First, we should probably try and determine why any communications provider, be it a wireless, ISP or cable company, would want to be known as the ‘un-carrier’? Well, we do not have to look very far to find our answer. Advocacy rates – measures used to determine not only the satisfaction of customers but more importantly, how strongly they feel connected to a brand, how much they will proclaim that brand to family and friends, provides a peek at the answer.
The consumer electronics industry is littered with ‘fanboys’ who staunchly defend the validity and prowess of their preferred brands like Apple and Google, not to mention sports entertainment franchises like the NFL teams in the US or FIFA clubs around the world - we know how insanely they defend their brands.
However, historically for communications providers (wireless, ISP and cable,) the advocacy rate is really poor when it comes to measuring how much we consumers love to hate them. In one study IBM found that globally for every advocate for a communication provider, there are 3 antagonists. The 2013 Temkin Experience Ratings(see chart) shows poor ratings for communications providers in the eyes of the consumer as compared to other industries.
We should also consider the massive shift the industry has gone through over the past few years and continues to go through today, as more and more services that were traditionally the domain of the telephone company are now being provided by over-the-top (OTT) providers and social and messaging companies. These companies have long been leaders in social and mobile engagement with consumers and have pushed the envelope of customer experience and free services (it is amazing what we as consumers will endure for a free service!) across all industries and as a result, customers now have higher expectations and demands of their service providers.
Together the combination of the newly empowered consumer and the poor experience history of the industry have combined to create a petri dish, primed to grow a completely new kind of entity: the un-carrier. Imagine you are the fourth largest wireless provider in a saturated and mature market? How do you go about differentiating yourself from the competition? By becoming the antithesis of what consumers think about the industry.
T-Mobile has begun the shift — from a telecom service and network-based company to a customer centric organization — by listening to their customers and delivering solutions in a maverick style that seem to mirror those of its CEO Jon Legere (who was thrown out of a rival’s party at CES this year). Offers like aggressive pricing with no more contracts, no data usage overcharges, the ability to switch mobile phones anytime and data and messaging included – (even internationally) have forced a change in the market that competitors have been forced to react to.
Yes, but does it work, trying to become everything an industry traditionally is not? And how. In the first quarter of 2014 T-Mobile added more subscribers than the number #1 and number #2 market players combined. We’ve been telling our carriers for years what we think of them (see chart) and perhaps with the success T-Mobile is having the rest of the industry will begin to listen as well.
Long live the ‘Un-Carrier’!
The landline phone dominated communication for nearly 90 years with no significant technology advancement. Consumers were largely dependent upon voice as the primary means of communication. Service was provided by large corporations and the barrier to entry for alternatives was so high as to essentially result in a monopoly.
But, the last 20 years has seen an unprecedented advancement in technology, and the communications world has forever changed. The proliferation of cellular devices and the broad adoption of the Internet were points of origin for new ideas, and the vision of pioneering players like Skype and Apple threw gasoline on the burning embers of change creating a firestorm of innovation that would eventually bring us to where we are today – living in a world where what I think of as traditional telephone services may no longer be provided by a traditional communications service provider.
In 1998 nearly all US households used a landline phone, and now it is under 50% and falling. It’s not just cellular taking over, because we are seeing cellular voice services in steady decline too. Grabbing market share today are new voice, messaging and content services – once considered the domain of the telephone company — being offered up by a new breed: the digital service provider (DSP).
The convergence of over-the-top (OTT), telecommunications and media companies into DSPs is being driven by the expectations and needs of the socially connected consumer. The proliferation of high speed mobile data, internet-based media delivery and cloud services has begun in earnest. As media, cable and telecommunications companies drive toward non-traditional direct-to-consumer products and services through growth channels like mobile and social, and OTT providers expand to offer traditional communications services like voice and messaging, we are experiencing the birth of the Customer-Activated DSP. This new organization thrives in the burgeoning “API economy” and utilizes rich customer insight and experience management to offer an ever-widening array of digital products and services provided by new relationships with partners and competitors alike.
So are the traditional telephone companies simply out of the picture now, unable to compete in the new world of digital? Absolutely not – or at least not if they are smart and decisive about their commitment to remain relevant to their customers. Traditional CSPs are sitting on a tremendous amount of information and data from a network that makes them very relevant to their customers – as long as they know how to use it. The ability to analyze and personalize offers and experiences relevant to their customers is not the future anymore, it’s the now, and the expectation of all their customers who have been spoiled by innovative retail experiences with Amazon, Apple and LL Bean and the free OTT offerings of companies like Google and Yahoo.
