Hitting the target

Executive summary

The telecom sector has reached saturation point in many emerging markets, with market penetration sometimes higher than 100 percent of the population. Mobile operators are finding it increasingly challenging to compete and grow in such markets by employing a traditional go-to-market strategy. This well-worn blueprint has rested on their understanding of aggregate demand, and has been based on the underlying assumption that there are still new users to acquire and that these acquisitions would compensate for price reductions. Telecom operators must now rethink their entire approach to marketing, fundamentally reorganizing themselves to allow more effective growth campaigns.

Telecom companies need to embrace a new level of targeting and reject the outdated view of customers as large, indistinct, and coherent segments. To tailor offerings to specific customer needs, companies should employ analytical marketing, mining the Big Data already at their disposal to respond continually to the behavior of individuals and market microsegments. Investment can therefore be channeled productively, rather than wasted through overly simplistic assumptions about the general market.

For this transition to take effect, telecom operators must build five key capabilities within the marketing function: data management, microsegmentation, commercialization, product design, and adaptive learning. Deploying these capabilities will ensure that customers’ needs are more accurately identified and serviced. Customers will be more likely to respond positively to marketing approaches, with growth resulting from the combined profitability of each micro-segment.

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Conclusion

The deluge of customer information is just beginning. Every digital packet transmitted through the operators’ network is a potential source of information. When this is combined with customer information from external sources (such as from social networks, or from online shopping and behavior), companies will attain a more holistic view of customers’ lifestyle and preferences.

Telecom companies will have a natural advantage in the new era of Big Data, as they possess more customer knowledge than their counterparts in a range of other industries. As a result, they have a growing number of monetization opportunities.¹ However, many operators still have a great deal of catching up to do. The race is on.

¹ For an example of such opportunities, see Telefónica’s latest Telefónica Dynamic Insights venture, which proposes to sell anonymized subscriber insights to third-party entities (http://tinyurl.com/c2mufby).