Got your number: why it’s adapt or die for the Telco industry
By Peter Veash, CEO at The BIO Agency
It reads like a bad romance: the spark has gone – was it ever even there? – you know you could probably do better and you occasionally daydream about leaving your partner, but you just… don’t.
You justify the relationship to yourself: It’s too complicated to break up, it’s not really THAT bad when you think about it, and frankly you can’t be bothered with the hassle (plus these long winter nights get lonely, and who would you watch Netflix with otherwise?).
So you stay together. Forever. The end.
It’s hardly Romeo & Juliet.
But unfortunately for the Telco sector, this is the reality when it comes to consumer perceptions, according to our recent study. We surveyed over 1,000 UK consumers and found that far from being deeply enthusiastic and loyal to their telco providers, the majority of people simply don’t care enough to bother leaving.
While at first glance it’s pretty positive that 77% of people would stick with their current telco providers, this is in fact borne out of a deep sense of apathy rather than advocacy – only 27% would be willing to recommend their current provider, and 37% say their interactions with their Telco providers are ‘neither good nor bad’. A staggering 90% of people view their Telco provider as a ‘utility’.
It appears that Telco brands have become complacent – never a positive in any relationship. The sector is now notorious for its inability to branch off into providing services that add value and pleasure to the lives of its customer base, and in a landscape increasingly dictated by excellent tech solutions and even better customer service, we are rapidly falling out of love with our long-term providers.
Digitisation is knocking most other traditional industries off their high horses, and although our research showed that 73% of people wouldn’t be interested in switching to a Telco service provided by a Tech company such as Google or Apple (meaning that until now the sector has remained relatively unscathed by the creep of the tech giants), this won’t last forever.
Telco brands are not immune to digital disruption – we only need to glance at the next wave of developments on the horizon, like the imminent introduction of 5G as well as our vastly changed smartphone habits meaning we are carrying around computers rather than phones. These factors make Telco fertile ground for having its lunch stolen by the tech giants; it’s not out of the question that a Google or Apple might decide to undercut Telcos on the price of handsets and establish a different relationship with the consumer based more on data rather than calls and texts.
Thankfully for Telcos, the solution is simple – not easy, but simple.
Telcos need to transform to survive, even if this means moving away from traditional business models. The key differentiator is customer experience. As Tiffany Bova, VP at Garner said, “Customer experience is the last source of sustainable differentiation and the new competitive battleground”.
Those telcos who build new services around the customer, unlocking data to provide seamless, personalised experiences, will find themselves best positioned for success. And to maintain that success, they will need to embrace constant change – and keep a look out for the next wave of disruption, which has historically been a real sticking point for the sector.
Let’s look to Nike for a perfect example of how employing a staunchly customer-led approach can inspire fierce loyalty and advocacy: from relatively humble beginnings as a brand that started out selling sportswear, Nike branched out into offering its customer base a full range of exciting products and services including creating a tight-knit, digitally-connected community of sports enthusiasts and allowing them to compete against one another.
If that sounds like an easier sell than making Telco loveable, how about insurance company Lemonade’s disruptive decision to ‘make insurance useful again’; it offered lightning-fast processes such as getting set up in 90 seconds, and taking just 3 minutes to file a claim. It also eradicated paperwork and allowed its users to get everything sorted using just the app, and as a final sweetener all unclaimed money was donated to charity. The key here was isolating what customers didn’t like about dealing with insurance companies and turning these pain points into points of pride instead.
It’s clear that Telco has an image problem – nobody really wants to be in a loveless relationship, albeit one that seems relatively stable. Even if customers are reluctant to make the switch from their current providers, this isn’t something telco brands can rely on indefinitely. If nothing changes, apathy will turn to resentment, and eventually the telco sector will find it’s being given the cold shoulder as customers’ heads are turned by sexier, cheaper, more inspiring service offerings from tech companies with bigger ideas – and they’ll live happily ever after.