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During an interview today I was reminded of an asset I have on my hard disk. In another modest move to add value to our beloved wireless industry mobiliser decided to share this file without delay to continue our series of opensource management consulting to the players of the mobile economy. This asset is a proposal for a mobile test market we presented at a competition called MobilMedia organised and sponsored by the German Ministry of Economy and Technology in January 2002. Unfortunately, the judges didn't let us win back then but the idea is valuable anyway. You may judge for yourself.

A mobile service is successful if it makes money. The same is true for devices or wireless networks. Yet, it is very difficult to find out which enabling technologies and services drive ARPU more than they cost to develop, operate and market. How do you quickly and cost-efficiently find out if a mobile application will make money? Well, launch it in a test market under real life conditions and check whether normal users are willing to pay a premium or digest the advertising messages served with it.

Test markets are used in any industry except for the mobile economy

Every marketer of consumer products can tell you a long story on the benefits of test markets and how much money you can save when listening to your target group and watching their buying behaviour. The marketer's favourite pastime is to change the parameters of the marketing mix including product, price, place and promotion. On the way, they collect a lot of statistics and experience data on how to optimise the marketing mix. In the wireless space, however, I have not come across a test market so far which is why I want to promote this idea just a little bit more.

Most of the application and content providers I have spoken with struggle with making their first deal. Many times the reason for failure is the lack of a track record proving that this particular mobile service is able to make money. Unwillling to take the risk themselves operators send you home to code again or park you in a never ending sales pipeline. Thus, many good ideas never reach the market as the companies behind them dry up during the period of service development and fruitless sales efforts.

Young companies with great technology and little experience with selling to mobile network operators need hard facts to convince the buyer. A test market can deliver them. Such a test market has a couple of success factors, too, which are discussed in the following paragraphs.

5 success factors for building an open cross-operator test market

First, a successful mobile test market is open and cross-operator. Small or big companies should be equally invited to integrate and publish their applications and content to test market users. To limit the influence on consumers in the first place, the test market should be accessible from any operator. While I don't believe in exclusive deals as the best means of competitive differentiation, most service providers define their target group on demographic or lifestyle parameters and not based on the cellco they subscribe to. This holds true especially for person-to-person community services.

Second, publishing your application and content to the test market should be easy, fast and cheap. This includes connecting the service to the billing system or the advertising server, depending on the business model and revenue source you choose, i.e. user vs. advertising industry. It also means offering connectivity to the location servers of the operators. Most importantly, hooking up to the test market should be well supported by operator- and handset-specific developer programmes with lots of technical documentation, developer manuals, usability guidelines and human support.

Third, joint marketing programmes for all applications and content offerings featured on the test market portal can save a lot of money, too. A good idea is to run a newsletter announcing the benefits of new services recently added to the test market. Many software companies do I know that spent a lot of cash to acquire a representative number of early adopters to their company-specific test site. The marketing instruments should also include viral marketing schemes and loyalty programmes.

Forth, the test market should provide a rich family of market research tools ranging from PC-based and mobile surveys, to focus groups and a usability lab. Of course, the logfile of the application server should be studied to analyse the service usage, too. Frequently recurring usability tests with small groups of users - user co-development - are a very affordable way to increase the acceptance of your product.

Fifth, the test market should be run by an independent company with a love for helping new market entrants sell to and partner with the big guys. It is possible that the test market can be run as a profitable company. On the one hand, you just need some initial financial support from a remorseful government that wants to pay back to the mobile community some share of the insane 3G license fees they collected in the heydays. On the other hand, the mobile network operators should be interested in a constant stream of proven applications and contents, at least they tell you so all the time. On top of it, they will save a lot of many from shortening product evaluation or avoiding suboptimal marketing activities. Just remember Quam's famous attempt to enter the German market as a greenfield operator with zero USP (Unique Selling Proposition), i.e. no recognizable innovative means of differentiation at all.

To sum up, I believe that every country should at least have one open, cross-operator test market. Our original idea was to focus the test market on one city only, in this case "Berlinmobil". Such a test market contributes a lot to identify and market the networks, devices and services mobile users really need, want and are willing to pay for.