RCS Marks New Age of Customer Engagement for Operators

This article was originally published in Telecoms.com and is republished here with permission.

It’s been a developing technology for more than a few years now, but Rich Communication Services (RCS) is finally coming to fruition and ready to make the impact that mobile operators and brands alike have been waiting for. There’s been no shortage of hype around this technology – and with good reason – but the tipping point is at last approaching when traditional text messaging is expected to have to make room for the functionality that RCS promises to bring.

Once past this point, operators will be handed new keys to the kingdom to be able to work more closely with brands of all sizes and industries. What’s more, operators will be positioned to become a more fundamental, revenue-generating partner at the centre of audience, employee and customer engagement.

So why are brands getting excited?
Put simply, RCS brings intuitive, engaging, and sticky brand experiences for driving long-term loyalty and becoming a central point of contact in a consumer’s life. This technology will transform messaging by taking its best functionality and giving it a 21st century upgrade, with features like high-resolution imagery, advanced video and audio capabilities, location information, and analytic feedback, just to name a few.

Let’s take a closer look at what opportunity this will mean for operators.

Brand and operator synergy
The industries set to benefit by RCS are wide-ranging. However, to begin to put this potential in perspective, let’s look at the hospitality sector. Imagine you’ve booked a hotel room after searching online, received a text message from the hotel thanking you, and then received your reservation details. This itself isn’t revolutionary – it’s standard, one-way interaction.

The opportunity with RCS, however, brings this interaction to another level. RCS-based conversational messaging will allow your hotel to suggest on-site amenities, such as dining options; or to book you a table by simply clicking a button; or to offer you a 10% discount off your bill. This can all be delivered within an RCS message, with no need for you to jump to another platform, such as the hotel’s app or website, and thereby enable one integrated, uninterrupted user experience.

Build a partner framework into this, and you’re able to suggest local attractions, discounted events, and local special retail offers, just to name a few things.

Moreover, this opens a whole ecosystem through which both the brand and the operator can drive revenue. From a customer perspective, it makes the booking richer, more valuable and more integrated with the stay. It’s more than just a text telling you your room number.

Additionally, from a functionality perspective, an interaction can be handled through a chatbot within a single messaging stream. There’s no departure from the network. This conversationally driven, multi-message model, however, does require a new monetisation approach, which we’ll get to shortly.

Making RCS a reality
It’s clear that the opportunity, driven by the revolution in functionality will be a game-changer. But how will this become a reality?

The adoption of RCS will depend heavily on several factors that relate to robust interoperability: reach, coverage, security and pricing. Standardisation across the telecoms industry, in fact, will establish a foundation on which RCS can flourish, with interoperability being key to ensuring that access is not limited by network coverage. Networks will also need to work within a centralised model to avoid any drop in access or connectivity for users.

What’s more, quality of service will also be important. Customers will need to love it from day one and see the potential in order to accept this as a channel for the long term.

Interoperability crucial to monetisation
Finally, the billing aspect within the interoperability necessity will play a fundamental role in the monetisation of RCS. This aspect of the RCS opportunity is one which perhaps brings a fresh revenue model for operators, as well as a chance to tie them significantly closer to brands.

Operators can benefit from brands’ successes by creating a framework of partnership revenue sharing from those using RCS. This would essentially be a pay-per-click system, except for bookings, purchases, and uptake that brands have secured through using the operator platform. Mutual success would encourage development and two-way support.

Pricing models
Payment brings us back to the pricing model that will need to be established to handle the traffic without relying on legacy models for the consumer. Text messaging has become a product that most consumers think of as ‘free’. However, RCS will deliver a far more conversation-based approach to messaging, with the potential for numerous messages throughout a thread. Therefore, rather than pricing by message, the results of these conversations could be potentially priced on a sliding scale via metrics such as click-through rates, conversion rates, or peak times (times at which messages would most likely be opened) for sending messages.

On this front, operators can continue to become central to brands’ success. Simplified pricing models, can make it easier for brands to see good margins returned on their investment and measure success. Further, transparent models, such as billing by time, not per message, could fuel conversation and encourage discussion with those behind the brand (and its partners). The operator can give the brand the support and orientation expertise that its in-house team requires, and the models, functions, and brand services can follow.

Looking Ahead
RCS will soon unleash a dynamic phase of engagement between operators, brands and consumers through a text messaging channel with a 21st century makeover. However, there is still work to do to develop the technology foundation and partnership ecosystem for enabling this. It’s up to operators to demonstrate the potential, lead the creation of the technology, and bring innovators on board accordingly. Once this is in motion, we can expect to see a new wave of brands jumping in with RCS. And with a solid revenue-sharing model in place, there will be mutual interest and powerful revenue incentive in making the most of this technology.