Porter’s Place A Marketing Strategy Blog by Dana Porter, Head of Amdocs Global Marketing

I have always loved celebrating birthdays. Should I be embarrassed to admit that I was notorious among my friends for leaving them little notes stating exactly how many days were left until my b-day? Maybe this is why I am especially excited about Amdocs’ 30^th birthday celebration. In today’s ever-changing world, turning 30 is a significant milestone (at least that is what friends have told me).

As part of the planning of this milestone, Amdocs Global Marketing has strategically repositioned our company. We want to ensure that the market knows not only WHAT we do, but also WHO we are. Our new brand promise – Embrace Challenge, Experience Success – perfectly captures the spirit of a company that takes on the most complex challenges and promises success.

Thinking about our brand led me to consider the brands of service providers. The most notable brands manage to memorably convey a company’s main mission and attributes. Virgin Mobile USA, for example, has capitalized on its media business and created a communications company that is young, hip and cool. Its promotions, phones and bundles are all about helping its customers feel youthful. Virgin offers popular sponsored events, such as Lady Gaga’s Monster Ball Tour, and a streaming music channel that is “actively stalking your cultural obsessions.”

Vodafone took a different angle with its “Power to You” slogan and campaign, which addressed customers’ tremendous frustration with network problems and outages during key moments in their lives by promising seamless, uninterrupted communications. Verizon Wireless’ brand is also network-focused, with special emphasis placed on having the “best network.” “Why do more than 80 million people trust Verizon Wireless to provide them excellent mobile service and support?”  They ask. “It’s the network.”

Elisa in Finland chose a path that clearly broadens their domain beyond core telephony – showing a clear focus on B2B, corporate information and communications technology (ICT) and online services. They are both a telecommunications company and an ICT service company that provides Finns with unique experiences while increasing the productivity of businesses.

Celebrating 30 Wonderful Years

Of course, there are many examples out there of good brands. Does a brand really matter? Almost everyone agrees that a strong brand is directly correlated to higher profitability. As noted in a recent Forbes article, “A strong brand protects your sales, improves your margins, and ensures your resilience. It’s a valuable asset – and, for some businesses, their most valuable asset.” Finding the best slogans and creative campaigns is just the first step – all marketing campaigns and offerings, as well as the company culture, must embody the brand and constantly reinforce it. More than anything else, your brand is your calling card. What does your company stand for? What do you want to be known for? What is the emotional connection or sense of belonging you are trying to create?

I originally intended to write this blog post about positive trends in 2012 much closer to January 1, but I was busy planning a big celebration.  I’m of course referring to Amdocs’ upcoming 30^th anniversary year (what did you think I meant?). Keep an eye on this space for more details …

And speaking of the future, here are four reasons from a born optimist for service providers to smile in 2012:

1. Innovation will flourish, in part due to operational efficiencies caused by the economic slowdown. This will be particularly felt in Europe and North America.

Finding reasons to smile ...

People often think of service provider innovation in terms of marketing, which is a key component, but economic slowdowns are also catalysts for the reinvention of operational models. BUYIN, the recently approved procurement joint venture between Deutsche Telekom and France Télécom Orange, is a great example of an innovative operational model. The targeted 1.3 billion Euros in combined savings could be a significant and much-needed change for both companies in terms of improving structural efficiencies.

Another example is Verizon Wireless acquiring a block of spectrum from Comcast, Time Warner Cable and Bright House Networks (another joint venture). They will access each other’s products, with the cable companies able to purchase wireless service wholesale from Verizon. Verizon, meanwhile, will be able to resell cable services. Service providers forgoing ownership of underlying networks and instead focusing on creating innovative and effective partnerships will make for a VERY interesting 2012.

 2. More devices mean more bandwidth and more monetization opportunities – improving the position of service providers.  

AT&T’s third quarter results show that roughly 75 percent of AT&T’s net adds on the network were for tablets and connected devices, such as automobile monitoring systems, security systems and other products emerging as new growth sources.

 And Rogers, a Canadian service provider, is now offering “Smart Home Automation.”  The move is apparently an attempt by Rogers to transition to new markets and generate additional revenue. The combination of Rogers’ cable and wireless networks will enable users to manage all sensors and cameras as part of a complete security system.

