For research professionals (and blogging :) the mantra is 'publish or perish'. Adapted for mobile operators, new research indicates that the mantra should be 'provide a personal cloud or perish'. It turns out that personal clouds are truly the best thing to happen to mobile operators for customer retention since 'fill-in-the-blank' (sliced bread, ice cubes or your favorite invention cliche).
In the past month, two major mobile operators have shared primary research with my company that shows that their personal cloud has reduced their churn much more than expected.
In one case, the operator cloud reduced churn by 6x for high value mobile subscribers and 4x for medium value customers. In another, the operator cloud reduced overall churn by almost 10x! Both studies were conducted over a long period of time on a large subscriber base. The studies measured the churn of cloud users versus a control group of non-cloud users to isolate the impact of cloud on people's decision to stay or switch. One operator commented that there were no other discernible differences between cloud and non-cloud users to explain the high retention of cloud users.
The conventional wisdom of operators is that the more mobile services a subscriber uses, the less likely they are to churn. In this regard, cloud could be viewed as just another service. But these data points indicate that the power of the cloud to reduce churn is significantly greater than other services.
This is not surprising, as my company has been saying this for years, but now there is definitive proof. As Donald Trump might say, this is 'Yuge'. It occurs because a personal cloud differs substantially from other mobile services that are a commodity and that are fairly simple, like voicemail and SMS. Maybe a personal cloud will reach that status in time but for now, it is an awesome retention tool, perhaps the best tool in an operator's arsenal, especially given its modest cost.
This better-than-expected retention impact makes the business case for operator clouds much more compelling. We are witnessing a turning of the tide in the interest of market-leading operators. Previously, they insisted on only providing a cloud if it generated significant direct revenue, as their risk-adverse culture dissuaded going down a path of potentially losing money on a service with hard-to-quantify benefits. But with retention benefits that are readily quantifiable and often in the tens to hundreds of $millions, only the most risk-adverse operators can discount this vast benefit. As the adapted adage suggests for operators, 'provide a personal cloud or perish.'