Three key themes defining the Telecommunications, Media, and Technology (TMT) landscape in 2023 are Telco as a Service (TaaS), churn and loyalty, and marketplaces. As consumer preferences continue to shift with experience at the heart of winning hearts and wallets, businesses need to rethink their go-to-market in a way that leverages personalization and drives new service offerings.
TELCO AS A SERVICE
Telco as a Service (TaaS) is the strategy of embedding telecom services into other channels—just like we have embedded banking. It’s the notion that, since these systems already exist, there’s a use case for connectivity and offerings in these different places where customers and organizations are already operating.
Instead of a telco provider continually offering products on their website and doing the standard promotions to acquire more customers—what if the script was flipped? If instead, telcos looked at creating a customer experience that is low touch—like embedded services—the technology does the legwork instead of the ad dollars. The idea is to decentralize where phone plans live currently and create new options that meet customers where they’re already spending time and money.
An example of this might look like a telco company embedding phone plans within an existing corporate expense system. Employees link their credit cards to this same system to complete an expense report, and since they have a corporate phone plan, all of the info is already connected on one platform—instead of being managed across multiple channels.
The APIs enable a frictionless experience and a new way forward that removes outdated and slow ways of working. All brands are looking for different touchpoints with their customers—telecom companies can use this same integration framework to plug in across channels like businesses, retail, pharmacies and so on to create ease for the end user and a new revenue model for their bottom line.
CHURN & LOYALTY
The churn percentage for the big three—AT&T, Verizon, and T-Mobile U.S.—is around 0.8% to 1.4%. A one to two percent churn rate can result in a loss of millions of dollars in revenue. But the percentage is still a relatively low number. So why do telcos care about churn?
The cost of finding new customers is more cost intensive than keeping customers loyal. Hence retaining customers is key to profitability for major telcos. Organizations are considering what their point of differentiation is in the year ahead and, in 2023, it will be about the customer experience. Here are two ways telcos can shift ways of working with churn and loyalty in the year ahead.
1.Focus on Churn Rather than Adds
Today, most companies are focused on adds rather than churn. If telcos consider inverting this, they have the opportunity to drive loyalty. Telcos tend to focus on adds from net new product lines, rather than holding onto customers from leaving their platform through other means.
Overall, the ARPU (average revenue per user) will increase when telcos have better customer experiences. The fundamental premise for telcos looking for growth is to reduce churn as much as possible, unless adds can reset the value proposition to the customer. Telcos can consider hyper-focusing on the first 90 days of the customer experience, ensuring the customer has a positive experience, their problems are proactively addressed and they feel supported through their use of services.
2. Loyalty Cannot be Bought with Freebies
Freebies don’t drive loyalty. Instead, experience is what matters and whether a company can proactively solve a customer’s problems and concerns. The brand is the experience, and the experience is the brand. This is a huge gap that telco companies can consider addressing. From the customer’s perspective, telcos exist in the utility space – in this universe, every company is universally challenging to deal with, so customers are less inclined to switch providers out of convenience and lack of incentive. To become a loved company, telcos can consider offering better experiences that make them stand out in the competitor landscape.
The world of online commerce continues to change after several progressions in recent years. Now the next wave of ecommerce is emerging: marketplaces.
Traditionally, buyers that purchase products from the same manufacturer can ensure that the products they buy will work together. In a fragmented tech market, businesses and consumers often work with multiple suppliers and vendors to reach their goals and find the products they need.
Marketplaces allow buyers to cut through the clutter of choices and find verified products in one place that will work within their current ecosystems. While similar to the commodities market in the B2B space, marketplaces are more digital and attractive to players from a supply and demand perspective. They also provide product trust and safety. There are two emerging marketplace models:
A company can be on the consuming side of a marketplace where they work with other companies to provide solutions to customers.
A company can be on the manufacturing side where they have a marketplace for their suppliers or everyone in their industry to get what they need from upstream suppliers.
Suppliers within a marketplace should have control over buyer data, access to buyers outside of their original customer base, and an opportunity to build additional revenue streams. Companies have the ability to create a one-stop-shop for customers to buy interoperable products they need. Those that successfully implement a marketplace model will come out on top within the industry.