 New devices that impact our day-to-day lives will emerge in 2012, and I believe a significant portion of these will be managed by service providers.

3. There will be more choice for consumers and therefore more non-traditional opportunities to create a unique customer experience.

 Sky has rebranded Sky Mobile TV and Sky Player, its online platform, as “Sky Go.” This online platform enables subscribers to watch its channels on computers, mobile phones and tablet devices. The interesting part is the decision to also offer this service to non-Sky subscribers, which blurs the lines between Sky’s cable and media businesses and changes some of the fundamentals of these businesses.

 Sky is expected to leverage public WiFi platforms to “supercharge” the customer experience even further. Coupling access with content will create some surprising new models. During a period where content is king and freedom of choice is a given, we can expect to see more service providers challenging the established rules of the game.

 Another example is T-Mobile USA’s Bobsled voice application, which supports VoIP calling to telephone numbers for iOS and Android devices. This application is available on Google Android or Apple’s App Store for non-T-Mobile customers, too. If you can’t beat ‘em, join ‘em seems to be this carrier’s attitude towards OTT players such as Skype.

 4. Service providers take unique customer experiences to their own channels.

 A recent Telstra (Australia) campaign focused solely on the convenience of the ordering and set-up processes. “From today, you can now buy online and choose to collect your order from any Telstra Store of your choice… Plus, if you order a new mobile through this service, we will set up your phone for you on the spot.”

 Another example is the release of AT&T’s new API platform, which will enrich apps with AT&T core assets and capabilities, such as voice, SMS, mobile health services and location-based services. In addition, developers will be able to allow users to make payments in apps that will appear on their AT&T bill. Those capabilities, along with the HTML 5 cross-device feature, allow AT&T to offer a unique experience on its own channel, across all devices.

 Providers are trying to deliver a version of the Apple store experience.  In 2012, service providers will attempt to leverage their robust distribution channels, call centers and other processes to deliver a unique experience. Process innovation can be expected from service providers who are eager to compete effectively with Apple.

 Have a wonder 2012 everyone!  I look forward to seeing what’s in store for us!

* Special thanks to Eric Danis for his editorial assistance.

What do bloggers, militaries and fundraisers have in common? They are all constantly thinking about how to increase loyalty. We know this is also an issue that service providers are struggling with – 82 percent of them said in a recent survey that Amdocs conducted together with Informa Telecoms & Media that customer loyalty programs would be “very important” or “important” over the next five years to their companies’ strategies. But how can service providers increase customer loyalty? Their very perceptions of loyalty, and how to increase it, are quickly changing. To find out how, please read my latest post at RCR Wireless News. As always, comments are welcomed and appreciated, especially from loyal readers.

After YouTube’s recent announcement “that even more talented creators and original entertainment will soon join” the site, some commentators focused on the death of “amateur hour.” (Personally, I think there will always be room for homemade videos featuring cute cats and people spectacularly quitting their jobs).

Another satisfied YouTube viewer?

Perhaps more interesting for service providers than the addition of big names like Madonna, Jay-Z and ex-hoopster Shaquille O’Neal, is YouTube’s emphasis on grouping this new talent into channels. “These channels will have something for everyone, whether you’re a mom, a comedy fan, a sports nut, a music lover or a pop-culture maven … And for advertisers, these channels will represent a new way to engage and reach their global consumers,” wrote Robert Kyncl, global head of content partnerships at YouTube, on YouTube’s blog.

New Internet TV channels have continued to emerge, leading many analysts to speculate about the death of channel “push TV,” but I argued the opposite. I think there will always be a need for channels that allow us to lean back and immerse ourselves in content that is pushed to us.  If you think about the logic behind creating channels, the idea is that we do not always know exactly which content we want to consume, but we do know what genre we like (fashion, action, comedy, etc.). By providing original and professional content in a structured/“channeled” way and challenging the regular distribution channels, YouTube is hoping for new monetization models for Google (see the quote above about advertisers finding new ways to engage consumers).

YouTube is discovering what traditional TV knew all along – clever aggregation pays!

