IoT Carrier Contract Development - The balancing act of Enticement vs Revenue Risk Mitigation

As the great Australian band, the diVinyls sing; “It’s a fine line between pleasure and pain”.
Similarly (or if you really look into the lyrics, not all that similarly) in Carrier IoT sales this statement holds true.  A balancing act must be achieved by the Sales and Pricing teams to attract customers with compelling and tailored offers (Pleasure), whilst ensuring downside and risk (Pain) is mitigated. So how is this done?

Whilst increasing numbers of IoT customers are entering the market, there is still great competition between carriers to attract and sign these customers, and so the limits of contract innovation are being pushed by all areas of Carriers organisation to win the large deals.

What contract techniques are your Sales and Pricing teams using to woo the IoT customer?

Are they working or are you losing out to competitors? And are these techniques proving to be a headache financially or operationally later on?

In my experience, it is often not a lack of innovation or imagination in the Pricing or Sales teams that lose the deal, but the inability to implement this innovation into the contracts because the business support systems and processes cannot support it.

Billing capability is a major, if not the main culprit here… Too often I have heard that Pricing teams have come up with a compelling and likely deal winning contract only to be chastened by their billing vendor and system.

Here are a few automated and successful pricing ideas for different customer types:

Global Customers – Global Sim highly competitive process
Enticement: Activation volume based tiered charging, Activation hardware charges rebates, , Expensive network roaming discounts, Tiered charging by location, Allow for flexible allowance sizes based on monthly usage ups and downs, Auto-purchase more single month allowance if required

Mitigation: Activation number commitments, Minimum Spend, Location based access fees calculated monthly, Catch all tariff table for uncontracted roaming
 
Companies new to IoT (Med – High Risk, Startups) - Customer requires low entrance costs and a competitive bid
Enticement: Reduce SIMs and hardware costs upfront, incentivise activation through activation SIM rebates, Volume based plan structures

Mitigation: Sim Suspension rules, SIM non-tolling thresholds, SIM lifecycle charges, Enforce Activation Commitments, Self Service - reduce cost to serve, reporting notifications to Carrier staff for enforcement
 
Can your billing system do all of the above automatically now?
If not it’s time to have a look around because your competitors can and they are winning deals!

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