Sales and marketing practices in the wireless communications industry are substandard and could cause carriers worldwide to lose as much as a third of their revenues to new competitors over the next three years, according to a new global benchmarking study from Andersen Consulting.
For “Winning in the Corporate Market: Wireless Challenges for the Future,” Andersen surveyed the sales and marketing practices of 18 leading wireless providers in 14 countries worldwide and found that they frequently lag behind best practices in other industries, particularly in addressing the needs of large corporate customers.
“In the past, the wireless industry’s rapid growth allowed its sales force to focus simply on acquiring new accounts,” noted Ross MacDonald, a partner in Andersen’s Communications Industry Group.
“In the future, the sales force will instead need to focus on retaining corporate customers and developing the full value of corporate accounts,” he said.
According to Stuart Taylor, the senior manager who led the study, carriers have become victims of their own success.
“They haven’t established billing and customer care systems to handle the volume of business they’ve generated,” he said, much less develop flexible processes to meet emerging corporate needs.
Taylor points out that while cellular handsets and services have been sold on an individual basis for both the retail and corporate markets, organizations are starting to demand more accountability for their purchase.
“Wireless handsets are becoming essential. It used to be that an individual just bought one and put it on his expense account, but companies need to centralize that for cost control,” he said.
Carriers “don’t differentiate between the corporate user and the mass market user. There’s definitely money to be made in the mass market but they’ve been trying to serve them both the same way.”
And it’s a difference that makes a difference. The report notes that the average corporate customer generated revenues in excess of $1,800 last year while the average private user generated about $400. Plus corporate users are less prone to fraud and bad debts.
Taylor believes wireless carriers should start with better market segmentation and understanding of customer mobility needs that could lead to better product development and more sophisticated sales strategies.
“The corporate market is pretty well saturated. [Wireless carriers] need to expand on that with new services to increase airtime usage in a way that reduces competition on price,” Taylor said.
“Most carrier marketing programs are just pricing schemes. They’ve created in the user’s mind that it’s just a commodity product but now they need to differentiate,” he said.
If wireless carriers fail to upgrade their marketing practices for corporate accounts they may create an opportunity for non-telecommunications companies like IBM Corp. or American Express, which are more customer focused to develop business solutions, and which are platform independent, he said.
Wireless telecommunications is “an industry whose approach to sales and marketing is still relatively unsophisticated.
“In the next few years the industry will undergo a period of accelerated evolution as the most aggressive players move swiftly to capitalize on this window of opportunity. The high ground is there for the taking,” the report said.
