Thursday, August 17, 2006

Is A Locked-In Feature Better Than No Feature?

Orange now have a centralized SyncML repository for customers to back up their data - accessible to any SyncML phone, but only over GPRS/3G. They also have a PC connector so you can sync Outlook into the repository, so that you can then pull the details onto your phone. But they won't let you just sync the phone through a cradle / cable directly to their repository.

The reasons are clear - lock customers in and increase data traffic.

However, cost-concious users or customers who are roaming for an extended period (at £8/Mb) will probably be sufficiently turned off by all this unneccessary additional hassle that they won't use it at all. Without this lock-in they might have enjoyed the convenience of GPRS syncing whilst on the move, for example when they pick up an important new contact or schedule a big meeting, whilst doing more regular syncing at home to avoid the tariffs.

Am I wrong in thinking that this sort of strategy is self defeating for the operators? If the service were truly open, some customers would certainly use the service exclusively through a PC and thus be an unprofitable resource drain for Orange, but many more would surely be tempted to start using the service in a cheap way (possibly via a PC), then as they started to perceive the value they would become more regular and profitable customers?

To my mind if an operator wanted to truly drive data usage they should offer this kind of service unrestricted for free, permanently in such a way that a user will latch onto anything they find useful, naturally increasing their usage as they become comfortable, and driving increased data revenue alongside sales potential for service upgrades. Accept that there will be freeloaders, and realise real growth with the majority of users who don't mind a small cost here and there when they can feel the value, but would never have signed up for a premium service on day 1.

100% of very little is less than 10% of a lot.