AT&T Wireless product managers are adding subscribers, but are they doing it the right way?

AT&T Wireless product managers are adding subscribers, but are they doing it the right way?
Image Credit: Wikipedia

How would you like to have the job of being a product manager at a wireless service provider? Admittedly, it would be an exciting job. Wireless services bring in a great deal of money so there would be no questions about your product being a success, the real question would be what could you do to your product development definition to make it more of a success? Over at AT&T wireless the product managers appear to be successful because they are adding more and more customers. However, are they really going about this in the right way?

All New Customers Are Not The Same

In the world of wireless service providers, it’s all about having the most subscribers. Since this business is a subscription business, once you get a customer, you’ll get a check from them each month for as long as they stay with you. In the wireless business, pretty much everyone has a wireless phone by now so if you are going to get a new customer that means that you are going to have to take them away from you competition. Get good at doing this and you’ll have something else that you can add to your product manager resume.

The AT&T product managers have been doing a pretty good job of getting new customers. They believe that they are on track to add 800,000 of the most valuable type of customers: post-paid. In the world of wireless there are two primary types of customers: pre-paid and post-paid. Pre-paid are those customers who give the wireless provider cash and then proceed to spend it until it’s all gone and their service gets put on hold until they pay more money. The post-paid customers use the service for a month and are then presented with a bill that they pay. Post-paid customers are more valuable because they spend more and are less price sensitive.

AT&T’s product managers are locked in a fierce battle with T-Mobile. T-Mobile has been offering to pay termination fees and dropping international data roaming fees. This has caused existing AT&T customers to switch over to T-Mobile. Clearly bringing more customers back to AT&T is a critical goal for its product managers.

What Long Term Customer Value Really Means

The problem with how the AT&T wireless product managers are going about adding new customers has to do with something that is called “long-term customer value”. In the world of wireless, it turns out that your best customers join up for what is called a subsidized plan. Under this plan, customers get fancy phones for either free or very low prices. The company picks up the additional cost of the phones and then makes it back in the form of higher monthly rates for the service.

AT&T’s product manager’s current problem is that a lot of the new customers that they are picking up are ones in which they decide to pay for their phones upfront or pay for them in installments instead of opting for the subsidized plans.. When they do this, they get lower monthly rates and faster access to future phone upgrades.

It turns out that this is a big deal. What it means for AT&T is that their future value for each of the new customers that they are picking up today is lower than what it used to be. The lifetime value of a customer goes down when they pick a non-subsidy plan. What the AT&T product managers need to do is to stop focusing on the number of new customers that they’ve been able to attract and start focusing on the type of new customers that they can acquire. More valuable customers are always better!

What All Of This Means For You

As product managers we are always looking for ways to measure how successful our product is. In the world of wireless service providers, the product manager job description for product managers tells them to measure their success by the number of new customers they have been able to steal away from the competition. However, perhaps this is the wrong measure to be using.

All wireless customers are not created the same. Some are more valuable than others. Post-paid customers who sign up for a subsidized plan have a greater lifetime value to AT&T than customers who purchase their phone and signup for a lower rate plan. The AT&T product managers need to find a way to get more of the high value customers to sign up.

The lifetime value of each of our customers is something that we need to take a careful look at. It may turn out that our efforts to get anyone and everyone to purchase our product is not the right thing for us to be doing. Instead, we should be focusing our efforts on attracting the right kind of customers. Take the time to know who you best customers are and you can make your product even more successful.

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that product managers should work to convert low value customers into high value customers?

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P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

I must confess that I’m not that much into women’s handbags; however, even I recognize what brands are the most desirable in this category. Prada has always been in the lead. What woman wouldn’t kill for this season’s Prada bag? This is just the way that it’s always been. However, lately even the Prada product managers have run into some problems. Can they recover from their stumble?

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What Does Your Product Smell Like?

by drjim on February 23, 2015

Do your customers like the way that your product smells?

Do your customers like the way that your product smells?
Image Credit: Angélica Portales

As product managers we are always thinking of ways to make our product more appealing to our customers. We all have long lists of features that we just know that once they are implemented; our product will become irresistible to our customers. However, there is a good chance that we may be overlooking something. Is it possible that how our product smells could play a big role in how willing our customers are to buy our product?

The Role That Scent Plays In Attracting Attention

As we all learned in school, humans have 6 different senses. Product managers spend a great deal of time trying to make their products appeal to the visual sense when we put together product brochures and ads. What we may have been overlooking is addingthe powerful appeal of the sense of smell to our product development definition.

This all comes down to what kind of product you are responsible for. However, I’m pretty sure that just about any product could benefit from being associated with a positive scent. The goal of creating a scent that customers would associated with your product would be to first draw them in to find out more about your product and then to cause them to either purchase it or perhaps purchase more of it. Get this right and you’ll have something else to add to your product manager resume.

As of right now there is no firm research that shows that having a scent associated with your product will drive more sales. However, marketing professionals are starting to get excited about the ideal of scent marketing. They view scent as being one more way to reach a customer along with more traditional marketing tools such as lighting and design.

The Challenges Of Managing Your Product’s Scent

If you decide that associating your product with a scent just might boost your sales, then there are a number of different things that you will need to become aware of. The first of these is that we all react differently to different scents. What this means for you is that what may smell sweet to one person may smell terrible to another person.

Another thing that you are going to have to be aware of is just how strong you allow your product’s scent to be. You are going to want to accomplish two tasks with your product’s scent. The first is that you are going to want it to be strong enough to be noticed by your customer – if they can’t smell it, then it won’t be doing you any good. Next, you need to realize that your product will be existing in an environment with other products. We can’t control where our scent goes and so we’re going to have to be extra careful to make sure that our scent does not offend or overpower other products or people.

The people who research scents tell us that the best scents are the ones that are subtle. The scents that potential customers find to be the most pleasing include sweet smells such as brown sugar and apple. Depending on exactly what your product is, you might also want to try tea-derived aromas or cinnamon scents.

What All Of This Means For You

Even to product managers, what makes a customer want to buy a product remains a bit of a mystery. For some products, what a customer smells when they are considering making a purchase may play a role. No, this is not yet a part of your product manager job description, but it just might soon be!

The challenge of creating just the right scent to associate with your product is that what smells good to one person, might be offensive to another. Additionally, if you decide to associate a sent with your product, then you are going to have to make sure that it’s strong enough to be noticed but not so strong that it repulses. You’ll have to be careful to manage your product’s scent. You don’t want it to conflict with other scents or to extend too far away and cause conflicts with other products.

Product managers are always looking for new ways to make our products be even more attractive to our potential customers. When we think about it, every one of our customers has a nose and associating a scent with our product can be a powerful way to remind our customers about our product and maybe even get them to decide to purchase it. Give the idea of creating a signature scent for your product a thought and let your nose lead you to a boost in sales!

- Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™

Question For You: Do you think that you should associate a food smell with your prouduct?

Click here to get automatic updates when
The Accidental Product Manager Blog is updated.

P.S.: Free subscriptions to The Accidental Product Manager Newsletter are now available. It’s your product – it’s your career. Subscribe now: Click Here!

What We’ll Be Talking About Next Time

How would you like to have the job of being a product manager at a wireless service provider? Admittedly, it would be an exciting job. Wireless services bring in a great deal of money so there would be no questions about your product being a success, the real question would be what could you do to your product development definition to make it more of a success? Over at AT&T wireless the product managers appear to be successful because they are adding more and more customers. However, are they really going about this in the right way?

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