Use Case

Device Upgrade Conversion

Boost customer loyalty and reduce churn by using behavioral data to offer customers the right device upgrade offers, based on deep understanding of their interests and brand affinities

4 min. Read

When telcos are looking to recontract or upsell a customer tariff, offering the consumer a new device is hugely useful in securing both additional ARPU and loyalty. But in a changing environment where many customers are reducing how often they upgrade hardware, getting this right can be a challenge. With complete access to customer data, telcos can improve their targeting and make sure they’re providing the devices their customers actually want.

Improving the odds of securing a device upgrade

Converting a device upgrade for a customer offers great potential. Get it right and you can move the needle on CLV, account profitability, retention and customer satisfaction all at the same time. But getting this right is difficult, as you have to know exactly which customers will be most receptive to these efforts, what the best offer for their needs and interests is, and how and when to best frame your offers.

There are a wide range of factors that go into determining what might trigger a successful device upgrade offer and which devices would be most suitable for which customers, and some of these are more obvious than others. 

For example, do their usage patterns indicate they are passionate gamers? Does their weblog data suggest their current phone is mismatched with their interests, based on observed patterns of behavior and traits? Does a change in their patterns suggest a new financial situation, either for better or worse? If so, which alternative devices should telcos be offering to stand the best chance of success?

Being able to input these factors into your decision-making is only the start. You also need to be able to match the right messaging to the correct customers, as well as deliver the message at the right time. Behavioral data can help you understand which of your customers will be invested in the latest hype, require the latest data speeds sooner, or who needs a device and tariff designed to reduce the risk of unexpected spend. 

These decisions will be based on a wide variety of metrics. Human beings are emotive and ever changing, and as a result can not be stereotyped. To see success, you need to understand them as humans, which is the first step in developing richer opportunities.

In turn, this can help you develop sophisticated campaigns that are tailored to these behavioral traits and, by understanding their brand affinities and interests, create emotive language and imagery to best optimize response rates. 

Delivering better relationships for telcos

Getting device upgrade conversions right is about improving on the value of existing users – both in terms of direct profitability and fostering a more positive overall relationship that can translate into long term customer value. This is often an area where operators struggle in an industry that has been traditionally more closely focused on mass-marketing and customer acquisition. However, with the right plan, your approach can contribute to significantly higher average revenue per customer (arpu) and overall customer lifetime value (CLV).

For instance, successfully increasing a customer’s tariff at the same time as a device upgrade can improve the profitability of an account. This could be a higher-priced tariff or the addition of a second tariff for a second device, depending on what your analytics suggest the customer is most likely to be interested in.

Getting the timing right is also vital, and there are many more factors that go into this than just the end-date of their existing contract. Weblogs can tell you a huge amount about what a customer’s circumstances are and when they might be more willing to consider an offer. Are they ready for a family plan that incorporates an additional device, for instance? Or do increases in data usage and type indicate they might consider an upgrade to a 5G-capable handset and associated higher tariff? Focusing on interests, lifestyle and financial situation can all improve conversion and NPS among customers.

Being able to analyze real-world customer data helps telcos understand what their customers actually want – and this may not always be the latest hero product. For instance, older, lower-end hardware that is being phased out can still offer major opportunities for telcos. If the data shows customers will be interested in such items, you can often get better deals by acquiring devices cheaply from manufacturers in bulk, or by responding quickly to spot markets when circumstances change. 

Offering device upgrade opportunities can come with increased high risk for telcos, due to the costs associated with modern devices. However, get them right and they can also be one of the most rewarding tools a telco has. Being able to maximize such an offer is critical to financial performance across key performance indicators including average revenue, customer lifetime value, profitability, retention and net promoter score.

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