On the flip side, this announcement is likely to accelerate traditional TV’s move to becoming even more interactive. Many service providers have already ventured into a new TV experience that combines some form of interaction – such as Comcast, with their XFINITY social experience, or AT&T with their cross-channel U-verse offering, which allows consumers to follow their friends’ content.

What this announcement really means is that both sides are moving closer to each other. The Internet TV players are “channeling the Internet” – trying to help us navigate the content out there and changing our habits to “Internet first.” The traditional players, meanwhile, are opening up the experience beyond the traditional channels and aiming to continue as the preferred alternative.

This competition is win-win for consumers, who will continue to enjoy the increased interactivity and ready availability of quality content (with the latest rumors claiming that Google is going to offer a video service).

*Special thanks to Eric Danis for his editorial assistance.

Don’t get too excited – I’m not talking about finding the next Tyra Banks or Heidi Klum. During my recent interview on Amdocs’ YouTube channel, I made the case that the fundamentals of the pay TV industry are rapidly changing and require a new approach from service providers. As consumers transition from “push” to “pull” and TV converges with the Internet, what will be the next big thing? An argument can be made for prepaid TV, which will help service providers increase ARPU and target specific viewers (such as sports fans). In what other clever ways can providers leverage prepaid TV?

I count myself among the many people around the globe mourning Steve Jobs. I think the main reason he made such a big impact is that he questioned some basic assumptions. One of the key assumptions he questioned was the belief that every phone needed a keypad – try and remember how radical this notion was at the time. I still remember colleagues telling me it would never work and that consumers wouldn’t be able to type or understand the new user interface. Steve was right again – we became accustomed to this new user interface and it completely changed the whole notion of the mobile customer experience.

Some of today’s operators seem to accept another assumption: service providers have to maintain and operate their own networks. An evolution has started, though, and I wonder how far it will go. The dual demands of maintaining a network, and also providing a superior customer experience, have service providers feeling stretched thin. In fact, some of them are fighting against this feeling of being pulled in two directions by considering getting rid of their networks. They believe that they can drive a new customer experience by intensely focusing on it, rather than worrying about their networks.    

The mobile virtual network operators (MVNOs) led the first phase of this process. Their lack of a network means they must provide a differentiated customer experience. This trend has taken off quickly, with some countries, such as The Netherlands, having nearly 60 active MVNOs! We continue to see various niche offerings, such as the announcement that Red Bull is launching a partnership with EB Games to focus on creating a unique experience targeting young people (their main demographic). Red Bull will resell a renamed Vodafone mobile service on Red Bull-branded (and Facebook-centric) HTC ChaCha and Salsa handsets. Vodafone will handle the network, while Red Bull provides the experience and offers its customers a unique pricing model with no contract.

TracFone is another example of a successful MVNO. It has garnered over 18.8 million subscribers in the truly competitive American market by offering a prepaid service in what was predominantly a postpaid U.S. market.

The second phase of the moving-away-from-the-network process is being fueled by the need to launch new technologies and using nation-wide infrastructure to enable broadband infrastructure as a human rights issue. For example, Yota is a partially government-owned company responsible for rolling out LTE in Russia. MegaFon, MTS, Rostelecom and VimpelCom will buy traffic from Yota and lease its LTE facilities. Russia is hoping that moves like this will establish it as a 4G leader. Similarly, NBN Co in Australia is part of a 10-year, government-backed plan to deliver fiber-based wholesale broadband services to “93 percent of Australian premises.” All the local service providers, such as Telstra, will use the infrastructure managed by NBN Co for their own services.

The last phase consists of providers who have moved their network operations to long-term managed services agreement, such as Sprint; 3UK and T-Mobile UK’s Mobile Broadband Network LTD project; and not long ago, there was a call by Cornerstone, the network-sharing joint venture established by O2 and Vodafone, for outsourcing proposals.  

The common factor connecting all of these three phases is the desire to focus intensely on providing a unique customer experience. MVNOs don’t possess a network, so they must differentiate based on the experience they provide. Government initiatives level out the network situation, driving service providers to focus on customer experience-based differentiation, which puts a premium on experience. And joint ventures featuring shared networks between competing local service providers inspire the partners to stand out – again with a unique customer experience. All of the above ideas can generate excellent ROI and sustained future innovation. I expect this trend to continue and grow as the demand for network coverage and broadband accelerates, and I predict we will see many new models of how unique customer experience is leveraged to achieve a sustainable competitive edge.

