Verizon Wireless, Sprint and Alltel

Appendix P: Promoting Telecom

• Premiered push-to-talk services, transforming an enterprise-focused P2T market that was ppreviouslyy the sole province of industry standard-bearer Nextel into a fiercely competitive environment poised for growth into the consumer sector. Ankeny, Jason. The New Push Behind P2T. Telephony Online. May 1, 2005.

Customer Relationship Management (CRM) • Has never been among the strongest attributes of the wireless industry. • Advent of wireless number portability changed h d this. hi • A complaint was no longer just a complaint, but the first step in an increasingly quick process of a carrier losing a customer to one of its competitors. O’Shea, Dan. Complainer’s Paradise. Telephony Online. May 1, 2005.

Cell Phones • • • •

Endorsements by celebrities: Verizon “Get More” by Catherine Zeta Jones Word of mouth: “live”, custom-tailored without limitation to speed and scope Rates and reliability claims on broadcast TV, cable TV radio Consumer product magazines, catalogs, newsletters and directories. Ehrlich, David. Track Marketing.

1

Cell Phones •

•

Sponsorship and ads in major motion pictures, music videos and television shows to spread reach Sponsorship of events and ads in program guides

Calculation of Sales and Marketing Expenses (per new subscriber) Commissions

$175

Handset Subsidy

$75

Advertising

$175

Other

$10

Total Subscriber Acquisition Cost

$435

Average Life (months)

30 mo (2.5 years)

Amortized Monthly Subscriber Acquisition Cost

$15

Deloitte & Touche, “The PCS / Wireless Marketplace” Ehrlich, David. Track Marketing.

Telecommuting: Marketing Focus –Stress efficiency of operations resulting from telecommuting: save ti time, money andd energy –Emphasis on flexibility, stability, and security of platform.

Mobile Music • Mobile operators promote music service to differentiate their brands and to highlight the 3G offerings Husson, Thomas, “Mobile Music: Identifying opportunities in a Nascent market”, Jupiter Research, January 17, 2006, pg. 2

2

Promoting Cellular-Phone Services • Cellular-service providers promoted mainly pre-paid services to the college and teen generation, • But this does not help with new services

Source: Wireless services get wakeup call from youth; Cingular, Verizon spy spending potential in teens, college-age kids, Crain Communication 2005

Promoting Cellular-Phone Services • A lot of advertisement in newspapers in 2006 • Ads about music services, phones with devices, but often not prices for services. Source: What cell phone ads don't say, San Francisco Chronicle 2006

Promoting Cellular-Phone Services • Verizon started to promote phone services to 15 year old in 2005, trying to establish loyalty Source: Wireless services get wakeup call from youth; Cingular, Verizon spy spending potential in teens, college-age kids, Crain Communication 2005

Mobile Phone Promotion • As market matures, mobile phone operators, such as V i Verizon, ttry to t convince i consumers in their campaigns to switch to their network Source: Phone Companies Push Harder to Get You to Switch, Promo 2006

3

Mobile Phone Promotion • Cingular Wireless sponsored contest on YouTube for the next internet star • Verizon Wireless uses its music service and cooperation with popular TV shows, such as Desperate Housewives Source: Phone Companies Push Harder to Get You to Switch, Promo 2006

Mobile Phone Promotion • Cellular providers need new growth story • Hope p that consumers download music through their wireless networks • Marketing campaigns are targeted onRising that issues Source: Competition in Cellphone Music, New York Times 2006

Mobile Phone Promotion • Music is one of the most important marketing subjects for wireless networks in 2006, as cell phones turn into MP3 player Source: Phone Companies Push Harder to Get You to Switch, Promo 2006

Mobile Phone Promotion • Market segmentation by demographics • Special advertisement and campaigns i for f Hispanics, i i as these is the fastest growing group in the U.S. with many cross border calls Source: Cell Carriers Seek Growth By Catering To Hispanics, New York Times 2006

4

N

Mobile Phone Promotion • Verizon is sponsor of music events from stars that are singing in Spanish • Print billboards in Spanish

Marketing Phones • More than 230 million cell phones in America (approximately 3 for every 4 people) Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

Source: Cell Carriers Seek Growth By Catering To Hispanics, New York Times 2006

N

Marketing Phones • However, phone companies are still utilizing marketing campaigns with a sense of intimacy.

