Communications service providers (CSPs) are having to radically re-evaluate the way they do business, not only because of the pressure on traditional revenue sources but also from OTT competitive forces.
The path to the retail customer’s door is getting a little worn these days and the high cost of acquisition is not always rewarded by long-term revenue - let alone profitability, even if they are tied to contracts. Customer loyalty is no longer a given, so why the continuing obsession with the retail sector?
There are the obvious cash flow issues of ignoring those retail customers, plus the benefits of holding those pre-paid account balances and the competitive value of saying you have millions of customers.
Research shows that handset subsidies tied to long-term contracts are starting to lose favor with ‘experienced’ customers in saturated markets. They are opting to purchase their own smartphones and move to whoever offers the best airtime and data packages at the time.
Retail telecom hardly reached ‘dumb pipe’ model that operators have been trying so hard to avoid and there is a potentially lucrative alternative open to them, and one the smarter players are addressing successfully – the small to medium enterprise (SME) market.
I know you have heard this all before but the days of offering simple PABX and Centrex services are past us. Today’s SME is looking for much more than voice and connectivity but does not always have the luxury of a dedicated IT department or in-house comms experts to advise them. So whom do they turn to?
Google Search, publications and personal recommendations are popular, and almost anywhere but to the network operator that you would think would be best placed to help out. With the continuing emphasis on addressing the retail sector and shooting for the big corporate accounts, the SME market is often left behind by them, and it is easy to see why.
Retail can be addressed by mass-marketing; big enterprises by dedicated sales account teams – but SMEs need special care and attention, take time to nurture and often demand a higher level of post-sales care. But they are generally more willing to listen to guidance on anything that can reduce or contain their head-count and take away their pain points – ICT being one of them.
So how can this potentially enormous market be best addressed and what types of services are they looking for? Voice and messaging, of course, are still critical elements but with the advent of BYOD and the plethora of ‘free’ OTT voice services like Skype, Viber, Whatsapp, Messenger, etc. it can be fruitless sector.
Apart from the obvious need to be connected to the internet the SME will want access to specialist cloud services that help them run their business more effectively. The whole concept of virtualising their operations and putting their destiny in the hands of a third party is still of concern to many SMEs but the cost and service level benefits of doing so are making the move imperative and inevitable.
They will still want control but not necessarily the management hassles, so smart CSPs are setting up SME ‘SWAT’ teams, packaging up the most popular PaaS and SaaS and bundling them specific for the needs of each business.
This requires the cooperation and assistance of partners that can provide the services the CSP does not have itself, but this type of ecosystem led by a CSP should give the SME the level of security and convenience it is looking for instead of trying to create something itself.
The final piece to the SME framework is pricing and CSP sales staff need to be able to create customised cloud packages and service bundles on the fly, even online, that will need to be accurate, attractive and profitable.
In my next blog, I will outline how all this can be achieved and how it is proving to be an effective means of attracting and keeping this lucrative market sector.