Years ago, the telecom industry’s basic product was marketing packets of data from landlines that transmitted morse code and later voice communications. This evolved to fax, information, short message service (SMS), security, internet of things (IoT) and entertainment.
At its core, the industry is in the connections business. With deregulation and competition from cable providers and others, the telecom monopolies had to transition from order taking to sales and marketing. In other words, they need to anticipate the needs and wants of customers in advance of the competition.
Given that their basic service is moving various forms of data across networks, it’s essential that the telecommunications industry innovate and focus on differentiation. Pricing models are largely based on volume tied to transaction velocity. They need to take a page out of industries to better monetize their services within parameters permitted by regulation. As an example, payment networks price on the value of the data passing through their networks—not the volume. Visa, MasterCard, American Express, PayPal and the Apple Store price access to their rails anywhere from 1.7% to 30% depending on the type of enterprise and country. They differentiate an otherwise commodity category through acceptance, convenience, increased purchasing power and positioning supported by aggressive advertising.
The primary objective in the age of cord cutting should be to retain existing customers and recruit new ones. The telecom industry is capital intensive and has a substantial legacy platform. Creating feature-rich strategies to resell the same network to existing customers—let alone new customers—is the holy grail. Maximizing marginal utility or the satisfaction customers receive from having multiple services drives higher lift in incremental profit.
Offering a different ring cadence on a home landline for different members of the family and charging for it is akin to purchasing custom ringtones on a mobile phone. Both offer a point of differentiation that customers will pay for. Comcast providing voice-directed remote controls is a good example of differentiating on convenience and raising the exit costs. If you switch to another provider, people lose the convenience associated with the custom remote.
Underlying telecom marketing is the need to decommoditize their offerings through better service, features, product positioning, customer journey management and awareness supported by identifying and communicating in channels of preference. Creative Solutions has working expertise in the telecommunications category. We have developed and messaged ICE (information, communications and entertainment) strategies as clients and for clients. A few of us came out of the industry and have served or advised clients in the U.S., Canada, and the UK.
To find out how Creative Solutions can provide information and insights that will help your business, contact firstname.lastname@example.org or 302-543-8533 for a no-obligation consultation.