Among the main challenges facing the global telecom industry are that customers do not love the services, according to former Vodafone CEO Vittorio Colao.
In part, he believes that is caused by a lack of a genuine customer orientation on the part of service providers.
His view is simply that if customers truly love your services, that drives value, and value leads to higher revenues and profits.
“By and large, as an industry we have failed to create enough trust in our brands and a sufficient sense of loyalty and appreciation for our products and services, despite the fact that they are essential for people’s lives,” Colao says. “Because of this lack of trust, the telco industry has not fully monetized its large investments.”
“Be it because of roaming charges, hidden price increases, sloppy customer care, overpromising of connection speeds, or whatever else, I don’t know a telco in the world that has really been able to create an outstanding level of personal relationship and affection,” he says.
That is a generic problem for suppliers of any intangible service, one might argue. Selling the invisible or intangible always is difficult.
Some products are intangible, there being no way the buyer actually can determine “quality” in any direct way, until the services are provided. Legal, medical, financial or other services provide good examples.
Marketing advice, crisis management and other services also are very hard for buyers to evaluate, in advance of purchase. There is no physical object to inspect, so a potential buyer has to try and determine value some other way.
That is not to excuse service provider failings, but all communications and connectivity services are intangible products, for which a buyer has no way to determine quality in advance of purchase, and no way to compare quality to other potential buyers except to “try them.”
There are some obvious consequences. If a buyer cannot independently determine value or quality, buyers might be prone to distrusting quality claims.
Quite often, customers have no way of evaluating experience improvements, including faster download speeds, for example. In such cases, service providers have to communicate that something has changed, and that “better performance, leading to better experience, now is being provided.
As contentious as some seem to find AT&T’s branding of its advanced 4G service as “5G-E,” that is one way of signaling to customers that some “new and better” feature is available.
Backing up Colao’s views, service providers tend to score low on consumer satisfaction surveys.
People might know they have no way of making judgments about communications services as they can with physical products.
And when “value” cannot be determined, it is hard to determine whether “price” is right, either.
Make it personal is one typical bit of advice for sellers of intangible services. In other words, explain “how it makes your life better.” “Show the benefits” (outcomes) is another way to sell an intangible product. When even that is tough, sell “peace of mind.”
That's why credentials, furniture, street address, references and "experience" become proxies for value and competence where an intangible product is concerned. Even tangible products such as fashion items or vacation resorts have a huge and similar problem, namely creating a brand or mystique that helps potential buyers evaluate the product, which either is a means to another end, or an "experience."
Trust also is important for selling intangibles. As there is nothing tangible to show customers, customers have to trust their suppliers. And though it would be hard to show a direct correlation, one element that promotes trust might be that lots of other customers have chosen a particular supplier. So market share becomes a proxy for value and a reason for greater trust.
Calao, most would agree, is correct in his basic assessment. What remains to be done is to figure out how to do a better job of being customer focused, at a time when revenues, profits are under pressure and legacy services face declining demand.
In the U.S. market, perhaps Comcast has been doing a better job than most at wrapping more value around its connectivity products, especially the Wi-Fi functionality (hotspot access and management features; voice interface for video services; internet access speed boosts).
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