Telecommunications companies face a challenge: growth in business-to-consumer (B2C) sales, the biggest revenue stream for most companies, is slowing. According to Bain & Company, the consumer market is only expected to grow at about 0.6% a year, barely enough to keep many telco revenues treading water.
This stagnation in B2C growth is increasingly forcing telecommunications players to look at business-to-business (B2B) opportunities, an area has traditionally played second fiddle to consumer sales. Compared to B2C, B2B offers considerable growth potential. Bain & Company believes the B2B telecommunications market is growing at around 2.6% a year.
Deloitte, meanwhile, estimates the global B2B telecoms market will have seen a 2% annual compound growth rate between 2010 and 2020, based on Gartner data from 2015. B2B IT services could grow twice as fast. Focusing on this market makes sense, but that doesn’t mean it’s easy. Deloitte warns that “to make the B2B value creation engine run you must transform the operations and build new capabilities.”
Adopting a new approach
Deloitte and Bain & Company both recommend that telcos should carry out strategic realignments of their business to capture the B2B opportunity. For example, Bain & Company says it is important to strengthen your core B2B offering, which will often be connectivity, and complement it with just one or two other capabilities with strong growth potential.
These might include the delivery of IT or cloud services, for example. But keep it lean. When telcos target the B2B market, says the firm, “they often diffuse their efforts with too many projects in too many IT adjacencies.”
Another piece of advice espoused by both consultancies is to create modular offerings that minimise the amount of customisation needed per client. “Next to cultural benefits for the organisation, ‘productisation’ of the integrated portfolio enables standardised, scalable and sustainable B2B processes, organisations, leading to cost optimised IT stacks,” says Deloitte.
Marketing and communications
Alongside these product portfolio adjustments, you need to think carefully about how to approach B2B customers through your marketing and communications. The scattergun approach used for B2C campaigns, where you can aim to pick up thousands of new customers by spending heavily on broadcast, press or online media, simply won’t work for B2B.
The main reason for this is that in many B2B segments there simply aren’t that many customers to be had. Even a global telco might be lucky to have more than a few dozen large enterprise customers per vertical. Furthermore, these enterprise customers are highly unlikely to respond to undifferentiated marketing approaches. If your telecommunications budget is worth millions, you’ll want your telco supplier to treat you like royalty.
The best way to achieve this is through account-based marketing (ABM).
The benefits of ABM
HubSpot defines ABM as “a highly focused business strategy in which a marketing team treats an individual prospect or customer like its very own market.”
In practice, this means creating campaigns aimed at a single prospect rather than a whole audience. In ABM, marketing and sales teams are typically closely aligned so that knowledge of a particular client or account can be rapidly integrated into the marketing and communications they receive.
The power of ABM has been known for many years. Back in 2003, for example, the US defence technology contractor Northrop Grumman used ABM to get under the skin of the Commonwealth of Virginia’s Information Technologies Agency and win a $2 billion contract.
A new ABM model
And by 2015, according to Meaghan Sullivan, head of General Business and Global Channels at SAP, 92% of companies appreciated the value of ABM and 83% of those using it were expecting to use it more. By then, says Sullivan, a new model of ABM was beginning to emerge, integrating features such as social tools, big data and connected sales forces.
“In the past, the solutions-based sales model targeted a single symptom based on what your company can do,” she says. “ABM turns that process around and starts with what the customer needs to achieve their goals.”
For Bain & Company, this process is key for telco attempts to conquer the B2B market. “Successful telcos develop more detailed pictures of customers’ needs, and then use those insights to segment customers more effectively,” says the management consultancy.
A different type of customer
One of the reasons you need to know a lot about your B2B clients is that they, too, are well informed, “not only about offers from their own telcos but also about competitors as well,” says Bain & Company. “Most telcos will need to develop new capabilities to win in this environment, including content marketing that promotes thought leadership and a ‘smart view’ of customers.”
The good news is that many of the new capabilities you need might not be that hard to deploy. Tabitha Adams, marketing technology solutions architect at the consulting firm Slalom, says a successful ABM programme needs just five ingredients: data, content, tactics, personalisation and sales and marketing alignment.
Looking at each in turn:
- Data has to be as clean and up to date as possible.
- Content needs to be highly relevant to the B2B audience concerned.
- Tactics need to encompass all relevant channels, from email and social media to telemarketing.
- Personalisation needs to be baked into communications to create one-to-one engagement.
- Sales and marketing alignment must be assured so that intelligence is fully shared across both functions.
The value of external support
None of these is beyond the reach of a telco marketing team. However, putting the right pieces in place will likely require a degree of restructuring, not to mention a new mindset. In particular, telco marketing teams that have a strong B2C focus might benefit from specialist consultancy or support from external agencies.
Such support can help not only in the creation of appropriate ABM strategies but also in resolving issues such as which technology platforms can offer greatest benefit to B2B marketing teams. Most importantly, external support can help get your ABM programme up and running quickly. And in a world where your biggest B2B targets are already being courted by your rivals, it pays not to linger.