Major changes are ahead for the mobile industry. Historically, carrier focus has been on attracting new customers, but now the market is reaching saturation. With more sophisticated phones and bundled service options, the market is doing little to improve customer retention or attract new users. Additionally, carriers are experiencing increases in operating cost as well as decreases in average revenue per user (ARPU).

Lewis: Don’t risk losing customers by confusing them.

ARPU has been declining due to several factors. Mobile operators have been experiencing increased competition resulting in rising costs. The recent trend toward fixed-rate “all you can eat” plans for mobile service may erode operators’ revenue. Due to fierce competition among mobile operators, adoption of fixed-rate by one operator compels the rest to follow or risk customer loss. Given this, operators are looking for solutions that allow them to differentiate themselves from the competition in order to increase retention and loyalty.

To address this situation, mobile operators are ordering handsets that incorporate new applications designed to increase functionality and ARPU. Operators hope these applications will retain and attract customers; however, they are not seeing benefits from this strategy because customers often do not know how to use the applications and are frustrated by failed attempts to do so.

According to a recent survey conducted by SNAPin Software, most people only use their phones to make calls and send text messages – the easiest services to embrace. Operators need to find a way to provide a consistent experience and educate customers on how to use new applications, which will increase satisfaction and retention.

A possible solution is for operators to adopt technology that intuitively helps customers discover how to use their phones’ features and applications. This creates positive out-of-the-box experiences for new users or existing customers who upgrade phones. Currently, customers are experiencing feature fatigue, characterized by too many features and not enough education about what their phone and operator has to offer.

Providing educational resources on the handset will decrease the number of returned devices and subsequently increase revenue for operators. Customers keep devices they know how to operate and use applications they understand.

In addition to encouraging the use of revenue-boosting applications, access to interactive tutorials also will teach the user about their mobile device, thus decreasing the number of calls to customer service. Many consumers are confused or overwhelmed by the advanced features on complicated phones. If operators can provide a workable, cost-effective solution to benefit the user, call center traffic will decrease significantly and reduce overall operational costs.

Operators are beginning to encourage Original Equipment Manufacturers (OEMs) and Original Design Manufacturers (ODMs) to provide handsets embedded with software designed to help guide the user. OEMs and ODMs can benefit from partnering with vendors specializing in such software, as it will ensure a successful end user experience throughout the entire lifecycle of the device.

Operators can educate customers in various ways:

• Create a positive out-of-the-box experience – Ensure subscribers aren’t overwhelmed or frustrated the first time they interact with their phones. Most consumers avoid reading instruction manuals, so device applications must be intuitive for discovery and use. Contextual support is ideal should the consumer have difficulties.
• Send context-related how-to messages – Send the customer free help messages based on the context of their mobile phone usage. These messages are triggered based on how the subscriber is using their device. If a user takes a photo with the phone but doesn’t send it, the software would then provide a step-by-step interactive explanation about how to send the photo to a friend or upload the photo to an online album. These messages teach subscribers how to use complicated features and encourage the use of additional features.
• Provide troubleshooting tips on the handset – With this type of support, customers will be empowered to solve problems independently and feel confident exploring their phone and its features since troubleshooting tips are easily accessible, should a problem arise.

Enabling subscribers to enjoy one successful experience with their device will lead to repeated use of applications – and potential experimentation with new ones. An educated consumer is better able to understand how the phone’s functionality and ability can enhance daily life.

Sleek and sexy phones are popular, but users are hungry for phones with interesting, useful, relevant applications and functionality. Operators that adopt educational functionality will encourage customers to interact with devices in a completely new way, significantly reducing customer care costs and driving incremental revenue from new services.

Lewis is CEO and president of SNAPin Software.