CEM

EXPERT
OPINION
Chris Yeadon is
director of product
marketing for
Convergent Billing &
Customer Relationship
Management at
Ericsson
Craig Schafer is a
revenue monetisation
consultant at Ericsson
How to build an experiencebased
pricing solution
Previous articles in this series examined how communications service providers (CSPs) have
generally considered pricing off-limits as part of their strategy for profitable monetisation. This
third and final article, written by Chris Yeadon and Craig Schafer, explores what is required to
implement EBP in terms of OSS/BSS
I
n the earlier articles in this series we have looked at
how experience based pricing (EBP) could
potentially be a powerful strategic instrument for
capturing value in the networked society. EBP is
about breaking down a consumer’s communications
experience into individual chargeable components
that can be packaged and priced based on context. The
second article in the series discussed how this might look
in practice, and explored the potentially strong position
CSPs hold given their ability to control the customer
experience from the core network to policy and chargingbased
packaging, billing and payments, and customer
interaction.
This third and final article explores what is required to
implement EBP in terms of OSS/BSS (Operations and
Business Support Systems).
Deliver a valued
customer experience
Some CSPs continue to see their value only in terms of
the quality and performance of their networks. In reality,
however, consumers increasingly take even the best
connectivity for granted, and see apps, over-the-top
(OTT) services and the features and functionality of their
various devices as the most valued and important part of
their experience. For CSPs to profitably monetise the
exponential increase in traffic flowing over their networks,
they must look beyond connectivity and begin charging
customers for services according to context.
EBP is about addressing the needs of individual customer
micro-segments with innovative package and pricing
structures, and using context to dynamically set the
optimum price for the experience sought by the
customer. This approach dominates the video gaming
industry. Game pricing has evolved from charging a flat
price for each game (based on its quality, complexity and
graphic sophistication), to contextual pricing within the
game after a relatively low initial purchase price. Once
players are involved in the gaming experience, they are
offered better functions, better weapons and better
defences that can be purchased for additional payment,
and even resold to other players at market prices. The
value of each component is based on the experience and
the player’s subjective value of them – leading to new
revenues and profits.
OSS/BSS: The enabler of EBP
Implementing an EBP-centric strategy will require a new
mindset, one that recognises price as a strategic
differentiator. It may also require a major transformation of
OSS/BSS architectures. Specifically they will require an IT
environment that is fully integrated from end-to-end,
starting at the core network, through the service control,
charging and billing, product orchestration and customer
interaction layers, enabling the CSP to control seamlessly
the entire customer experience. Crucially, it should also
include analytical capabilities providing real-time insights
about the customer profile, usage patterns and
experience.
Successful EBP is not just about having all the right
pieces. The key is linking them in a way that allows action
to be taken instantaneously and intelligently in the context
of the current customer experience.
The missing element
To realistically enable Experience Based Pricing, the Basic
Architecture in Figure 1 needs one more key element:
intelligence that can act across all layers to make them
fully interactive. Analytics, for example, must affect, by
▲
IN ASSOCIATION WITH ERICSSON
16
VANILLAPLUS MAGAZINE I AUGUST / SEPTEMBER 2015