Transcript Customer-Centered VoIP Marketing

Customer-Centered VoIP Marketing
Internet Telephony Conference & Expo East 2007
Presented by Karen Strouse
Management Solutions
Fort Lauderdale, Florida, USA
January 23-26, 2007• Ft. Lauderdale, Florida
The Customer Defines the Business
Some of them are strikes,
and some of them are balls….
The
past
…and I call them as they are.
…and I call them as I see them.
The
present
…but they are nothing until I call them.
The
customer
January 23-26, 2007• Ft. Lauderdale, Florida
Bundle Mythology - Debunked
• Everyone wants bundles, • Few buy bundles.
but...
• The motivation for
• The purchase criterion is
bundles is one provider,
price. Customers are
one bill, but...
suspicious of too much
commitment.
• Customers can’t wait for • Most customers only
quadruple play, but...
bundle 2-3 services
• Fixed-access providers
• Many households don’t
are well-positioned for
bother with conventional
quadruple play, but...
wireline voice
January 23-26, 2007• Ft. Lauderdale, Florida
Bundling:
Pyramid Research Report
From “Transforming Triple Play” research report
• Metrics routinely used by cable companies
(measuring revenue-producing applications rather
than customers) provide the best management
information.
• Telcos routinely sell 1 to 1.5 services per customer;
cable companies 1.5 to 1.9.
• Bundles do not compensate for substandard
elements.
• Quadruple play availability provides portfolio flexibility.
Wireless and VoIP displace fixed-line component in
multiple play bundles.
• Discounts aren’t a proven catalyst for bundle sales.
January 23-26, 2007• Ft. Lauderdale, Florida
The Good News about Bundles
• Bundles currently aid retention
• Bundles could become more popular and
more sustainable when the value they offer is
more than the sum of the parts
• The customer’s preferred bundle provider is
the best at the service that matters most
January 23-26, 2007• Ft. Lauderdale, Florida
Marketing Strategies
•
•
•
•
•
Product development
Pricing
Branding
Segmentation
Database marketing, customer value and
retention
January 23-26, 2007• Ft. Lauderdale, Florida
Product Development:
Revisiting the Diffusion of Innovation Curve
After: Crossing the Chasm,
Geoffrey A. Moore
50
Early
Majority
45
40
35
30
Adoption Rate
25
(%)
20
15
Market 10
Strategie 5
s
0
Early Adopters
Minimal
Marketing
Focus
Niche
Marketing
(bowling alley)
Build
Market Share
(Tornado)
Late
Majority
Sell to
the end user
(Main Street)
Laggards
Innovators
Time
Value
Disciplines
Product
Leadership
Operational
Excellence
Customer
Intimacy
January 23-26, 2007• Ft. Lauderdale, Florida
Product Development:
In-Stat findings
Mobile email
Mobile text messaging
Downloading music
Using IM
Using VoIP
0
10
20
30
40
50
60
70
Percent of broadband households
January 23-26, 2007• Ft. Lauderdale, Florida
Product Development:
Fundamentals
• Customer service expectations
– Network reliability
– Customer care
– Technology innovation
• First-mover advantage is critical
• Some of the most successful launches have
been surprises
January 23-26, 2007• Ft. Lauderdale, Florida
Price:
Pricing Structure Shapes Market Development
•
•
•
•
•
Sprint introduction of per-minute pricing
AOL flat-rate monthly service
Internet service, Europe vs. US
Wireless penetration, Europe vs. US
Monthly flat rates or large buckets of minutes
for wireless and long-distance
January 23-26, 2007• Ft. Lauderdale, Florida
Price:
Telephia research findings
Price is the most important factor
for customers selecting a bundle
Internet, TV, phone, wireless
TV and phone
Internet and TV
Internet and phone
subscribers
0%
20%
40%
60%
January 23-26, 2007• Ft. Lauderdale, Florida
Price:
Aim for Sustainable Critical Mass
• Create a profitable commodity service in pricedriven segments
• Practice price discrimination
• Event-based pricing
• Exploit customer initiative
January 23-26, 2007• Ft. Lauderdale, Florida
Branding:
Demystifying Differentiation
• What it isn’t: 24/7 customer support, highquality service, and service bundles.
• What it is: Offering something that your
competitors don’t offer and probably can’t offer
later.
• Exclusive access to content or partners.
• Switching costs: the dual-edged sword.
January 23-26, 2007• Ft. Lauderdale, Florida
Branding:
Value Differentiates
Market
Leader
Preferred
Brand
Commodity
Service provider
commands price
premium
Bias towards a
particular service
provider
Service provider’s
reputation affects
purchase
Purchase decision
based on price
alone
January 23-26, 2007• Ft. Lauderdale, Florida
Branding:
Best Practices
•
•
•
•
Know the market segment buyer values
Build on strengths
Support brand identity with infrastructure
Be prepared to invest in branding for the longterm
• Recognize that brand extensions have risks
January 23-26, 2007• Ft. Lauderdale, Florida
Segmentation:
Price/Service
Wholesale
Systems
Integrator
Retail Turnkey
Services
Price-driven
segments
Resellers
Education,
local government,
not-for-profit
Consumers,
low-end
Service-driven
segments
Multinational,
Fortune 500,
technologydependent
vertical markets
Mid-sized and
vertical markets
where technology
isn’t the primary
mission-critical task
Small business,
SOHO market,
telecommuters
Opportunities
for
new entrants
Offer ancillary
services,
information services,
support
Target a vertical
or geographical
submarket
Target a
demographic
or geographical
sub-segment
After: Strouse, Karen, Marketing Telecommunications Services: New
Approaches for a Changing Environment, Artech House, 1999
January 23-26, 2007• Ft. Lauderdale, Florida
Segmentation:
Business/Consumer
• Select one segment or serve both through
yield management
• High and low volume segmentation
• Lessons from the airlines
– can practice price discrimination
– benefits all users
– benefits provider
• Vary all elements of the marketing mix
January 23-26, 2007• Ft. Lauderdale, Florida
Segmentation:
Value-Based
• Identify value of factors:
–
–
–
–
Acquisition costs
Total lifetime revenue
Cost of providing products and services
Length of customer relationship
• Compute net present value of customer
relationship
• Focus on high value segments
• Provide excellence in the customer’s view
January 23-26, 2007• Ft. Lauderdale, Florida
Value and Retention:
Anticipate and Meet Customer Needs
• Consult CRM applications to predict and
prevent churn proactively
• Analyze customer databases to develop
market segments based on buying patterns
• Decentralize authority to react to competitive
initiatives
• Detect service problems before customers
report them
January 23-26, 2007• Ft. Lauderdale, Florida
Value and Retention:
Churn
• Conventional wisdom: churn’s expense is the
high cost of customer acquisition
• Less evident: wireless customers most likely
to churn had higher average bills
• Customers will churn to service providers that
make it easy to churn again
• Bundling reduces churn
January 23-26, 2007• Ft. Lauderdale, Florida
Value and Retention:
Churning for Small Discounts
100%
75%
62%
69%
73%
48%
50%
27%
25%
0%
No
Discount
5%
10%
15%
20%
Source: TNS Telecoms
January 23-26, 2007• Ft. Lauderdale, Florida
Thank you!
Karen Strouse
www.karenstrouse.com
January 23-26, 2007• Ft. Lauderdale, Florida