Monica Zlotogorski channels Steve Jobs as she takes out her 'divining rods' to locate those elusive new telecoms revenue streams.
A dowser at work, from Pierre le Brun, Histoire critique des pratiques superstitieuses, (Jean-Frederic Bernard, 1733–1736)
“You‘ve got to start with the customer experience and work back toward the technology - not the other way around," Steve Jobs
Apparently, Job’s sentiments don’t resonate too well with the telecoms industry because, despite the customer experience buzz, our industry consistently puts technology (network) first. The customer is never king.
This reminds me of a recent experience at a mobile service provider’s retail store. I was standing in line waiting my turn. Right in front of me, there was a mom who was trying to get a new phone for her teenage daughter (probably around 12-14 years old). I couldn’t resist the temptation to listen to the conversation that they were having with the sales person.
“And you can use Facebook as much as you want from your phone,” was the pitch coming from the sales person, who was probably 25-26 years old. The teenage girl turned around and with a very unhappy expression on her face said to her mom, “but mom, Facebook is not my thing, it’s for old people, tell her mom!” Imagine that, a 25-26 year old being too “old” to understand the needs of a 12-14 year old.
But, wait a minute! What? Teenagers are supposed to love Facebook, right? Everyone in telecoms knows that. Every single marketing PowerPoint presentation I’ve seen has a Facebook logo and happy teenagers.
Well, we should probably rewrite those PowerPoint slides now – because apparently Facebook isn’t cool among teenagers anymore. This is just one of the many myths that are going around in our industry that everyone accepts as true, even when facts show otherwise.
Of course, (almost) nobody bothers to listen to what customers truly need or want, or watch their behavior, because we, in telecoms, are a bunch of very smart technology experts that know better than anyone else. And even when we pay attention to what customers want and need we prefer to ignore it, or reinterpret it, because it doesn’t fit with our notion of “how things should be.”
Consequently, that’s how we end up assuming that everyone would behave, desire or need whatever is determined by a 30-40 year old male with an engineering degree working in telecoms. And based on those assumptions we’ve been developing a whole bunch of business models and offerings for a customer base that we don’t know and don’t listen to. Yes, we do talk (a lot) about customer experience (and big data for customer experience purposes), but it’s more of a “let’s talk about it, so we can feel good” exercise, as opposed to really listening to the customer.
The funny (or sad) part of it is that most of the basic myths out there don’t even require any big data investments. One could clearly “kill” many of those very basic “legends” with a click of a button and a simple Internet search. If we don’t understand our customers first, how are we going to successfully develop new business models and sell to them?
So let’s debunk some basic myths.
Ladies and gentlemen, yes, it’s true. Facebook is not about a whole bunch of teenagers chatting with their friends. In fact, nearly two-thirds of people aged 50-64 and 43% of those aged 65+ in the US are now on Facebook, while teenagers are moving away from it to avoid their parents. “Although I do have a Facebook, none of my other friends do. My friends just thought it was a waste of time. I decided to get a Facebook just to see what it was all about. I soon discovered that Facebook is useless without friends. My only friend is, like, my grandma,” said a 13 year old. “Teens are followers. That’s just what we are. If all my friends are getting this cool new thing called Snapchat, I want it, too!”
If Facebook is not invincible, neither are mobile phones.
According to a recent study by Ofcom in the UK, “for the first time since the survey began in 2005, the overall number of children aged 5-15 owning a mobile phone has fallen – from 49% last year to 43% in 2013.” The Ofcom study clearly shows that even the “youth” segment is not a single demographic, with younger and older children having distinctly different priorities concerning connected devices. “Children’s preference for internet-enabled devices reflects changes in how younger people are going online. While the usability of tablets appears to meet younger children’s entertainment needs.”
Furthermore, “traditional text messaging (SMS) remains a highly popular way of communicating for youngsters, especially those aged 12-15. These teenagers send on average 255 text messages per week, up from 193 last year.” What? SMS is not necessarily dead? That’s right, and I’m not done yet.
Apparently, not everyone wants to get the latest smartphone model. In effect, many consumers are moving “backwards” (technologically speaking), not forwards. Take the example of Timothy Kim, who went back to an old cellphone (a $20 Motorola Razr) to substitute his smartphone when it broke in order to help improve his social and marriage life. “I no longer stare at my phone during dinner time or bedtime,” said Mr. Kim. “I converse more when hanging out with my friends. And my wife is a lot happier. (Happy wife, happy life.)” Mr. Kim is now likely to check Twitter less, spends less money on his mobile plan, feels more secure and has more battery life too. “These days, you are lucky if your smartphone lasts throughout your workday. But this 7-year old Razr will last up to four days without charging!”