Are there any service providers who will give up complete commercial control of their network and totally divest?

Such a service provider will be taking a big chance, because while device makers and over the top players such as Apple or Google can always blame the service providers for a poor customer experience, the service providers won’t have that option. Still, customer experience is clearly becoming the biggest differentiator and it’s difficult to focus on both network and the experience, so expect to see more announcements of service providers choosing one of the above options (or a new, innovative one) so they can better focus on customer experience.

*Special thanks to Eric Danis for his editorial assistance.

I am STILL renovating my house, but I am glad to report that it’s about 80 percent complete. As part of the process, I had to call my service provider to reinstate my triple-play offering. The whole process, which was divided into two distinct parts, once again demonstrated the meaning of the phrase “end-to-end customer experience.”

Phase I

I started by calling a call center agent. She said I needed an inspector (due to the renovation) and only then would she decide which technician should come and when. At first I was OK with the idea, until I was told that the inspector couldn’t come for at least a week, and then I would have to wait even longer for a technician. I tried to explain that in the era of the connected world two weeks without connectivity is unbearable – and since we are talking about triple play, I would barely be able to live my normal life. After further negotiations and some mild yelling on my part (we’ll just call that “advanced negotiations”), we agreed upon an earlier date.

Phase II

Once the technician arrived, I must admit that I was blown away. Gone are the days when you needed three different people to install all services. An extremely efficient and friendly representative quickly installed the phones, Internet and TV – and even refused a tip. I have of course already started using the services – the TV is great, voice is OK (some static) and the Internet is fast.

Am I Happy with the Quality?

The incident left me thinking about how we measure and rank our experiences.

Am I happy with my provider? Did phase 1 leave me scarred, or will I forget it because of phase 2? Am I dreading what will happen if something again goes wrong with my service? The reality is that in my overall ranking of the provider, everything matters – every touchpoint along the way. And many consumers aren’t savvy enough to distinguish between quality of service and quality of network – they just want good quality, period.

This is exactly why quality has been the focus of some of the marketing campaigns we have seen around the globe. For instance, Best Buy, a global retailer and developer of technology products and services, heavily promotes its “Geek Squad.” The Geek Squad is the “first national 24-hour task force dedicated to solving the world’s technology challenges” and has “20,000 active Geek Squad technicians patrol Geek Squad precincts in all U.S. Best Buy stores.”

T-Mobile devotes a page of its Website to the awards it has won, many of which focus on quality. They list a “Highest Ranked Wireless Customer Service Performance” award from J.D. Power and Associates, to give one example. Likewise, TELUS published a corporate social responsibility report that is designed to “help ensure our team members put the customer at the heart of what they do. In 2011, our opportunity is to elevate our performance with respect to the customer experience and the metrics that support it.”

Network quality also frequently features in marketing campaigns. Vodafone Italia, for example, recently announced the launch of a device that it says will offer “high quality mobile network coverage inside buildings, houses, industrial facilities and partially isolated areas not reached by the mobile signal.”

When we look at broadband services, a recent survey found that on average, during peak periods DSL-based services delivered download speeds that were 82 percent of published rates. In this climate of best effort, it is no wonder that providers, such as SingTel in Singapore, are promoting the speeds that are actually delivered. SingTel has published the “typical speeds” of its mobile broadband. “We are constantly listening to our customers to understand their needs, and they have told us that they are not getting the speeds that are advertised,” said Yuen Kuan Moon, SingTel’s executive vice president of digital consumers.

So how much quality is enough when we look at experience?

The answer is “it depends.” Millions of people love free services from over the top players, such as Google’s Gmail, but what happens when they experience problems, or are locked out of their accounts, and there is no one to talk to?

In general, I would argue that controlling multiple channels for a customer increases loyalty, but raises quality expectations. It feels like my house renovation may never end (at least in the meantime I can now surf the Internet and watch Glee again). Likewise, service providers’ quest to improve the quality of the end-to-end experience is ongoing and requires much careful thought and hard work.