N

Marketing Phones • Ex. AT&T –“Reach out and Touch S Someone.” ”

• Ex. Alltel –“My Circle”

Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

5

N

Marketing Phones

N

Marketing Phones

• Ex. T-Mobile

• T-Mobile research

–“Stick Together” –“myFaves”

–65% on cell phones go the same five fi people l –Consumers wanted networks built around them

Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

N

Marketing Phones • T-Mobile Fave5 has “had the fastest adoption rate of any service we've offered," offered " Beigie says. "And it increases calling in general." Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

N

Marketing Phones • T-Mobile nearly doubled its business during the time that Catherine Zeta-Jones Zeta Jones was its spokeswoman. Howard, Theresa, “T-Mobile Targets Five Folks You Call Most,” USA Today, April 16, 2007. p. 7B

6

N

Marketing Phones

N

Marketing Phones

• Verizon Wireless, AT&T Wireless, and Sprint Nextel now allow banner ads on landing pages.

• Proctor & Gamble’s Mobile Ad Lab will be testing 35 mobile programs over nine months.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

N

N

Marketing Phones

Marketing Phones

• Some companies are using traditional marketing tools such as billboards and tv ads to encourage people to text in codes.

• SMS (short messaging service) is the system by which consumers are voting in polls, answering trivia, and entering contests.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

7

N

N

Marketing Phones

Marketing Phones

• Other companies are using other veins of new media (i.e. the web ads) to encourage searching and forwarding information to phones.

• Others are experimenting with the very latest in marketing on cell phones – placing actual commercial programming onto the phone.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

N

Marketing Phones • Phones as a “brand response mechanism” –The Th number b off people l that h respond to a spot show how effective it was Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

N

Marketing Phones • Ex. Diet Pepsi encouraged NFL fans to text in their “Rookie of the Week”

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

8

N

N

Marketing Phones

Marketing Phones

• This both established a connection with the consumer and gauged the spot’s impact impact.

• Companies like Toyota and Burger King sponsor mobisodes and air 10-second 10 second ads during breaks.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

N

N

Marketing Phones

Marketing Phones

• 72.4% of adults have cell phones. • Highest i h demographics d hi are college students and business travelers.

• 75% of kids between 10 and 18 are opposed to mobile ads.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

Hein, Kenneth, “Dial ‘M’ for Marketing,” Brandweek, January 8, 2007.

9

Promoting Phone Services • AT&T launched new marketing campaign in 2005 after the merger g with SBC in order to rebrand the company • AT&T’s most aggressive campaign in its history Source: Integrated Marketing SUCCESS STORIES, B 2 B 2006

Promoting Phone Services AT&T • Examples were huge billboard on New Year's Eve in Times Square or an online roadblock • Uses live programming und TV spots at big events, such as Super Bowl or the Academy Awards Source: Integrated Marketing SUCCESS STORIES, B 2 B 2006

Promoting Phone Services • Campaigns included broadcast, online, print and outdoor • Important for AT&T to have unexpected media elements in their campaigns Source: Integrated Marketing SUCCESS STORIES, B 2 B 2006

Promoting Phone Services • More than 3 M consumers signed up for phone service provided by cable company until Sept. 2006 • Phone service companies, such as AT&T, Verizon and Qwest are trying to hold customers with marketing campaigns Source: Telcos, cable trade bruising barbs in spots, Advertising Age 2006

10

Promoting Phone Services • Phone service companies doubt safety of cable phone services in case of an emergency in ad campaigns • AT&T and Verizon spent $2.1 B in first half 2006 for ad campaigns Source: Telcos, cable trade bruising barbs in spots, Advertising Age 2006

