Top 10 marketing mistakes
Run-down of marketing boo-boos, and some tips to avoid them.
The rapidly evolving and notoriously competitive market for telecommunications services is bringing the operators' marketing departments new challenges, as well as offering tremendous opportunities to make their employers more money by creating better campaigns.
Operators across the various channels face an increasingly complex business environment. They may have a product and service portfolio that spans thousands of items. They are navigating the current shift towards delivering converged offerings of broadband, mobile and entertainment services. Operators are also fighting to earn more from existing customers, as well as to develop cost-effective ways to find and convert new customers to their services.
Mobile operators are struggling with high rates of customer turnover and continuous price erosion, as new low-rate operators and mobile virtual network operators enter their markets. Customer acquisition costs are high, and keeping customers is a top priority in a market characterised by so little product differentiation that customers can shop around for the best deal.
Combine this competitive landscape with the complexity of the products on offer, the increasing rate of introduction, proliferating channels to market and a bewildering variety of subscription schemes and the scale of the challenge for mobile marketeers becomes evident.
Doesn't suit you sir
The traditional 'one-size-fits-all' approach to customer marketing no longer makes sense.
Service bundles are offered with little flexibility in terms of personalisation, so many of the marketing messages that consumers receive are both badly timed and far from relevant. And they don't persuade users to adopt new services or buy new content.
Indeed, a recent survey of 752 mobile phone users, commissioned by Pontis from GfK NOP, showed that 70 per cent of them considered the marketing offers they receive from operators to be irrelevant and 64 per cent were downright irritated by them.
So where are the operators going wrong?
I have drawn up a list of the top ten most common marketing mistakes made by the operators:
Failing to ask whom the product is for
Product offerings from operators are too generic. They're often driven by emerging technology, rather than the need to address the requirements and expectations of real customers. Operators often create a large portfolio of products but fail to find effective ways to get them to the right customers at the right time.
The failure of free trial offers
Product launch campaigns that offer free usage to all customers attract lots of interest. But many operators fail to follow up quickly enough with customers who respond. That's a missed opportunity.
Introductory offers 'for new customers'
Mass-media marketing that offers special packages or free items to attract new subscribers can alienate existing customers. Saying that current users are ineligible for the offer in the small print doesn't solve the problem.
Missing the target
Operators often send untargeted marketing offers to customers. At best, these campaigns waste an opportunity to communicate effectively. At worst, they can undermine your brand by being perceived as spam.
Too little, too late to turn the churn
Operators don't react quickly enough to retain customers who are about to change service providers. Typically, efforts to retain customers only begin once they have said that they are changing service. At this stage, customer retention can be very expensive.
Failing to test campaigns
Operators often launch mass promotions and campaigns without actually testing the creative approach, perceived value and response levels. This can end in a failure to meet their objectives. Testing on a sample group and tuning the offer based on the results can dramatically improve campaign results.
Shotgun or sniper?
Operators are still not using the right media to promote their services to customers. They use expensive mass media such as TV advertisements where direct communications (through SMS messages, portal banners and similar options) would be more effective and cost less.
Valuing the customer
Operators are not segmenting their markets when planning and launching campaigns. As a result, response rates and customer take-up is very low.
Jumping on the bandwagon
Operators are not planning for or, in some cases, even reacting to, high-profile events such as concerts, shows and sports meetings. There are numerous marketing activities and service offerings that could be linked to such opportunities.
No time for reflection
Operators don't analyse past campaigns and offers to understand the customer responses and the resultant revenue. Analysing the return on investment of various types of campaign and the effectiveness of the tools and techniques applied can lead to better results next time. Too often the campaign analysis stops at a response rate and cost per response, rather than understanding the relationship between real revenue and real cost.
Back to basics
These mistakes may seem as basic as a beginner's class in marketing. Yet operators have become entrenched in traditional consumer mass-marketing approaches that have become irrelevant, costly and ineffective. Breaking industry habits is difficult, and this, combined with network limitations and lack of flexibility, makes it hard for forward-thinking marketeers to convince senior management that investing in change is essential to both campaign and business success.
The key challenge is to target the right customer at the right time with the right proposition.
The personal approach
The industry needs to follow the example set by online service providers, who have long made the most of the opportunity provided by the 'personal approach', with interactive suggestions linked to the users' preferences and real-time behaviour (for example during browsing or purchasing). Recommendation systems based on buying patterns, similar to those applied by Amazon, can be used to promote related content items, or to encourage customers to buy additional content, such
as music bundles, based on their lifestyles.
Operators need to adopt these techniques to survive and thrive. Tools are now available to address well-defined customer segments with relevant offers, by monitoring how customers use services or products in real time.
These tools provide a way to design, execute and measure the success of real-time targeted and personalised marketing offers. They tie together marketing design, online sales, dynamic communications and product offer processes, effectively automating the marketing IT. Such systems enable products to be configured dynamically and to be communicated immediately to customers, based on their preferences, history and current usage.
This may seem logical, but it is a step forward in an industry hampered by 'silo thinking', lack of flexibility, and an unsystematic approach to targeting customers. Some emerging operators also find this a more natural approach to marketing, which may mean a competitive edge for new entrants and a substantial risk to incumbents. It may seem a bold statement, but unless traditional operators change their marketing approach the end result will be customer and revenue loss on an immense scale.
Making more from customers
Treating customers as individuals can deliver striking results. Recently, a cable operator recognised that its key competitive advantage was delivering video on demand (VoD), yet many subscribers weren't buying this service. Through targeted promotions to various consumer categories the operator was able to convert users that had never bought content before. By analysing relationships between content categories it was also able to design offers that used purchases from one category to promote purchases in another. This persuaded VoD subscribers to buy premium movies and introduced customers to new categories, increasing sales in the promoted categories by 42 per cent over nine months.
Operators who want to do the same need to adapt their processes so that they can market highly tailored offerings to individuals and small groups of individuals.