers feel an intense and burning need to get their devices to market in a hurry. In other markets, like Europe, where GSM has been dominant forever, the phone market is much more like the PC market here, there is no binding between AT&T or Comcast and your Dell or HP PC, your Nokia can work on any network and when it is time for an upgrade you can go to Carphone Warehouse, score a phone, pop your SIM in and be done.

In the US, where the subscriber has been trained to view the handset as being tied to the MNO, probably a mindset going back to the good ole days of the Western Electric Model 500 and before, where even the handset was viewed as belonging to the phone company. As an interesting aside, I know from personal experience that the Western Electric 1500, the touch tone replacement for the Model 500, was so well built that it would stop a .38 Special bullet at point blank range. I doubt that my HTC Raphael (or Touch Pro or Fuze) would do the same. Two year contracts and subsidies, where the wireless network operator pays for a big chunk of the handset up front, are a big part of this game. Of course it ends up being a contest on two levels, one being to have the least offensive plain phone for making phone calls at a close to zero dollar post-subsidy price and the other being to have the coolest possible phone at what has historically been about $200 post-subsidy, altough there are signs that this is moving in the direction of $100.

Clearly, with no unplowed, virgin fields remaining, there will be increased competition in mature markets, North America being one of them. There will be pressure to ship better devices, faster, cheaper with more bells and whistles. With many of these phones shipping with data capabilities, increasingly including things like email and web browsers that are actually worth using, savings are unlikely to come from reduced network utilization.

What are the operators going to do?

There are some, like us at InnoPath, who would say that there are a couple things that they can, should and in some cases already are doing that will help. One of the things that North American Tier 1s are already starting to do is to use FOTA (Firmware Over The Air) to fix bugs over the air. Long and short of it is that phones ship with bugs, and that complex phones with lots of features that are rushed to market may ship with a number of bugs. With FOTA, these bugs are easily fixed and fixed in a way that is transparent and easy to the subscriber. Saving the cost of recalls and returned devices can make a significant impact, in some cases $200 or more per incident.

Another thing that operators can do to help deteriorating margins is to enhance their customer care organizations with mobile device management. We have seen that support, particularly smartphone support, is hard and expensive to deliver well. Indeed, smartphones cost roughly 4x as much to support as their dumbphone cousins and the stakes for failing to deliver on support are higher too. With a dumbphone, maybe you lose a voice sub. With a smartphone, maybe you lose a high ARPU data services customer or leave a bunch of money on the table as the sub who never could get email or internet to work ends up cancelling data services which are not needed if email is broken. We have also seen the price that an operator can pay for treating support as a cost center - witness the example of the North American Tier 1 who fired its worse customers, only to find itself in a sea of churn. Better support, delivered in a more cost effective manner, ensuring that high ARPU services actually work, well, that sounds like something that would be real nice to have in a maturing market.

However, it is not just the mobile network operators who can benefit from this type of technology. You find that some OEMs are responsible for supporting their own devices. One noteworthy example is Apple, with the iPhone. Now that the iPhone has conquered the top of the smartphone market in the US, the only place left for growth is down, expanding into lower cost market segments. While this will help provide volume, there will be downward pressure on margins. When looking at millions of devices in North America alone, the ability to shave a couple minutes off every support call can start to look appealing. Apple isn't the only one, Nokia provides FOTA updates for some devices already and other OEMs are increasingly interested in OTA support and the advantages it can bring in terms of time to market and better end user experience.

Mobile phones - Progressing or Regressing?

Anna Yong

Lately, I’ve been noticing that my smartphone is behaving rather erratically. Erratic to the point that it crashed in the middle of a phone call. And I’m sure that the propensity of this happening is MUCH higher than it was in the past with previous, simpler generations of mobile phones which only made phone calls, plain and simple. (I seem to remember, that any time I needed to call on my now ancient candybar cell phone it always worked.)

Don’t get me wrong - I love the fact that I can surf the web, check email, text, take and send pictures and more, with my multi-faceted phone. I consider this progressing. I don’t like the fact that it would crash in the middle of a phone call. This is regressing. Mobile device management is the technology that helps ensure a phone working at its best, and would have prevented this regression in my phone’s behaviour.

If we have the ability to ensure progress, let’s make sure it applies in parallel to both what my phone can do, and how well it does it.

Downward Spiral to the App Store

Jason Lackey

Trent Reznor, better known to millions as the lead man of industrial metal band Nine Inch Nails, has a gripe with Apple and the App Store thing, and he is correct.

Let me set the stage. Unlike many other smartphones, Apple controls who can put software on the iPhone. The way this is done is by making the Apple App Store the only (official) way to install software on the device.

OK, fine you say. Apple feels that the end-user experience is important so they filter out crap to keep their users safe. We certainly wouldn't want people installing fart noise apps or baby shaker games, right?

The Nine In Nails folks came up with a pretty slick looking app - a dedicated portal into the body of good stuff available on nin.com all formatted and optimized for the iPhone. If you are a Nine Inch Nails fan with an iPhone you would probably want to have this application.

Unfortunately Apple seems to be having trouble scaling their App Store approval process or being consistant. Let me explain.

The problem that Apple seems to have with this application is content from the album "The Downward Spiral" (damn fine album and a good part of the soundtrack to some of the more interesting parts of my wayward youth). Yes, to be sure there are lyrics that are obscene, but they are just as obscene on iTunes, also run by Apple. Sure, it is understandable how these things can happen - different organizations, different people, but in the end the public sees it all under the Apple umbrella and expects that the different arms of the organization would follow the same rules.

Interestingly this type of failure is not uncommon. Indeed, many who comment on customer care advocate "rep surfing" - the practice of calling for some sort of issue and then if you don't get the answer you want to hand up and call again, knowing you will get a different rep who might give an answer you like better. Many companies have websites that breathlessly ask for your feedback and correspondence yet nobody answers the phone, replies to emails or answers the stupid form that you filled out. Not such a big deal, except unmet expectations are hugely annoying. A phone number or email combined with text about how "We are eager to hear from you" creates the expectation that you will be able to contact someone. If you cannot get there from here, fine, not a big deal. Kind of like having kids, tell the kids that there is ice cream tonight and you better have that ice cream on hand. Other times it might not be a big deal, but once you promise you better deliver.

I suspect that the answer might end up being to have a multi-tiered arrangement in the appshop where in the clean, well lit area everything is Disney clean, while in the somewhat seedy parts there are fewer restrictions but it will be like a trip to the Tenderloin - you can do whatever it is you want but there may be sights and smells that you will not be able to soon forget.

Anyway, hope Trent, NIN and Apple sort things out. Apple products are hugely popular here at the office and I am personally looking forward to seeing Nine Inch Nails (with Jane's Addiction!) at Shoreline on May 22. Should be a really good show. Wonder if Trent can figure out how to rep surf the App Store?