Empathy, compassion, communication… without them, there’s no doubting that our world would have become a much darker place during 2020. It’s been a year that few can draw parallels with, yet it’s been a year where we’ve realised the importance of a value that many have overlooked… human connection – a value that is weaved into the fabric of every experience a brand can offer, or at least should be.
As our digital, connected world transforms how brands engage with their customers, those operating in Telecoms are facing a unique set of challenges as they struggle to deliver clear value propositions from their network and services. As Telco services become increasingly commoditised, providers have struggled to differentiate their offering in the eyes of the consumer, with most operators sharing infrastructure with competitors.
At the same time, social media and messaging platforms (think Facebook Messenger and WhatsApp) are disrupting the sector by offering more convenient digital voice and data products, meaning consumers are more willing to switch providers based on price and, as a result, Telco brands have become caught in expensive quarterly cycles of acquisition and churn.
There are signs, however, that the Telecoms sector is standing at an inflexion point, with opportunities for growth and digital innovation emerging across a number of exciting areas, including customer experience, ecosystem partnerships, IoT, mobility and 5G. Here, we take a look at some of the biggest trends that will dominate the Telco industry during 2021, and beyond…
1) 5G will finally offer Telco competitive differentiation
With over 200 operators in 88 countries investing in the technology, the advent of 5G networks will create the next evolution for broadband connectivity. Unlike the shift from 3G to 4G, the adoption of 5G is much more than simply offering higher speed. With 5G, latency (or lag) is significantly lower and capacity much greater than its predecessor – typically 100 times greater than 4G.
Dramatic improvements in 5G mobile technology are set to play a crucial role at the heart of digital connectivity and transform consumer behaviour, raising their levels of expectation of new products and services across the telecoms, media, retail, financial services, and education sectors (and more).
For operators, 5G poses challenges as well as opportunities – such as increased capital investment on infrastructure and possible disintermediation from virtual network operators. However, many of these are short-term concerns – in the long run, 5G technology will bring a wealth of benefits to both the enterprise sector and consumers, with Telcos sitting at the centre of this massive transformation.
Coupled with new technologies such as network function virtualisation (NFV) and software-defined networks (SDN), 5G can help reduce operating and capital expenditure costs, while new business models, most notably around IoT, will help drive the revenues of Telecom operators over the next few years.
2) Product diversification on the rise, with IoT taking centre stage
Inevitably, 5G will herald the next stage of Internet of Things (IoT) development, enabling billions of devices to be connected both to each other as well as the internet simultaneously. This will help drive productivity and efficiency in the workplace as well as create potential opportunities for companies to deploy new applications and business models.
Moving into 2021 and beyond, there is a huge opportunity for Telco operators to consolidate their position in the IoT space as businesses across all sectors connect more devices to the internet to help drive greater efficiencies, increase competitiveness, develop new business models, and provide solutions to problems. For example, the Vodafone IoT Barometer 2019 found that over a third (34%) of organisations have incorporated IoT technology into their business, with 95% of adopters having seen measurable benefits from their IoT projects, and over half (52%) realising significant returns on their investment.
This not only provides brands with a wealth of options for expanding into IoT-driven markets – think Vodafone’s expansion into business and consumer IoT and e‑commerce – but it also means Telcos probably boasts the biggest library of customer data of any industry. Which brings us on to our next trend…
3) Omnichannel data and analytics will receive a boost
The sheer amount of customer data that Telco brands possess is staggering. In fact, it’s often too much to handle, and many Telcos struggle to translate the abundance of insights they have into connected and relevant customer experiences.
For example, as a consumer, switching between Telco brands is often a frustrating experience, and not always because your existing provider makes it difficult to leave. I recently switched provider, and was astounded at the sheer number of complicated pricing models on offer, enough to make even an experienced marketer’s head spin.
Thankfully, Telco brands recognise this shortfall, and are pouring investment into bolstering and refining their omnichannel data and analytics, namely around segmentation and digital asset and content management. With the right investment and technology in place next year, brands will be able unify online and offline customer experience to identify consumers and better understand their behaviour.
For me, that would have meant a couple of personalised and streamlined offers from my potential new provider, based on my old contract details and other data collected during the early stages of my customer journey. And, for existing customers…
4) Greater focus on customer lifetime value
Fortunately, Telco brands are finally beginning to wake up to the benefits of keeping their existing customers comfortable and content. After all, it’s no secret that when it comes to customer satisfaction surveys and NPS (Net Promoter Score) benchmarks, Telco lags behind other industries.
Like much of the marketing world, the cost of acquiring new customers in Telco far outweighs retaining existing ones. For this reason, 2021 will see Telcos placing greater focus on their NPS, Voice of the Customer, and customer satisfaction surveys. What’s more, they’ll use that insight to actively improve the customer journey, feeding learnings into digital service offerings and driving users towards more digital self-service and tools.
As we know from other industries, consumers are prepared to pay more if they feel like they are getting a good service – meaning churn reduction will be a huge differentiator for Telcos next year.
5) Brand advocates will both attract and retain
Many Telco brands have combed their data archives and built business models accordingly – for example, providers that fall on the lower end of the pricing model often offer extremely flexible subscriptions as their USP.
Their way of reducing churn – when they make it so easy to leave – is to incorporate brand advocates into their customer-centric models, creating forums and loyalty promotion campaigns to not only engage their existing customer base, but to attract new subscribers through word of mouth and peer referral groups.
With influencer culture at its zenith, Telco brands will increasingly use not only their customers, but also famous figures (I’m looking at you, Kevin Bacon) to attract and retain people.
6) Customer-centricity will tie it all together
Of course, the one key trend tying all these various approaches, technologies, and transformations together is customer-centricity. The fact that most modern-day customers demand consistent service, sophisticated capabilities, and personalised journeys across every aspect of their brand experience represents a huge opportunity for Telco companies to achieve exactly what they’re been struggling with for so long – true competitive differentiation.
Telco brands who pour not just investment, but long-term strategic thought into transformation programmes will possess the ability to build long-lasting brand awareness, enhance new and existing digital customer experiences, and create business models when market trends demand it.
In doing so, they’ll be able to escape the expensive acquisition cycle. Focus on human connection and treat customers as long-term assets by building organisation-wide governance and incentives structures – that way, Telcos will transform the revolving door into a loyal and consistently engaged customer base, for life.
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