Overcoming the Telecom Hurdle: Building on a Legacy Through Digital Transformation
The B2B telecom industry is unique. On one hand, it provides a service that enables the use of one of the business world’s most indispensable commodities – the telephone. As mobile data consumption continues to accelerate YoY, growth of the B2B market is expected to be four times greater than that of the consumer market by the end of 2019, presenting a range of opportunities for telecom providers.
At the same time, this hundred-year-old industry – which is both saturated and heavily regulated already – is now facing increasing pressures on margins, and the demand for data, coupled with addressable IT services and and OTT services such as VOIP calling, is shifting the dynamics of the B2B telecom ecosystem faster than ever. This means legacy providers are forced to find new ways of engaging with their business audience.
So, in an industry that operates across each and every vertical, let’s take a look at the current challenges telecom providers are facing and the ways in which sales and marketing teams can overcome them to build better relationships with their customers and maintain their legacy brand.
An uphill battle
Saturation shifts revenue stream focus: The mainstream adoption of connected mobile devices and VOIP technology in the nineties presented businesses with a new way of communicating with colleagues and customers, and at one time created a brand-new customer base for legacy providers. However, as the market has become increasingly saturated, telecom providers are now focusing on customer retention, via contract renewals, up-selling or cross-selling products and services, rather than relying on revenue from new business.
Narrowing margins: Arguably the toughest challenge currently facing the industry is the pressure placed on providers to reduce margins. Investment in wireless networks, in response to demand for mobile data, has kept the capital spend to revenue ratio worryingly high for many providers (around 15% according to McKinsey), and sales and marketing teams are now beginning to feel the knock-on effects as they strive to retain their competitive edge.
A congested marketplace: Another issue for legacy telecom providers is the emergence of a new wave of market entrants over the past decade, who have been quick to respond to increasing market expectations by offering low-cost cloud telecom services, as well as commoditizing services such as VOIP systems or PBXs (Private Branch Exchanges), both of which traditionally constitute core offerings for legacy providers. As a result, the diminishing revenue streams from these services are forcing sales and marketing teams to become more efficient and offer increased value through bundled services and more personalized pricing strategies.
Shifting gear to B2B with digital transformation
We’re already seeing significant industry developments marking the shift to B2B, with AT&T’s business division now generating $69B in revenue compared to $51B in consumer revenue. In fact, according to Accenture, enterprise revenue now constitutes around a third of total revenue in the telecom market. And the key enabler in this shift? Digital transformation.
The role of B2B sales and marketing teams is complex as they compete to push out bundled product offerings – comprising a combination of wireline, cable or data services – to multiple business segments. As a recent EY global telecommunications report suggests, “Process automation leads the list of long-term IT enablers [and] will define the telco of the future”. In order to keep up with the changing needs and priorities of IT buyers as they source new telecom services, legacy providers are beginning to take advantage of automated platforms to consolidate systems, which, in turn, is enabling teams to drive productivity and efficiency to reach increasingly difficult revenue targets.
It’s no longer viable to manually leverage the wealth of disparate customer data sets that telecom providers hold by relying upon complex pivot tables that become out-of-date the minute they are created. By consolidating systems and gaining a more holistic view of customer data, sales and marketing teams can streamline the entire account review process and make more informed decisions prompted by by data-rich presentations – which can now be produced in minutes rather than days.
By becoming confident, knowledgeable, and trusted advisors, sales and marketing teams can now offer more value to existing customers and build longer-lasting relationships to optimize those all-important retention revenues.
So in an industry plagued by bureaucracy, saturation and increasingly fierce competition, only forward-thinking sales and marketing teams will edge ahead in the race to regain their foothold in the market. It’s time for legacy providers to embrace digital transformation and empower those teams to go the extra mile.