Three UK hopes to lure younger subscribers with Smarties

Three has seemingly set its sights on cash-conscious consumers with the introduction of a new mobile service, Smarty.

The website has appeared though the fanfare has not kicked off yet. There is nothing untoward regarding this secrecy, it’s just early days. It’s a beta website, the tiered data plans have not been nailed down yet and neither has the pricing. The service will be launched in the near future, though there is no definite date. It’s all a bit up in the air, but in fairness, it’s still early days.

We spoke to Three after discovering the website (kudos to the FT) and Smarty will be a sub-brand of Three, with a completely separate marketing strategy and brand ethos, targeting a different demographic. Similar to brands like Giffgaff, Smarty will chase down the lower end of the market, looking for customers who do not want to commit to long-term contracts. It might not be the holy grail that many MNOs are chasing, but you can certainly make money.

But it is important to remember that this will be a completely separate brand. The Three business is built on data-centricity, it wants to target the data-heavy users, and generally this is a perception which resonates with the consumers. Three is generally known as the MNO for unlimited data, why would it want to spoil this reputation with confusing messages about prepaid contracts and cheap deals.

his is essentially what Smarty is. A prepaid, monthly SIM-only contract which will allow customers to dip in and dip out as necessary. But, there is a clever little twist which we have to give some credit to the Three team.

Value for money and fairness are two ideas which are hitting a lot of the marketing campaigns which we’re seeing at the moment. Rollover data plans or data bundles which don’t expire are two such ideas, but Three has come up with a different idea; a refund on the data you don’t use.

Users pay up-front for a data bundle, which also includes free calls and texts, depending on their data usage. The bundles are currently 500 MB, 2 GB, 6 GB or 14 MB, though these might change prior to the launch. Three will then calculate a refund depending on the data leftover at the end of the month. This refund is realized by the customer the next time they pay for a month’s usage.

Ultimately, the customer only realizes the benefit when he or she pays Three more money. It’s a little idea to improve the stickiness of customers, tackling churn rates in the notoriously fluid prepaid market.

And while Three will continue to chase down the data-centric users of the connected economy, it would appear this more cash-conscious consumer is becoming a much stronger target as well. During the earnings call,  a slight decrease in ARPU and AMPU was noticed, and while these numbers were not earth shattering, it did represent the broader demographics. Essentially, Three has been hoovering up lower-end customers which are churning from the other brands.

With the Smarty brand, Three can chase two very different demographics without confusing the customer with contradictory advertising campaigns. It isn’t uncommon for such a strategy, and Three might be onto a winner as other brands turn their noses up at the less lucrative prepaid customers.