January 23-26, 2007• Ft. Lauderdale, Florida
Customer-Centered VoIP Marketing
Internet Telephony Conference & Expo East 2007Presented by Karen Strouse
Management SolutionsFort Lauderdale, Florida, USA
January 23-26, 2007• Ft. Lauderdale, Florida
…but they are nothing until I call them.
Some of them are strikes,and some of them are balls….
…and I call them as they are.
The Customer Defines the Business
The past
The present
The customer
…and I call them as I see them.
January 23-26, 2007• Ft. Lauderdale, Florida
Bundle Mythology - Debunked
• Everyone wants bundles, but...
• The motivation for bundles is one provider, one bill, but...
• Customers can’t wait for quadruple play, but...
• Fixed-access providers are well-positioned for quadruple play, but...
• Few buy bundles.
• The purchase criterion is price. Customers are suspicious of too much commitment.
• Most customers only bundle 2-3 services
• Many households don’t bother with conventional 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
MinimalMarketing
Focus
NicheMarketing
(bowling alley)
BuildMarket Share
(Tornado)
After: Crossing the Chasm, Geoffrey A. Moore
Sell tothe end user(Main Street)
ProductLeadership
OperationalExcellence
CustomerIntimacy
ValueDisciplines
Market Strategie
s
January 23-26, 2007• Ft. Lauderdale, Florida
Product Development:In-Stat findings
0 10 20 30 40 50 60 70
Percent of broadband households
Using VoIP
Using IM
Downloading music
Mobile text messaging
Mobile email
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 factorfor customers selecting a bundle
January 23-26, 2007• Ft. Lauderdale, Florida
Price:Aim for Sustainable Critical Mass
• Create a profitable commodity service in price-driven 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, high-quality 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
Commodity
Preferred
Brand
MarketLeader
Service provider commands price premium
Purchase decision based on price alone
Service provider’s reputation affects purchase
Bias towards a particular service provider
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 long-
term• Recognize that brand extensions have risks
January 23-26, 2007• Ft. Lauderdale, Florida
Segmentation:Price/Service
After: Strouse, Karen, Marketing Telecommunications Services: NewApproaches for a Changing Environment, Artech House, 1999
WholesaleSystemsIntegrator
Retail TurnkeyServices
ResellersEducation,
local government,not-for-profit
Consumers,low-end
Price-driven segments
Multinational,Fortune 500,technology-dependent
vertical markets
Mid-sized and vertical markets
where technology isn’t the primary
mission-critical task
Small business, SOHO market,telecommuters
Service-driven segments
Offer ancillary services,
information services,support
Target a verticalor geographical
submarket
Target ademographic
or geographicalsub-segment
Opportunitiesfor
new entrants
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
27%
48%
62%69% 73%
0%
25%
50%
75%
100%
NoDiscount
5% 10% 15% 20%
Source: TNS Telecoms
January 23-26, 2007• Ft. Lauderdale, Florida
Thank you!
Karen Strouse
www.karenstrouse.com
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