European Wireless Rights and Wrongs

All European telcos can learn valuable lessons from i-mode and Vodafone live!, according to a new brief by Forrester Research. Europe's i-mode gets the services right and the marketing wrong, while Vodafone live! does the opposite. Forrester asserts that only conversational content services -- those that blend communication, which consumers are willing to pay for, with content that they expect to be cheap or free -- can deliver. To be effective, conversational content must show up in both service design and service marketing.

Since its launch last spring in Germany and the Netherlands and in France and Belgium six months later, i-mode's base grew to 336,000 users at the close of 2002. After launching in eight countries -- the UK, Germany, Italy, Spain, the Netherlands, Sweden, Ireland, and Portugal -- last October, Vodafone live! has just hit its 1-million-subscriber goal with the UK, Germany, and Italy responsible for the lion’s share.

"At present, i-mode gets the services right and the marketing wrong and is struggling to sign up new customers. However, the customers that do sign up rave about the service and translate their enthusiasm into revenues: 83 percent of existing customers are satisfied with the service, and i-mode users spend on average 7 euros more than other users," said Forrester Senior Analyst Michelle de Lussanet. "By contrast, Vodafone live! puts a great message on top of weak services. While Vodafone live! outsold i-mode five to one during the Christmas season in countries where the two compete, unsatisfied users of pure content services will abandon them when free trial periods run out."

Forrester advises i-mode providers and Vodafone to plug the gaps by weaving conversational content through both service design and marketing -- a task that demands shared objectives and training for product development teams that typically take their marching orders from marketing departments but rarely interact with them after design requirements are set.

"Providers must enhance existing content to make it conversational. For instance, they could enrich weather services with the capability to distribute weather maps to friends, with an invitation to a picnic or a warning to drive safely in the fog attached," de Lussanet added. "Marketing campaigns for conversational content services should promote desired states of mind, not specific technologies or services. Just as Disney successfully markets magic instead of theme parks and the Body Shop scores with marketing nature conservation, operators must focus on the essential value they're selling to consumers: contact, personal relationships, and shared experiences."

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