According To Dan Hesse, The Mobile Internet Changes Everything


Robert Reiss, Contributor

July 15, 2015

The ubiquitous, mobile internet is changing business models, business risks, and the nature of the company-customer relationship.  I explore these subjects with Dan Hesse, an in-demand speaker on subjects such as the mobile internet’s transformation of society, cyber security, and customer service excellence.  When Laptop magazine selected the “Most Influential People in Mobile Technology,” Dan Hesse was ranked first, and Steve Jobs second.  He’s been credited with the saying that “great customer service costs less!” During his almost seven years as Sprint CEO, Sprint went from last to first place in industry customer satisfaction and was recognized twenty times by JD Power and Associates for customer experience excellence.

1. How important is understanding the evolving internet to CEO’s and their boards?

Mobile communications is arguably the most important technological development in the history of the planet.  Cell phone users grew from zero to six billion in 25 years, the most rapidly-adopted technology ever.  But the emerging “internet of things,” where wireless chips will be put into almost every object produced — vehicles, home appliances, clothing, health monitors, wearables, and even into the human body, may be even more transformative.  Cisco estimates 50 billion such connected devices in use by 2020.

The ubiquitous internet (sometimes referred to as the wireless or the mobile internet) changes everything!  This mobile, always-on internet is transforming economies, education, language, health care, music, safety, privacy, and the quality of life for the elderly and those with disabilities.  CEO’s and boards should understand these implications on the marketplace in which their companies operate.  Imagine a world where a company, its products, and its customers are connected 24×7.  The customer relationship, the value proposition, and the business model of every company and industry will likely be transformed.  The winners and losers will likely be determined by who innovates most effectively to address this always-connected world.

2. What are the implications for customer service?

There are unprecedented possibilities for product utility, customer “intimacy,” and customer service cost savings, but also unprecedented opportunity for complexity and resulting customer dissatisfaction.  Customers crave simplicity.  If these new connected products are simple to set up and use (“plug and play”), customers will likely self-serve (vs. calling the company for assistance), greatly reducing customer service costs.

I’ve found that providing great customer service costs less!  In 2008, Sprint began simplifying its offers, reducing the number of rate plan combinations by 85%, and made device usage and self-service simpler.  This helped drive an over 50% reduction in care expenses, saving over $2 billion per year, as eliminating the need for customers to call allowed the company to close 42 call centers.

To some, the connected home of the future, with smart appliances, interoperable entertainment systems throughout the house and to their connected vehicles, advanced energy conservation systems, remotely activated and monitored security systems, all connected to your mobile device, sounds like Nirvana.  To those who remember VCR’s blinking “12:00” or have three or more remote controls in their living rooms, this sounds more like a bad dream.  The difference between providing a great vs a nightmarish customer experience will never be more apparent.  Adoption of the new utility of these products will depend upon simplicity.  Ground-breaking innovations, like TiVo’s DVR, AT&T’s Digital One Rate, Apple’s iPod MP3 player, or Amazon’s One-Click are examples.  Simple, easily connected products will drive loyalty and stickiness, and low customer care costs.

3. How do companies deal with the increasing cybersecurity threat all of these connected devices generate?

Along with a plan to harness the power of the ubiquitous internet, ensuring the company has a comprehensive cybersecurity plan is perhaps the most important role a board of directors can play today.  The most damaging attacks on companies have internal complicity, either by a mole or through an unwitting, untrained employee.  Many companies don’t invest enough in training their rank-and-file employees in how to prevent attacks.  Well trained employees don’t plug in USB drives they don’t know the origin of, don’t click on links they’re not sure about, don’t connect to free Wi-Fi networks they aren’t familiar with, password protect all devices, recognize when social engineering or “phishing” attempts are being made, and don’t put company logos on themselves or their devices when traveling.

4. You mentioned industry business models are being transformed.  What is happening in music, for example?

Digital technology transformed the medium from the analog vinyl LP to the digital plastic CD.  The internet then drove “dematerialization” to virtual products (like cloud computing and storage), so physical CD’s began to be replaced by digital “downloads”, with distribution dominated by Apple’s iTunes store.  Today, iTunes is being threatened by streaming services like Spotify and Pandora (witness Apple’s purchase of Beats), as the business model is changing again, this time away from ownership to rental of non-physical assets.

ITunes made it possible for consumers to buy singles vs CD “albums”, which ushered in a decline in royalties for artists and songwriters, and the streaming services, especially the ad-supported “free” versions made the economic models for musicians even more challenging.  On the other hand, the ubiquitous internet makes it easier to discover new music based on one’s music tastes and preferences, helps new artists find an audience without a record label, and helps consumers consume more music from more places (how often do you see a Millennial without their mobile device and headphones)?

And, after years of mobile phones contributing to the degradation of audio quality (slow wireless networks and small processors on the devices necessitated highly-compressed music for downloads and streaming), the 2014 launch of the HTC One M8 Harman/Kardon edition (earning a “Recommended Product” designation by audiophile magazine The Absolute Sound) proved that mobility no longer requires sound quality compromises.  Many Android smartphones have followed suit, with better audio components and the ability to play high resolution (24 bit) audio files.  The analogy of moving from standard definition to high definition television is a good one.  Whether better-sounding digital content will be as successful as high definition TV, and whether it can yet again change the business model, has yet to be seen.

5. Do you have any career advice for these always-connected Millennials?

Try to find a line of work you love and that you’re truly passionate about.  I’ve listened to successful people in many fields — the arts, business, sports – and when they’re asked, “what made you successful”, each invariably mentions “hard work” as the number one reason.  To become great at your occupation, you’ll have to work hard at it for many years.  If it’s not enjoyable, that’s an unhappy life.  And if you’re happy, you’ll be more effective with those around you.  Happiness and success create a virtuous cycle, and it’s debatable which comes first.  Albert Schweitzer perhaps had it right, “Success in not the key to happiness.  Happiness is the key to success.”

This article was written by Robert Reiss from Forbes and was legally licensed through the NewsCred publisher network.

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