3 Biggest IoT Opportunities in Telco Marketing
In this new age of connectivity, telecom operators are struggling to keep up with the changes and the multitude of devices that today’s market brings. As a recent article in PwC points out, growth has come with friction: “in some cases, early digital initiatives have been scattershot, and many telecom companies have learned that they must take a more focused approach in determining which digital products and services to offer if they are to capture real opportunities in adjacent business and broader digital ecosystems.”
In an industry where business goals remain a moving target, how can B2B telecom marketers identify their most impactful areas of focus?
“Marketers must know what things are critical to their customer’s business and learn to think about customers in the way that customers think about themselves,” says Keith Tamboer, former Director of Marketing for cable and telecommunications at Dun & Bradstreet. “Marketers need to consider new sources of information and insight to create a vision of the things that can be connected to enable business processes that will unlock the IoT opportunity.”
The key is to prioritize the following 3 pillars of connectivity.
Redefined customer relationships
PwC explains that for many telcos, complex legacy architectures, products, and services are creating barriers for meaningful digital experiences. Adding to the challenge is the gap between network upgrade costs and profitability—especially in emerging markets, where revenue per user is low.
Telecommunications companies need to determine how to optimize revenues from different types of customers. But the answer isn’t to focus on making incremental improvements. Rather, PwC recommends that telecom companies redefine their customer relationships, altogether.
The crux of this perspective comes from the reality that “we live in an ever more connected world,” according to PwC. Known as the Internet of Things (IoT), the idea is that in the coming years, a variety of devices will soon be able to share data. Over time, as technology becomes less expensive, larger networks will begin to evolve.
Already, companies like AT&T and IBM are partnering to develop a smart cities program, and Spanish Telefonica offers a product that lets individuals manage climate and lighting in rooms and office buildings from one central command center. In the U.K, Orange, Coca-Cola, and Nespresso have joined forces to launch a machine-to-machine (M2M) communications system. Meanwhile, in India Bharti Airtel is working with the State Bank of India to create mobile apps that would reach millions of people who don’t have access to banks.
The bottom line is that telcos, from both a B2B and B2C perspective, have a much different role to play in their customers’ lives than ever before. Thanks to new ecosystems of connected devices, new user bases and monetization opportunities are on the horizon. To come out ahead as frontrunners in the market, companies reimagine their customer relationships from the ground-up. Marketing leaders can lead this charge by reimagining their positions in the market and using buyer data to uncover untapped growth opportunities. The process begins with developing a cohesive customer picture.
Building a true ecosystem
In a recent telecommunications industry report, Deloitte pointed out that the future of telecommunications will be in strategic partnerships: “integration with key players in industries such as retail, automotive, or healthcare is a way for carriers to expand their businesses, and do so in a way that is timely and less risky.” By joining forces with companies in other industries, telecom leaders can increase their time to market with new initiatives and seamlessly expand into new areas.
Consider the growing mobile payments space, as an example. Between 2014 and 2015, there was a close to fourfold increase in the use of this technology. And with more handsets being equipped with Near Field Communication (NFC) chips, businesses ranging from gas stations to grocery stores and coffee shops will be redefining how companies interact with their customers at the point of sale. Visa, Honda, and Ford, for instance, are joining forces with Visa to turn cars into one-touch payment systems.
Meanwhile, according to Deloitte, 2016 is a year that will likely see “heavy momentum toward implementation of the next generation of wireless network technologies such as 5G, which should move from the lab to field trials, despite mass-market rollout still being several years away.” With these new capabilities, even more opportunities for integration and new product development will continue to emerge.
Given this evolution that is likely to take place, what will be the role of telecom companies in the future? As connectivity redefines customer and partner relationships, marketing leaders will offer invaluable perspective in answering this question. The key is to redefine telecom’s unique role in up-and-coming ecosystems of connected devices. Marketers, with a birdseye view into the telecom landscape and the flow of user data, are in a unique position to establish this perspective.
Becoming data command centers
As telcos redefine their customer relationships and build ecosystems of connected devices, new opportunities will emerge to package and sell data. For instance, Verizon, Sprint, Telefonica, and other carriers are already partnering with firms like SAP, IBM, HP, and AirSage to “manage, package, and sell various levels of data to marketers and other clients,” according to AdAge. For instance, one U.K. grocer is using cell phone carrier data to better predict their customers’ buying behaviors such as where store visitors go following their shopping trips, in addition to the sites that they last visited on mobile browsers.
As the example above reveals, telcos are in a unique position to collect and synthesize data in creative ways. With a direct lens into individual buyer behavior, telcos are quickly becoming command centers for information that was previously impossible to surface. SAP Consumer Insight 365, for instance, “ingests regularly updated data representing as many as 300 cell phone events per day for each of the 20 million to 25 million mobile subscribers.”
With this type of data collection and analysis in its infancy, telcos are navigating extreme ambiguity. How can companies turn this insight into action? What types of companies would be interested in telco data? How can companies balance privacy concerns with strategic goals? Given that the global market for telco data is worth $24.1 billion, “on its way to $79 billion in 2020” according to 451 Research, it will be essential for marketing leaders to explore these questions in depth.
From redefining their value propositions, building ecosystems of connected devices, and transforming passive data into strategic assets, the new terrain of telco marketing is an exercise in storytelling. When it comes to preparing for the future, uncertainty is the new norm. Telco marketers can prepare by bringing new, data-driven value propositions and brand stories to the market. In essence, the line between new product development will continue to diminish, with a clear opportunity for CMOs to bring structure to ambiguity.