This past February in Barcelona, Spain, Mark Zuckerberg, CEO and founder of Facebook, got up in front of a room full of telephone company executives to say they should provide free data access to services like Facebook and that he intended to offer 450 million users around the world traditional voice services through recent acquisition WhatsApp. This proclamation represented the final proof that in an industry no longer bound by the traditional barriers to entry, if today’s CSPs wish to succeed, they will have to do so by becoming a utility to provide data connections or by evolving into a diverse DSP themselves offering non-traditional services and partnering with OTT providers. And as communications providers evolve their services and solutions, their engagement systems are going to have to change as well to provide omni-channel issues across mobile, social and physical. The ability to understand and have a meaningful dialogue with their customers is the key to transforming themselves from a historically antagonistic relationship with their customers to one of advocacy.
The time is now to be bold if today’s telephone companies want to become tomorrow’s digital service providers.
The term ‘beacons’ or ‘iBeacons’ as the Apple variant of the proximity-detecting devices have been called are all the rage with marketers looking to personalize experiences for their customers. Beacons have become a hot topic lately because with the release of iOS 7.1 Apple has fully embraced software support for the technology embedded in over 250 million Apple devices in use around the world. But Apple is not the first on the beacon bandwagon as companies like Digicash and Paypal have a beacon strategy too. Beacons have been hailed as ‘over-hyped’ in some press clippings and ‘under-hyped’ in others. But what’s the real story – can beacons be the magic bullet for marketers looking to target individuals on their mobile devices? The answer is yes, potentially, but not without some help.
Let’s start with what beacons are and what they are not. A ‘beacon’ is nothing more than a simple device that detects distance between itself and a transceiver chip through a low powered version of the Bluetooth 4.0 standard called BLE (Bluetooth Low Energy). It can detect that distance over a much larger range than other near-field protocols like NFC (Near-Field Communication) and it provides us with a much more precise ability to detect proximity than the traditional methods of Wi-Fi, mobile GPS and cell tower triangulation does. If you use any mobile device tracking solutions like ‘Find My iPhone’ you’ll know that you can find your iPhone… down to about 100 yards give or take signal strength, etc. With a beacon your mobile device could be detected from 10 feet to less than 1 foot in distance.
Sounds great, right? So what’s the catch you say? Well, the ‘catch’ is that a beacon is blind and dumb – it cannot do anything except detect and report distance – it cannot analyze this information and certainly cannot execute upon it – heck by itself the beacon does not even know where it is located physically. That’s where the ‘help’ we mentioned earlier comes in. It takes analytics software like IBM’s Presence Zones to be able to ingest location data from sources like beacons, Wi-Fi, GPS, etc. and turn that into information that can be used by marketers to interact with their customers whose recent travel patterns or current location warrant a personalized offer or dialogue. Marketers can then use their campaign solutions for traditional channels or mobile channels such as Xtify’s Mobile Push technology to enhance the customer’s experience at their location.
So how will all this work in the real world? Well, assume you are at the World Cup championship game and the stadium is jammed. You are waiting in the line for the restroom for a long time – and you are being detected by beacons – and the stadium’s customer support system sends you a mobile notification that the restroom 4 sections down from you has zero wait. Or you are waiting for a bus in Amsterdam and listening to a new DJ you heard at your favorite club last weekend which you are streaming from Spotify. The beacon in the video advertising poster next to you detects you and coordinates with Spotify to change the advertisement to inform you that your favorite DJ will actually be at another club live this weekend – and gives you a digital 2D barcode to capture with your phone giving you details and a discount on the cover charge. Or when you enter your favorite department store, where you have a loyalty membership and their smartphone app, you are detected by their proximity beacons which interact with your mobile app giving you the latest discounts and new products in the areas that you have shared are your favorite directing you to exactly where in the store your interests lie.
So we are back to the start – yes beacons can revolutionize the way marketers interact with their customers – but not without some help. The beacons are just the start – the real value is the analytics and execution of the information gathered from the beacons. For those organizations that build a true strategy for detection, through analysis and execution, the future looks bright.
IBM CEO Ginni Rometty spoke last week at Mobile World Congress in Barcelona, Spain. She talked about three key components of technology that will drive growth in the coming years for communications providers and organizations across industries. The first two were Data (Big Data!), which she described as the ”new natural resource,” and Cloud, driving the ”API economy,” or a vision of hybrid clouds in which any task can be modeled and executed quickly and efficiently to meet any requirement. But the third I think was the big one – somewhat propped up and driven by the first two even: Engagement.
