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Lead generation to offer management to provisioning

MM: If I understand you right so far, Ed, the first one was customer acquisition—with an emphasis on closing the feedback loop in terms of lead generation.

ES: Yes.

MM: The second one was really a dynamic processing or offer management. There you have the ability to offer digital services or capabilities in a lot of different configurations. Probably driven by some set of policies and rules, but ultimately for maximizing the profitability of any one transaction—given the nature of the buyer.

ES: That’s right. We kind of call that our “activation engine.” The first one is acquisitions. The next one is activation. So turning on plans and services, based on that business logic.

MM: Right. The third dimension that you’ve mentioned here—the customer lifecycle—is use-tracking. Use in terms of being able to keep track of what they’re consuming. That will correspond to some sort of micro payment capability.

Then the fourth, you’d indicated—I would characterize it as “provisioning.” That starts with authentication and then entitlement. Then a mash-up or a provisioning of whatever it is that they’re authorized to consume.

ES: Yes. The way I’d characterize is, I’d have that in the second bucket. Basically, there’s an acquisition activation that includes the provisioning and the plan creation. Then the third is the usage tracking and rating.

The fourth one would be the actual billing. As you can see, we call ourselves billing and customer management. But the billing’s only one real piece of what we do. We actually divide billing into several segments. As you can tell, I’m an engineer by training. I guess the way of thinking about things is, I break them down into smaller problems. That’s, in fact, how we build our software.

We divide billing into a couple of things. Billing, we define as calculation, presentment, collections, remittances and reconciliation. In order to have what I call a high-function billing system, you need to be able to do all of those things in an automated fashion, so that your clients can scale their businesses.

A lot of our competitors—and I gave a range of different competitors—may only do one of those things well. Even if they do it, they don’t automate it.

For instance, there are software companies and web-based companies out there that are invoicing companies. You calculate your invoice, you enter the amount into their web service and they will deliver that electronically to your customer. They do the presenting piece.

We think that in order to really scale businesses and totally automate, you need to do all of those things. Calculation, presentation, collections, remittance and reconciliation. And you need to do them well.

That’s Stage 4. Stage 5 is what we call “customer management,” or “customer control.” There are 3 layers to that. Layer Number 1 is communication.

Again, this is my experience as an operator coming out. If you think about my operator experience, I had 70 brands and 2.5 million subscribers. I saw the best way to minimize those costs of customers—of owning the customers—is by doing proactive outbound communication throughout the customer lifecycle. But making sure that you understood the good use cases and the not so good use cases.

An example of a good use case is, a customer comes in and I take their credit card and turn the service on and they never talk to me again.

An example of a less-good use case—but I guess there’s a silver lining… A customer comes in and they light the service. Midway in the cycle, they want to upgrade or buy more. How do you handle that?

It’s a good problem in that they want to give you more revenue. But the bad problem is that, depending on how it’s handled; it can be a very costly interaction.

Then the third set of use cases is when people have disputes. A lot of my competitors talk about how they can do micro transactions. Yes. We can do the micro payments. The problem is closing the loop on the backside.

It’s one thing to be able to do them. It’s another thing to be able to handle the disputes around micro transactions.

If somebody gets through and talks to you for 30 seconds on a dispute on a line item on an invoice, you basically lose any margin you had on that micro transaction.

Proactive outbound communication is the first layer. Making sure that your system can automate those communication events throughout that customer’s lifecycle. Understanding all of the positive use cases, but also understanding all of the not so positive use cases, as well.

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