There are many ways telcos can increase their B2B sales, say Jad Hajj and Wissam Abdel Samad.
Telecom operators need to undergo a major shift in their capabilities and their outward facing identity to revive the fortunes in the vitally important business-to-business (B2B) segment. The challenge they face is that revenues from traditional B2B voice and data communications services are stagnating, while new sales from IT-based offerings are not growing fast enough to compensate for the loss. Complicating matters, telecom operators are also finding it difficult to reduce costs and innovate given their tangle of legacy technology and business and operations support systems.
To make matters more difficult, their business customers have high expectations and do not feel that telecom companies are meeting their needs. Their sense of disappointment is leading to high levels of customer turnover. In particular, younger business executives are quite demanding given that they have grown up with such customer-centered digital products as e-commerce and streaming video—products that respond immediately to what users want. These managers find the cumbersome nature of some telecom operators’ B2B offerings frustrating.
Unsurprisingly then, telecom operators are facing increasing competition from two kinds of players. The first kind is companies that are going head-to-head with telecom operators in IT services domains, and have technical capabilities and expertise that telecom operators do not possess. Providers such as Cisco are selling similar services to telecom operators, such as managed network and security services and software-based VPNs, through direct relationships. The second kind is new entrants into the market that are more agile and that believe they can take a large share of the B2B business by disrupting this sector more fundamentally. Companies such as Amazon are coming up with new, customer-focused offerings that derive from their existing digital know-how and ability to innovate, offerings that telecom operators cannot presently match. These firms are also able to introduce new products very quickly.
Telecom operators have their advantages when dealing with these competitors, such as their network infrastructure and long-term connections to business customers. However, to overcome the above challenges they need to become customer-focused and undergo a significant alteration in their capabilities. In essence, they have to identify and build a new strategic identity. An operator should examine its distinctive capabilities to decide what kind of company it wants to be and can be. This should lead to a profound change in how the telecom operator deals with its customers.
To achieve this transformation, telecom operators should follow three main paths: simplification, revamping how they go to market, and mastering how to go from innovation to scale.
Simplification means rethinking cumbersome and costly processes by redesigning them from the customer’s perspective. Operators should understand how customers interact with them, such as through ordering, self-service, and smart contracting. Too often, B2B customers find ordering services to be overly complicated and costly. There is also too much effort and cost for the operator to take and execute the order. Telecom operators can instead make ordering simpler and more pleasant for customers—and cheaper for themselves. They can do this by using platforms that bring them and their customers together, data that provides insights into what customers want, and analytics that turn these insights into automated processes.
Revamping how they go-to-market means that telecom operators change product design and how they engage customers in business development and sales. This involves “design for trust” - whereby new product designs are directly informed from customer inputs and “co-created” with them, which demands new ways of engaging with these customers and selling to them. This way, telecom operators would ensure that their products are designed around specific customer needs and will provide an improved customer experience. They can also deliver personalised experiences down to the individual buyer. In this way two different clients from the same B2B customer company can have two different user experiences. For example, a procurement manager from a B2B customer will want to interact with the telecom operator in a different way to a network engineer. Also, telecom operators can shift the burden of product selection away from their customers to themselves by using analytics to provide product recommendations, in a similar fashion to retail e-commerce sites.
Finally, telecom operators need to master how to go from innovation to scale. This means behaving like venture capitalists by experimenting with different, separate programs and creating new units that pilot innovative products—and then rapidly scale the successful ones. For telecom operators that will mean small innovations that can be introduced without any interruption to service. Telecom operators could also create a new, separate organization that would act as the center for innovation and that could absorb over time parts of the legacy business. They could use a model similar to venture capital in which they invest small amounts in many initiatives, and then build on the successful ones. Telecom operators could also adopt modular solutions that are interoperable and reusable, thereby avoiding the sometimes messy portfolio of technology solutions that comes from designing in silos.
Telecom operators have no choice but to radically change their approach to B2B services. Without urgent action, they face losing yet more business. By adopting transformation, they can generate savings in terms of the cost of IT infrastructure, sales and support thanks to an increase in customer self-service, less overhead because of smart pricing, and lower staffing costs. At the same time, they will enjoy increased revenue because they will introduce better products much faster and they will retain customers who are pleased with their improved customer experience.