VoIP Advertisement Vonage • Vonage had $269.2 M in sales in 2005 and a market share of 21.7% in the U.S. in 2006 • It spend $243.3 M on advertisement in 2005, which means that almost all if its revenues flow into marketing campaigns Source: Verizon's VoIP Offensive, Business Week 2005; Skype's market share halves ZDNet 2006

Promoting Phone Services • AT&T started to promote its cable phone services in 2000 • Usedd direct di mail il andd telemarketing for their campaigns Source:AT&T PROMOTES CABLE VOICE SERVICE, Interactive Week 2000

VoIP Advertisement Vonage • Vonage will spend $360 M to $380 M on marketingg in 2006, which is an increase of 50% from 2005 Source: Verizon's VoIP Offensive, Business Week 2005

11

VoIP Advertisement Vonage • Vonage earns $27 a month per line in 2005 • In comparison i it i spent $221.35 on marketing a month per line in 2005, which is factor of over 8 Source: Verizon's VoIP Offensive, Business Week 2005

VoIP Advertisement Vonage • Vonage has large TV, web page and print budget targeting the mass market k t

Source: A Tale of Two Marketers, CRMToday 2006

VoIP Advertisement Vonage nd • In the 2 quarter 2006 Vonage even spent $239 a month per line for every new customer, earning $27.70 which is a factor of 8.6 Source: Customer loss hits Vonage, Financial Times 2006

VoIP Advertisement Skype • Skype, the 2nd largest VoIP provider in the U.S. with a market share of 14.4% 14 4% in 2006, 2006 has a different approach than Vonage • Use mainly viral marketing Source: Skype's market share halves, ZDNet 2006; A Tale of Two Marketers, CRMToday 2006

12

VoIP Advertisement Skype • No high marketing budget, but word of mouth marketing • VoIP service for free so that users are encouraged to get their friends in Source: A Tale of Two Marketers, CRMToday 2006

Promoting Broadband Services • Cable companies are promoting their broadband services • Emphasis E h i on low l prices i in i campaigns • In first three month often high discounts Source: The Price War For Broadband Is Heating Up, Wall Street Journal 2005

VoIP Advertisement Skype • Skype is marketing their services by using blogs and f forums, which hi h targets t t lead l d users instead of a mass market • Cheap way of advertisement Source: A Tale of Two Marketers, CRMToday 2006

Promoting Broadband Services • Marketing campaigns address special target groups • Special offers for consumers that switch from a competitor, for instance up to three month free broadband and video i Source: The Price War For Broadband Is Heating Up, Wall Street Journal 2005

13

• Number Portability

Number Portability • Since 2003 consumers have the right to keep their cell phone numbers when they change carriers • Some carriers are charging fee if customers wants to keep number Source: As Number Portability Nears, Business Week 20056

Australian Telecoms • Manufacturers have devoted special focus on young children, or “tweens” aged between 6 and 13 • Aims to engage this young age group to develop brand loyalty for life Glazebrook, Kate and Downie, Christian, “Mobile phones and consumer kids,” The Australia Institute, No. 41, February 2007.

Australian Telecoms • Majority of tween mobile phone owners are motivated by status and aesthetics when purchasing a unit • 53% - phone brand is important • 62%- phone design is important • 61% - wants the latest model Glazebrook, Kate and Downie, Christian, “Mobile phones and consumer kids,” The Australia Institute, No. 41, February 2007.

14

UK Mobile Phone Operator • Gained 10% online market share via internet marketing • Cost of campaign: £1M • Tools: Banner advertising, search marketing, affiliate marketing http://www.coastdigital.co.uk/portfolio/mobile-phone-operator.cfm

UK Mobile Phone Operator • Also used paid search marketing and affiliate marketing

UK Mobile Phone Operator • Used an online marketing agency to implement campaign • Agency used specialist research tools to plan a range of online media activity, carefully mapping ad space purchases to the client’s target audience http://www.coastdigital.co.uk/portfolio/mobile-phone-operator.cfm

Strategic Marketing Options for

iPhone http://www.coastdigital.co.uk/portfolio/mobile-phone-operator.cfm

15

1. Continuous licensing of software to established handset vendors - enables Apple pp to enter a value chain different from the iPod market Fogg, Ian. “Analysing Apple’s iPod Mobile Phone Strategy Options.” Jupiter Research Analyst Weblogs. 30 October 2006.

