By Ari Vanttinen,
Today’s communications service providers (CSPs) have a full plate. Their challenge is to adapt their business in a crowded marketplace shared by over-the-top (OTT) players and other emerging digital service and IT providers. Many CSPs need to admit their playbooks are broken. Delivering something valuable but not very unique means CSP margins will keep on eroding and being too differentiated means potentially marginalised business cases. Finding the right balance between these two dimensions is the key, and many CSPs are struggling with the innovation, creativity and courage needed to meet this challenge.
SALES AND MARKETING PLAYBOOKS WILL BE REWRITTEN IN 2015
In 2015, sales and marketing playbooks will be under the microscope. Research shows 70% of both B2B and B2C customers are unsatisfied with the digital buying experience they receive from CSPs. In a post-digital world, CSPs need to stop treating customers like it is 2010.
Benchmarks are being set by factors beyond direct competition. Apps, social media, the cloud and the sharing economy are all shaping buyer expectations. CSP marketing and selling strategies needs to be based on granular, dynamic and in-the-moment assessments of buyers’ contextual needs, behaviours and market dynamics. Additionally, their technological and operational capabilities need to follow suit.
At stake is CSPs’ ability to survive and succeed in a fast-evolving market to capture hearts, minds and wallets. Though some operators are addressing the era of post-digital business gradually, many more will take decisive actions this year to step away from the past and start building their own “Operation Nexterday,” which defines how they conduct business in the post-digital era and serve Generation Cloud.
Four major forces and their sub-forces will define the industry this year and put more pressure on CSPs to either adapt or fall behind: increased customer expectations and behaviours, lucrative monetisation opportunities, faster cloud and virtualisation technology adoption, and a push for fast data with embedded intelligence and automation instead of Big Data.
#1: GENERATION CLOUD IS DIFFERENT: FROM CUSTOMER SEGMENTATION TO FRAGMENTATION
The post-digital era has introduced a major power shift from sellers (CSPs) to buyers (end users). Customers want to try, buy, rent, use and dispose digital content and services at hyper speed on their own terms and engage through the medium of their choice, while receiving contextually and individually relevant recommendations.
Their “trusted advisor” is Google, social circles and peers – but not brands. They will not tolerate businesses violating their time, so CSPs need to stop interrupting customers with outbound sales and marketing.
CSPs need to re-consider how their “Generation Cloud” customers truly want to buy from and interact with them. We will start seeing a shift toward a “Segment of One,” where buyers’ individual moments are identified and analysed while recommendations and actions are defined accordingly. The technology is finally sufficient enough for marketers to achieve this long-lasting dream of hyper-contextual marketing.
Operators will drift away from costly and unsuccessful one-size-fits-all promotions, learning to use intelligent, fast data, create contextual segments and offers, implement action automation, and close the loop with the perfect service and order fulfilment.
#2: MORE TO MONETISE, BUT LESS TIME TO DO IT
CSPs have more monetisation opportunities at their fingertips today than ever before. However, they have less time to seize these opportunities and develop new offerings.
Time will become the main business asset. It takes CSPs four to eight months on average to develop a new commercial service or product. In 2015, CSPs will invest in a stronger technology foundation to quickly package, sell and profit from the explosive amount of new data based on services, third-party content and applications.
For example, an increasing emphasis on customised mobile data packages has encouraged operators to develop new targeted plans for customers. CSPs experiment with plans that include zero-rated apps, timed app use and sets of apps for a flat fee, and these kinds of personalised plans will need to become more prevalent. A targeted mobile data package built around individual preferences better reflects modern, dynamic data consumption behaviours.
More CSPs are developing an ecosystem with OTT content partners to create bundled or sponsored plans that appeal to digitally savvy consumers. For example, Vodafone successfully started offering apps such as Now TV, Spotify Premium, Netflix and Sky Sports Mobile as part of a specialised 4G data package.
A new set of tools are needed. Sophisticated data monetising, policy and charging solutions, supported hand-in-hand by real-time business reporting, will enable CSPs to test and bring new service offerings to the market faster and also increase their speed-to-revenue.
#3: GROUND-TO-CLOUD: NFV REVOLUTION LEADS TO OPERATOR EVOLUTION
Any conversation about infrastructure transformation inevitably must discuss the impact of Network Function Virtualisation (NFV), particularly on telecommunications. NFV brings compelling opportunities for greater agility, scalability, flexibility and the ability to create new services and serve complex environments.
2015 will be an inflection point, where many operators tear down their legacy infrastructure and embrace NFV as a strategy to speed things up. Those remaining on the fence will need to make a decision soon, because the competition is passing them by.
Many more operators also recognise that the virtualisation revolution affects more than the network, but also entire business systems, such as front-office CRM platforms and the whole service capability layer. That change in focus will drive a more clear direction for the future of NFV and encourage more decisive action, leading to a faster evolution of the industry’s infrastructure.
Virtualisation will bring savings, simplicity and flexibility, but legacy infrastructure still remains crucial for business. The new normal is all about managing a hybrid and more complex environment from Ground-to-Cloud.
#4: INTELLIGENT FAST DATA
2015 will be a make-or-break year for Big Data and analytics. Costs and C-level frustration are mounting, and proven business cases and value from analytics must be seen this year. The whole paradigm needs to shift from the Stop-Store-Find-Analyse-Decide-Do approach to one in which data is refined and analysed simultaneously, and as it flows, actions are taken automatically, and insights are drawn instantly.
Of importance is “invisible intelligence” hidden in every layer of customer interactions, operations and technology infrastructure, which if leveraged, grants a significant competitive advantage. Gartner describes “advanced, pervasive and invisible analytics” as those embedded within a new range of sources, including wearables, social media and the Internet of Things (IoT).
These sources all yield crude data that, when refined, can better inform everything from CSPs’ marketing campaigns to IT operations and business decisions. In 2015, a new technology layer – one we like to call the “Data Refinery” – will be added to corral and synthesise Big Data into automated and accurate actions.
The Outlook for CSPs in 2015 – Implementing Operation Nexterdays
Every CSP needs to commit to its own Operation Nexterday. How will your business look the day after tomorrow, and what can you do now to address those changes? No one knows for sure what the future holds, but it’s clear the era of operational inflexibility and fixed, hard-coded models is over.
Taking advantage of increased flexibility, some CSPs will experiment with long-tail and mass tailored offerings with third parties to maximise fresh revenue opportunities, while others have embraced NFV. Others have scratched the surface of using fast data and turned bolt-on analytics into built-in, invisible intelligence.
The question is: how do you manage the inevitable complexity and friction caused by “Generation Cloud” customer demands, network pressure and market competition? The answer: by choosing technologies and processes that are designed to eliminate these hurdles.