So there you have it, not all men consume in the same manner and have the same needs and wants either. But let’s go even further. CSPs don’t understand women either – and that’s half of their market!
A recent article published by the Atlantic highlighted the role of women in the consumption of technology: “We had this fascination with what the youths are doing and this notion that technology was being used by men. The data just didn’t reflect that. When you look the globe over, women are 44 to 45 percent of the world’s Internet users. They spend more time online than men—17 percent more a month. If you look at social-networking sites on a global scale, women are the vast majority on most sites, with the exception of LinkedIn. Facebook is an extension of social communication, which has often been the realm of women.
Same with things like Skype, whose average user is 20-to-30-something, college educated, female If you look across the sale of e-readers, those are vastly driven by women. The same with downloading books, which is a lucrative space right now. If you look at smartphone data, again, women are about half the users on the planet, but spend more time talking, texting, and using location-based services than their male counterparts. When I put all that together, I had this moment of going, What? What is it that makes people think we’re not using the technology?"
Not long ago, I wrote: “Business strategy and technology developments in our industry are being determined by a whole bunch of men thinking that people want to consume communications services just like they do… Market data shows otherwise, but they don’t seem to want to pay attention. Do we need a better explanation about why business models are not working, how we are moving to a potential dumb pipe future or why ARPU is going down? Apparently, we all want to consume what men want to consume and how they want to consume it. But in reality, we all use communications services differently, so why are things being developed based on the needs and wants of just a minority?"
It should have been obvious. A business strategy should always start from the customer. But that’s not how it’s done in telecoms.
The price that companies pay for starting backwards is quite high. So, what happens when you develop a product or service when you don’t understand your customers? Let’s take a powerful, non-telecoms industry example to illustrate this point (it just makes it easier to make the point).
What happened when Gillette tested its Vector razor on MIT students of Indian descent in Massachusetts rather than on India residents to avoid the costly trip abroad? Unlike men in India, the MIT students had running water, and “Indian men have thicker hair and a higher hair density than their American counterparts. Adding to that, they often shave less frequently than American men, so they wind up shaving longer beards.”
Gillette eventually fixed the problem and learned a good lesson. “That's another 'a-ha' moment,’ Alberto Carvalho, vice president, global Gillette, a unit of P&G. ‘That taught us the importance that you really need to go where your consumers are, not just to talk to them, but observe and spend time with them to gather the key insight.”
That’s precisely the core problem in our industry. We develop solutions that are based on the limited life experience and knowledge of a small group of men working from their office cubicles in telecoms, who don’t bother to understand how everyone else thinks, what they need and/or want, and what they are willing to consume and pay for. Such limited views have determined the different paths to innovation in the past decades, both in terms of business models and technology developments. However, the issues that our industry are confronting are far from technological and they will not get solved with more technology first. Otherwise, we’ll keep building and developing more and more “things” (networks, systems, processes, etc) for the wrong reasons.
Know your customers first, learn what they do, want and desire, how they consume things, what problems they are trying to solve. Then, figure out ways to serve those wants and needs, and then, enable the technology to make it happen. It should be obvious, right? But apparently it’s not.
That’s why everyone in telecoms is still using a Facebook logo and happy teenage kids in every PowerPoint slide thinking that it’s cool, while youths are moving away from it in droves. Or there’s the husband that switches a smart phone for a dumb one. Or we fail to discover that women are more technology savvy than we give them credit for. We are slow to move forward because we stay stuck in an outdated reality. In the meantime, customers have moved on and other players are able to respond more quickly to customers’ needs and wants (because they base their strategies on precisely the customer) and thereby gain advantage, leaving CSPs trailing a long way behind.
Yes, there are a lot of very smart engineers and software people in telecoms, but that doesn’t mean we know it all. Customers do know best, and if we truly listen, then we would be able to prevent bad investments in CAPEX, we would be able to reduce OPEX by creating more efficient organizations that are truly customer focused and we would be able to come up with better and faster business models and products that customers are willing to pay for, or retire those business models and products that customer don’t like or want a lot faster. That’s why everything needs to start with the customer. That’s how you make money. There’s no other way.
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