3. Bypass current operators by launching one or more MVNOs - takes time and is a weak global strategy; will ill compete with ih customers-Operators who can use the iPhone unit Fogg, Ian. “Analysing Apple’s iPod Mobile Phone Strategy Options.” Jupiter Research Analyst Weblogs. 30 October 2006.

2. Develop own iPod mobile phone handset and sell through mobile operators - exploit image as an innovative d i designer off devices d i andd revive i stalled markets previous device makers were not able to develop successfully Fogg, Ian. “Analysing Apple’s iPod Mobile Phone Strategy Options.” Jupiter Research Analyst Weblogs. 30 October 2006.

4. Sell iPod mobile phone in retail - consumers slot an existing SIM to activate the device instead of purchasing a subsidized mobile phone due to contract requirements Fogg, Ian. “Analysing Apple’s iPod Mobile Phone Strategy Options.” Jupiter Research Analyst Weblogs. 30 October 2006.

16

Reliable packages • Telecoms aggressive promotional campaigns of services i that th t appear to t offer ff savings.

Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

Reliable packages • Necessary to read the fine print before signing up, as many of the bundled p packages g either expire p after a short introductory period, are just available online or not include equipment rental costs. Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

“What appears to be a great deal might at the end of the day cost you more than individual services ((…)) It becomes veryy difficult ff for f consumers to decipher what they're paying.” --Jeannine Kenney, advocacy analyst at Consumers Union. Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

17

Reliable packages • Packages services are not new, but their aggressive manners after some movements in the telecom market as the recent merger of SBC and AT&T, the entrance of Time Warner Cable into the Los Angeles market and the introduction of digital phone service. Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

Reliable packages • Internet phone space: Customers get unlimited local and long distance calls for $150/month from AT&T vs. vs $25/month from Vonage (although the customer still has to pay for an Internet connection). Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

Reliable packages • This aggressive conditions are spreading since telecoms face plenty of independents competing for customers in all categories. Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

“You tolerate an occasional issue with Vonage, and you get g enormous cost savings.” -- Jonathon Fishman, founder of Ben's Ranch, a personal technology company in Santa Monica that makes house calls

Barbara Correa, Telecomfused? Do packages save a bundle?, The Daily News of Los Angeles, Valley Edition, February 2007

18

Official aid to promote telecom

Official aid to promote telecom

• Governor Arnold Schwarzenegger has eliminated fees for installing high-speed Internet conduits along state highways.

• Key to promote broadband access in rural areas.

John Hill, State nixes fee on telecom firms' work near highways, Ventura County Star (California), January 2007

Official aid to promote telecom • The amount of money at stake right now is a mere $108,000 in annual fees for about three miles of cable laid along California's freeways (out of a $131 billion state budget). John Hill, State nixes fee on telecom firms' work near highways, Ventura County Star (California), January 2007

John Hill, State nixes fee on telecom firms' work near highways, Ventura County Star (California), January 2007

Official aid to promote telecom • But those revenues could be considerably higher, since the state is to develop a major highway building program and telephone companies are expected to install more fiber-optic lines as now they can also provide cable television service. John Hill, State nixes fee on telecom firms' work near highways, Ventura County Star (California) January 2007

19

Official aid to promote telecom • However, critics argue that the state should have at least demanded a commitment to lay cable in rural areas.

John Hill, State nixes fee on telecom firms' work near highways, Ventura County Star (California), January 2007

New marketing for 4G • 3G has not fulfilled the expectations of vendors, operators nor customers. • After billions spent on 3G licenses, implementation of technology more difficult than expected. Telecom Vendors Say 3G Disappointed, Promote Next Generation, Dow Jones Newswires, Feb 07

New marketing for 4G • 3G networks are not as fast as PCs and users really seek to get in their phones what they already h have in i their h i computers. • The solution is already there: 4G (including HSPA, WiMAX or LTE).

