Trouble-Free Revenues

Ten tips on incentivising wireless hotspot site owners, and maximising traffic and revenues.

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By  Richard Agnew Published  June 3, 2003

Introduction|~||~||~|Middle Eastern operators have caught on to the potential of wireless local area networks (LANs) as a new revenue stream and opportunity to introduce customers to new mobile and portable data services.
Yet the difficulty for carriers in this space is that for the first time, they have been removed from the customer by the site owner, such as hotel or café operator, in terms of service delivery. Therefore, if the customer’s experience is dictated by his interaction with the site rather than directly with the network, how can the carrier drive traffic while aloof from the interaction with it? This article explores ways in which the wireline or wireless carrier can drive traffic at the hotspot, and how this symbiotic relationship can best be managed.

1: Incentivise, Reward and Punish

All hotspot site owners need to have sight of the business proposition. As the service evolves and is popularised, revenues will increase, and site owners must be given a view of market forecasts, projections and potential rewards.
In addition, carriers should not make the mistake of allowing site owners the luxury of offering the service as an ‘add-on’ to their core product, something that is an added extra. If site owners think in this way then they will not be driven to increasing traffic at the hotspot. They will merely settle for having the service available. All site owners should be provided with a share of revenues, including roaming revenues, and encouraged to deliver increased return for increased traffic. Site owners should be goal driven and incentivised with greater percentages or bonuses if they reach set traffic thresholds across a time period. A league table should be established, appropriately segmented by site floor area, to identify top performers and weaker sites. The weaker sites should be encouraged to do better, and problems with performance should be identified so they can be addressed. In some circumstances, support for the site could be withdrawn, as all sites remain a drain on the carrier’s resources.

2: Embed the service in a process
Clearly defined processes for error management, reporting and access to support should be established early on in the delivery of the service. Given the technical issues associated with operating a hotspot, a help desk and main point of contact should be established early on in each location.

Where problems crop up on a regular basis, there should be a standard reaction process — the site worker should have a FAQ (frequently asked questions) sheet and an escalation procedure available. There should be set compensation rules where appropriate, thus ensuring the customer experience remains solid. There should be clearly defined reporting procedures for passing information on regular errors back to the host carrier. There should also be regular feedback sessions with site owners.

All of these processes should eliminate uncertainty in the consumer experience, and deliver a consistent, more controlled service.


3: Train the staff
Working in McDonald’s is not quite the hi-tech world of the future, but with the introduction of wireless LANs into its restaurants in the US, Japan and other countries announced in early 2003, an interesting mix of businesses has been presented. The move, however, presents difficulties for the restaurant owner in delivering support for its wireless LAN user base.

Staff training sessions in these locations should, where possible, focus on service, customer care and processes, rather than expecting non-technical staff to sort out DHCP (Dynamic Host Configuration Protocol) connections and Access Point configuration issues.

4: Service Level Agreements
Service Level Agreements are a sometimes-controversial part of partner relationships in the telco/cellco business. However, there is a quid pro quo scenario with wireless hotspots, where the management of the relationship between the operator and the customer is being partially delegated to the site owner.

Just as the operator can promise the delivery of a certain standard in technical terms, the hotspot site owner can deliver in terms of customer care. The delivery of this is an essential protective layer for the operator seeking to drive revenues from Wireless LANs, yet also protect its customers from the uncertainties of third party intervention in the value chain.


5: Be Flexible
Different sites have different attributes. Some are big, some are small. Some are high street, flagship locations, some are backstreet, ‘niche’ locations. Some hotspots are in high-profile catchment areas, such as airports and campuses. The differences in each hotspot, and their potential, should be understood and settlements with site owners should be negotiable. For example, one location that opens an extension should be permitted a change in status and the appropriate settlement plan. Hotspots that open new branches should be entitled to benefit from multiple locations contributing to volume bonuses, with obvious caveats. Just as performance should be rewarded, change should be acknowledged in the status of a hotspot partner.

6: Segment and Categorise the Location
As mentioned above, each hotspot has its own characteristics. The management of these sites should therefore be segmented and organised as if they were customers. Just as a customer has attributes such as age, sex, home city and so forth that inform as to their profile and requirements, so too hotspot locations have attributes that let us know how they should be treated. Characteristics such as size, the year in which the business was established, the core business, location, and others help define segmentation for each hotspot. Multi-branch partners may have hotspots in different segments, where segment is driven by location. For example, Wi-Fi cafés in the business district of a major city will be more appropriate for bandwidth hungry road warriors, and should therefore be in the ‘Business District Café segment.’ A business decision should be taken on whether or not that segment should be further divided according to the size of the location. Dynamic segmentation, achieved through a rules based approach to business model management (i.e. in the billing, rating and revenue sharing software systems that support the business model) is critical on this point.

7: Personalise and Localise the Experience
Each experience is different. McDonald’s seats are designed to become uncomfortable after a set period of time, while Starbucks are happy to accommodate business travellers for long periods. The business traveller is less likely to have screaming kids in a Starbucks, which can help. Outdoor hotspot locations present other experiential concerns — one can’t look at a laptop screen comfortably in the sun for more than about ten minutes. In addition, different things are desired in different places. In McDonalds, there’s a good chance that a family or children might accompany the user, and they can play at while the user make a phone call. At Starbucks, perhaps the splash screen introduction could show promotions such as the day’s offer on Columbian Rich Roast. At the library, college offers and student loan advertisements could also be made available.


8: Apples, Oranges and Burgers: Integrate with Caution
McDonald’s are famously offering one hour of free-access with an Extra Value Meal. A WiFi Burger with Cheese? The combination of these two products is an innovative proposition, and it will be interesting to see how the businesses develop. The combination of coffee and Wi-Fi access in Starbucks restaurants, and ‘pizza-with-internet-access’ in Pizza Hut represent similar propositions that may have a perceived value to the site owner, but less value to the carrier supplying the traffic. This can be an important part of the site owner’s strategy, and needs to be taken on board as part of a packaged offering to the site owner.

9: Deliver value to the partner
Reporting and business support information are vital elements of the partner business. The partner needs to have visibility of the usage patterns and requirements in his own location.
The operator, as the central metadata repository in the wireless LAN value chain, holds the key to this information, and the timely and detailed delivery of these reports offers the operator a chance to keep the partner happy, and similarly leaves the partner devoid of the ‘I didn’t know’ excuse when thresholds are not met and performance slips.

10: Understand the partner business
Cafés, hotels and airports are very different businesses, and they are certainly not communications businesses. It is important to the site owner that the carrier supplying the network understands its unique concerns, and can offer packages that are tailored to suit the needs of its customer base. Just as restaurants are looking for new revenue streams, they are also looking for ways in which to sell more food. An acknowledgement and awareness of these issues will always garner respect and help to establish a mutually beneficial relationship.

Anthony Behan is vice president of marketing development at Am-Beo.

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