In the first of a new series of articles by telecoms writer Stewart Baines on telcos’ often unsuccessful marketing initiatives, we assess how mistakes can be avoided in addressing current B2B opportunities.
With a significant growth forecast in telco B2B revenues, effective marketing will be essential in helping telcos move up the stack and position them as partners of choice for tech services. Forrester research shows that 92% of B2B tech buyers start procurement with one vendor in mind. So in tech services, how do we encourage buyers to think of telco first?
Management consultants and industry analysts appear to have caught a dose of viral boosterism. Symptoms include predicting that the B2B telecoms sector is on the cusp of tapping into untold billions in net new revenues from enterprise AI, cybersecurity and Industry 4.0, and all they need is to move up the value chain.
Omdia says B2B already accounts for 40% of global telecoms revenues and that 80% of growth potential in the entire sector is from B2B. This is supported by GSMA Intelligence, which estimates the enterprise segment is growing faster than the consumer segment (5.6% vs 1.5%), and McKinsey believes telcos could see an additional US$160 billion in B2B revenue by 2028.
B2B is the big deal
After years of stalled growth and failure to move up the stack, the tide seems to be turning. And already one-third of telco B2B revenue is beyond connectivity, in value-added areas such as security, cloud and managed IT services. Telcos like TIM, BT, Swisscom, Orange and KPN significantly beat that.
The prize is tantalising. The decline in traditional connectivity has not been offset by growth in data and mobile. However, the tech services market (already significantly larger than the connectivity market) is growing at 10.5% annually, says consultants Oliver Wyman. Telcos that can successfully carve a niche in tech services have more growth potential than those that don’t.
McKinsey asked businesses what they thought of telcos and their capabilities. It found that 80% of decision makers see operators as “viable partners for products and services beyond core connectivity” and one-third believe B2B telcos should be a one-stop shop for tech and telecoms. This was consistent across small, medium and large business respondents.
Get in position
This is clearly good news for the sector, but telco marketers will need to work hard to convert this goodwill into revenue and telcos’ history of maximising new market potential is littered with failures from walled content gardens to music, video and apps.
Telcos have been trying to move beyond connectivity for two decades. Sometimes the new products and services disappear as soon as they arrive. Sometimes they have arrived too late, and the bandwagon has moved on.
Marketing has tried hard to position telcos as serious players in managed services in security, devices and cloud infrastructure, but has been plagued by organisational silos and engineering failures. As operators transform their back-office systems, customers will start to see smoother provisioning, fewer operational issues and new products coming to market quicker.
Marketing will then be able to position telcos as techcos without cognitive dissonance. Key to this will be shifting the balance of activities away from short-term activation tactics, which can be effective in selling simple connectivity, and towards long-term strategies such as brand building and thought-leadership.
Branding should set a consistent expectation so buyers know what you stand for before comparing features like footprint, capacity or number of CyberSocs. Emphasis could be placed on qualities that buyers are looking for, such as resilience, security, compliance, predictability, flexibility or sovereignty. Brand promises should be specific, provable and distinctive. And given the overpromises of the past, they need to be credible.
Thought-leadership is the advanced guard of branding. It helps you get your messages and expertise in front of potential audiences and explain your product or service offerings in ways buyers can relate to. It’s also essential to continue to invest in PR, analyst relations and the emerging field of generative engine optimisation (GEO a.k.a SEO for ChatGPT).
All these strategies play a part in creating ‘mental availability’. Forrester research shows that 92% of B2B tech buyers start the buying process with a shortlist in mind and 41% already have a single preferred vendor selected before formal evaluation begins.
This means we must start nurturing and influencing our future customers long before they know what they want.
In part 2, Stewart Baines will delve deeper into the impact of digital engagement and how it impacts telecoms sales and marketing.
Stewart Baines