New marketing for 4G • The problem: content providers and consumers don't care about the technology, but about speed. • Urgent to invest not only in 4G networks, but before, and most important, in promoting this new technology.

Telecom Vendors Say 3G Disappointed, Promote Next Generation, Dow Jones Newswires, Feb 07

Telecom Vendors Say 3G Disappointed, Promote Next Generation, Dow Jones Newswires, Feb 07

20

Unreliable promotions

Unreliable promotions

• Saatchi & Saatchi telecom in New Zealand ads to send the winner of a competition into space last summer.

• The Advertising Standards Authority (ASA) held a complaint about the space trip promotion, as the winner would be sent only to the stratosphere.

Martha McKenzie-Minifie, Telecom ads crash to Earth as space promotion hits trouble, June 2006

Martha McKenzie-Minifie, Telecom ads crash to Earth as space promotion hits trouble, June 2006

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10385311

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10385311

Unreliable promotions • A voluntary code bans ads misleading or deceiving consumers. • Obvious exaggeration allowed and not considered to be misleading.

Unreliable promotions • According to the ASA, “it was technically possible and not an unreal expectation for a consumer to believe that they would actually win a trip to space, as opposed to the upper atmosphere.”

Martha McKenzie-Minifie, Telecom ads crash to Earth as space promotion hits trouble, June 2006

Martha McKenzie-Minifie, Telecom ads crash to Earth as space promotion hits trouble, June 2006

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10385311

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10385311

21

Unreliable promotions • The ASA received 679 complaints last year and 267 of them were deemed serious enough to go before the board, like the Saatchi & Saatchi example.

Unreliable promotions • Softbank, the new Japanese mobile company, to correct advertisements d ti t which hi h may mislead customers. (Softbank bought Vodafone's Japanese operations for 15 billion dollars last year and started a price war against industry leader NTT DoCoMo Inc. and secondranked KDDI Corp.)

Martha McKenzie-Minifie, Telecom ads crash to Earth as space promotion hits trouble, June 2006

http://www.nzherald.co.nz/section/3/story.cfm?c_id=3&objectid=10385311

Unreliable promotions • In full-page newspaper ads they offered free cell phone calls by printing "00 yen yen" in a large font, while in smaller print detailing conditions such as a limited time period. Japan orders Softbank Mobile to correct ads, Agence France Presse, December 2006

Japan orders Softbank Mobile to correct ads, Agence France Presse, December 2006

Unreliable promotions • The Fair Trade Commission not only advised Softbank but also NTT DoCoMo and KDDI, running i again i misleading i l di ads d on conditions for how discounts would carry on from month to month. Japan orders Softbank Mobile to correct ads, Agence France Presse, December 2006

22

NBA Endorsers • NBA international players as a new promoting tool for telecoms: celebrity endorsers/marketable stars. • NBA TV is in 66 countries. Travis E. Poling, Pitching 'round the world with the NBA, San Antonio Express-News, March 2007

NBA Endorsers • Tony Parker (San Antonio Spur) promotes Bouygues Telecom when he is in the basketball court.

Travis E. Poling, Pitching 'round the world with the NBA, San Antonio Express-News, March 2007

NBA Endorsers • Out of 83 international NBA players, 57 of them have 108 endorsement deals in the United States and their home countries.

Travis E. Poling, Pitching 'round the world with the NBA, San Antonio Express-News, March 2007

Marketing telecom/wireless • CAN SPAM Act and the Telephone Consumer Protection Act (TCPA) affect wireless promotion (rules for wireless e-mails, not for SMS messages). Joseph Lewczak, Right Side of the Law, March 2006 http://promomagazine.com/currentissue/marketing_right_side_law/

23

Marketing telecom/wireless

Marketing telecom/wireless

• Commercial e-mails can not be sent to anyone without the “express prior authorization” of the addressee.