Engagement, in this context, is defined as ”contact by fitting together” or “the act of sharing in the activities of a group.” When considering what Engagement means, perhaps all kinds of things come to mind, but at the core I believe it is about connecting people – connecting people through new ideas, new opportunities, new ways to educate, new ways to communicate and new ways to innovate.
Ginni said Engagement hangs in the balance of speed, security and personalization (she likes things that come in threes). Speed comes from the cloud and that API economy, security comes as well from our devices; the tools we use to connect. Personalization is the realization of our insight and knowledge of one another and the unique offers and experiences we expose as a result. It is at the core of Engagement.
When it comes to commerce in this new paradigm-shifted cosmos of personalized big data clouds, we have to understand that our customers are ahead of us. They are already comfortable with this new shift, demanding that we, as service providers and retailers, meet them where they live, work and play. Consumers are not just tearing down the traditional walls of the business model for an industry – they are redesigning and rearchitecting it to their wants, needs and desires. Staggering growth in mobile device capability, social media and person-to-person communications, data speeds and accessibility, crypto-currencies and, of course, the Cloud and Data explosions have created an environment that requires organizations to continue to invest in solutions to support these empowered customers with open, flexible commerce solutions.
What if everyone wanted more of your products than you could provide? What if they wanted it faster and in greater quantities and more often than ever? Sounds great doesn’t it? But what if they wanted to pay less than ever for larger quantities? What if they didn’t see value in paying for that product or service, just in the free tools and capabilities it enabled provided by other companies? What if you had to spend large amounts of capital to keep providing larger quantities of your product without seeing a proportional increase in revenue for those products?
This is exactly the world that telecommunications providers are living in today – their services (the network essentially) are in more demand than ever before and that demand shows no sign of slowing in the next 10-20 years as the world continues to ingest more data at higher rates than ever before in areas that have never before had connectivity. There have been many concerns expressed even this week at Mobile World Congress that the CSP could look like UPS, FedEx and DHL soon – providing nothing but the transport layer for the goods that flow through – in a situation where the customer expects the service to work perfectly and only when it doesn’t does the service provider cross the mind of the consumer.
In fact in quite a bold move on Monday this week Mark Zuckerberg, CEO and founder of Facebook stood up and told a room full of telecom providers they should be offering free data services, right after his company announced it had purchased What’s App and would be adding voice services for its 450 million users – which will further put pressure on telecoms in the EMEA region.
Is this necessarily a bad thing? Perhaps not, and there will most definitely be carriers who decide this is an acceptable role in their relationship with the consumer. As network virtualization and IP-based telecommunications services dominate they will bring with them the ability to drastically reduce cost and make this potentially a viable business model. But for many, if not most others, they are not content to cut cost and hope to find a niche to survive in and while some telecom providers like SingTel CEO Chua Sock Koong reject the idea of becoming a ‘dumb pipe’, they recognize the revenue declines in pure network services and are branching out to provide ‘digital life’ and extra value services for customers.
So if providers are going to grow in this new world order how do they do it? Monetize the network. I wrote a blog a year ago this week telling providers they were sitting on a gold mine – they just needed to figure out a way to mine it. Today providers are doing this in a number of ways today – providing subscriber data, enabling machine-to-machine connectivity and AT&T has announced that they will be seeking ‘sponsorship’ data for their network – where companies or events (NFL or FIFA perhaps) might sponsor all data of a particular event or contest over the AT&T network – providing some relief for the end customer.
Some real innovators like Safaricom in Kenya who is enabling their customers over their network to pay rent, make person to person payments and even register new births using an open platform that anyone can subscribe to services from allowing immediate access to their 30 million customers. This partnership with OTT providers puts Safaricom much closer to the value perceived by the customer of the services they receive.
So if providers are going to be offering all these new products and services how are they going to package them up and sell them? How can they manage orders of physical products, physical services and network services that could come from a variety of network partner participants and require different levels of billing, activation and membership? They need to invest in customer-centric insight and order management – a solution that is focused on the customer, not on the product or service-centric; because frankly they don’t know or want to anticipate what services their customers will demand next over their network or what partner will arise to provide it. The solution should have a hyper-focus on the customer; true customer insight, campaign and experience management, omni-channel and mobile first priorities, flexible ability to manage physical and virtual products and services, lightweight and cloud-based with inventory and capacity visibility and status across all fulfillment systems.
Microsoft CEO Satya Nadella recently summed up the situation for telcos perfectly: “Any organizational structure you have today is irrelevant because no competition or innovation is going to respect those boundaries.” The providers who move toward this digital service landscape will be nimble and flexible when presented with new challenges and competitors – and based upon the last 5 years – we know those challenges are coming, the question is whether this time we’ll be ready for them?