• The TCPA bans automatic dialing and/or announcing devices or artificial/prerecorded messages to make calls to any wireless device, unless prior “express consent” to do so.

Joseph Lewczak, Right Side of the Law, March 2006 http://promomagazine.com/currentissue/marketing_right_side_law/

Joseph Lewczak, Right Side of the Law, March 2006 http://promomagazine.com/currentissue/marketing_right_side_law/

Marketing telecom/wireless

Marketing telecom/wireless

• A commercial promotion through text messages to an Internet domain on the FCC FCC'ss list needs to comply with the CAN SPAM Act.

• To avoid having to comply, limit the messages to those that are necessary for f th the promotion. ti

Joseph Lewczak, Right Side of the Law, March 2006 http://promomagazine.com/currentissue/marketing_right_side_law/

– Not any further marketing messages. Joseph Lewczak, Right Side of the Law, March 2006 http://promomagazine.com/currentissue/marketing_right_side_law/

24

Consumers and marketing campaigns

Consumers and marketing campaigns

• Annual study by The Mobile Marketing Association (MMA). • 1.800 consumers between 13 and 65 surveyed.

• The youth market is the most interested in engaging marketing campaigns (over 40%).

Study Concludes Consumers More Open to Participating in Mobile Marketing Campaigns, PrimeZone Media Network, February 2007

Consumers and marketing campaigns – Not only increasing acceptance of mobile marketing, but also the participation in marketing programs. – Participation increased from 8% in 2005 to 29% in 2006. Study Concludes Consumers More Open to Participating in Mobile Marketing Campaigns, PrimeZone Media Network, February 2007

Study Concludes Consumers More Open to Participating in Mobile Marketing Campaigns, PrimeZone Media Network, February 2007

Consumers and marketing campaigns • Consumers more and more dependant on their mobile phones, since can provide additional value over voice. Study Concludes Consumers More Open to Participating in Mobile Marketing Campaigns, PrimeZone Media Network, February 2007

25

Lauren Flaherty’s miracle • Lauren Flaherty, head of IBM’s global advertising, reinvented the image of this giant during the 90s. • Considered the guru of marketing applied to telecommunications after her performance in IBM. The big blue blueprint, B2B Marketing Magazine, October 2006

Lauren Flaherty’s miracle • When she got to IBM the main challenge was to rethink the marketing strategy of the global brand (featured as Tyrannosaurus Rex on the cover of Fortune magazine). The big blue blueprint, B2B Marketing Magazine, October 2006

Lauren Flaherty’s miracle • Has recently moved on to telecoms specialist Nortel, asked to provide a similar marketing-led corporate renaissance. The big blue blueprint, B2B Marketing Magazine, October 2006

Lauren Flaherty’s miracle • However, she headed a market-leading position through a whole new marketing pattern. • The key of IBM’s transformation was its reemergence as a services

The big blue blueprint, B2B Marketing Magazine, October 2006

26

Sprint new strategy • Sprint Nextel Corp. to review its whole marketing campaign. • Sprint pulls the plug on its current marketing strategy, saying it needs a fresher approach to address growing competition. Jennifer Mann, Sprint seeks a fresh marketing strategy, The Kansas City Star, Jan 07

Sprint new strategy • TBWA (for consumer advertising) was Nextel's agency and Publicis (for business to business) was Sprint's agency when the two companies merged in 2005. Jennifer Mann, Sprint seeks a fresh marketing strategy, The Kansas City Star, Jan 07

Sprint new strategy “One-and-a-half years postmerger, we need some strategies p that address the competitiveness in the industry.” –Mary Nell Westbrook, Sprint spokeswoman.

Jennifer Mann, Sprint seeks a fresh marketing strategy, The Kansas City Star, Jan 07

• The competitive telecom industry spent $6.8 billion, up 13 8 percent before last 13.8 summer, but still need to develop a brand identity. Jennifer Mann, Sprint seeks a fresh marketing strategy, The Kansas City Star, Jan 07

27

Sprint new strategy • Sprint tried with different advertising pitches: before signing up Livingston, the company used actor Brian Baker.

Sprint new strategy • One of the main strengths of the company was the clarity of its network network.

– He became kind of a cell phone superhero, assuring Sprint customers that the company would be there for them. Jennifer Mann, Sprint seeks a fresh marketing strategy, The Kansas City Star, Jan 07

Jennifer Mann, Sprint seeks a fresh marketing strategy, The Kansas City Star, Jan 07

Lections from the Middle East

Lections from the Middle East

• By 2008, 89% of the brands will use text and multimedia messaging to reach their audience as a marketing tool in the world.

• This kind of so-called “below-the-line marketing” provides measurable results that help marketers to prove the value of their campaigns.

Customer intimacy will be key differentiator for Middle East telecoms market, Sep 06 http://www.ameinfo.com/95264.html

Customer intimacy will be key differentiator for Middle East telecoms market, Sep 06 http://www.ameinfo.com/95264.html

28

Approaching customers • So-called “build it and they will come” mentality has to be turn on to a niche marketing and customer care driven approach in telecom business. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers • Moreover, once we know who they are, it is necessary to reward their loyalty. loyalty

Approaching customers • Use the great amount of data available within every company to create business intelligence. • Analyze which are the most profitable customers and understand how they behave. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

• Need to go on to a detailed analysis. “All carriers conduct profitability analysis (…) But the heritage of a lot of the systems creating profitability data is financial. These reports, or outputs, are highly summarized.” -- Susan McNeice, director of marketing for Vibrant Solutions.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

29

Approaching customers

Approaching customers

• Carriers need to make an extra effort to encourage internal relationships so they can better understand overall usage and overall costs.

• Carriers fail to understand customers' relative value and offer every consumer essentially the same subsidies.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers • “They've given away all of their promotional dollars just to win the customer (…) Instead of viewing i i follow-on f ll promotions i and free trials and loyalty tactics, they are vilified as revenue cannibals”. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers • Customer churn is one of the main problems all carriers try to avoid but their problem is that they still don’t understand the reasons driving the high churn rates. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

30

Approaching customers • For example, adjusting all customers to personalized rates plans can reduce revenue in the short term but will combat those rates. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers

Approaching customers • Or selecting the right incentives to encourage old customers like free trials of customers, new services.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers

• The best way to discern which customers are most likely to churn is to use traditional billing and usage data to create profitability models.

• Segment customers demographically and analyze areas that don’t get involved most of the times in churn analysis.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

31

Approaching customers

Approaching customers

• The best way to get the root causes why customers leave their carriers is just to ask them why; something most of the companies barely do.

• Telecoms need to learn from other industries, like airlines and credit card companies, companies on how to deal with loyalty programs.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

“I will take a connection to fly United even if there's a non-stop on another airline, but my loyalty to my telecom provider is pretty l loose, andd no one is i trying i to come up with reasons for me to stay.” . -- Steve Bamberger, vice president of communications, media and utilities for Oracle Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers • Although everyday is easier to shift from one carrier to another and loyalty starts to be no more related with multi-service package, carriers put too much stock in triple play being the thing that keeps people around. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

32

Approaching customers

Approaching customers

• Acquire tools to understand changes in customer behavior as a response to promotional campaigns for instance.

• Need of constantly updated marketplace feedback to know whether a product is successful or not and understand if it is so for the reasons I thought it had to be successful.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Approaching customers

Approaching customers

• Satellite providers have recently started to make investments in real-time real time decisioning technology to sophisticate their operations, specially in the case of exclusive content like NFL Sunday Ticket.

• Sometimes, more than demographic data, experts prefer talking about thirdthird party data combined with the behavioral data already studied.

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

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Approaching customers • Only such a combined analysis can provide information about how different issues drive consumer behavior and motivations. Ed Finegold, Nothing Left to Analyze but the Customers Themselves, Billing World and OSS Today, October 2006

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