*Special thanks to Eric Danis for his editorial assistance.

I am renovating my house. Last week, a maintenance man came with his tractor to pave part of my family’s garden. I know in our industry we often use the phrase “cut the cord” as a figure of speech, but the tractor literally cut the cord – the cable cord that ran through my garden.  When I told the story to one of my neighbors, she asked me, “Do you really need to replace the cord? Do you still watch cable TV? Aren’t you already downloading most shows and movies from your PC?”

This incident got me thinking about the TV industry and the tough challenges service providers face from over the top (OTT) competitors, such as Netflix and Hulu. Do you want the good news or bad news first? Research firm SNL Kagan is predicting that roughly 10 percent of American households will go without cable, satellite or telco video service by 2015. This cord cutting is certainly worrisome, but if service providers continue to service the remaining 90 percent, while using the OTT threat as motivation to experiment with new cable, satellite and IPTV business models, the future just may be brighter than expected.

Cut the cord or plug in?

Prepaid TV? Yes, actually.

Platform “n,” the Polish direct-to-home (DTH) pay-TV platform backed by the TVN Group and TP Group, has launched a new prepaid option with good results. There are two packages for prepaid – a basic package offering 27 channels – including several HD channels – and a new package (text is in Polish) with 12 HD channels and a 3D channel.  If you believe this phenomenon is restricted to emerging markets and low ARPU segments – think again. We are seeing more players in mature markets trying to explore the prepaid segment.

 Satellite TV as over the top player? Almost …

 Digital+ in Spain is trying to beat OTT players at their own game by offering  VoD service, in addition to the traditional DTH platform, to all Internet users in an attempt to boost its subscriptions. Digital Plus Videoclub, currently under trial, will allow Internet users to rent films and TV series for a period of 30 days (with a limit of 48 hours from the moment viewing starts).  Consumers can select  à la carte bundles, rather than receiving the traditional bundle of channels (which often contain channels that specific consumers aren’t interested in).

 Content, user interfaces and Web access

 The Google – Dish Network partnership introduced a new type of set-top box (STB) that can access Dish content while using a Google interface to the Internet. This is an attempt to get the best of both worlds – content from Dish, with Google’s fantastic user interface and access to Web content.

 So will I cut the cord? Absolutely not. I am still a fan of the channels being “pushed” to me. However, as I increasingly go to other sources for content to augment my service provider’s offerings, the relationship with my provider will have to change.  In a highly competitive environment with new types of players with different business models – the traditional players are forced to question some of the fundamentals of their business to stay competitive. I suspect the TV business model revolution is only in its infancy. Stay tuned…

 Note: my next blog entry will be posted in September. For those of you going on vacation in August, enjoy!

 *Special thanks to Eric Danis for his editorial assistance.

Microsoft is in the process of acquiring Skype – which has partnered with Facebook. Do these new developments signal that the sky is falling for service providers?

The quick answer is “no.” First of all, some analysts are even predicting that partnering with Facebook may hurt Skype, turning it into a type of dumb pipe. Regardless of the outcome of that specific partnership, service providers would be wise to adopt a “If you can’t beat ‘em, join ‘em!” mentality, because although the immediate going might be rough, VoIP just might eventually stand for “Various Opportunities, Interesting Potential.”

An example of this interesting potential is Comcast’s announcement that subscribers equipped with special gear will soon be able to use Skype on their HD sets.

VoIP strategies and planning can no longer wait. Service providers have already begun blocking, partnering and launching their own VoIP solutions. Each approach is potentially beneficial to service providers.

Blocking lowers the risk of cannibalizing voice revenue and protects network performance. An example of this approach is T-Mobile Germany’s past decision to block Skype traffic on smartphones with mobile Internet connections. The downside to this approach is negative publicity/customer anger. In fact, customer dissatisfaction most likely played a role in T-Mobile Germany’s later decision to allow Skype with the payment of a premium charge –$14 U.S. or upwards depending on the tariff. It is important to note that the future viability of the blocking strategy may be in jeopardy after The Netherlands became the second country in the world to enshrine the concept of network neutrality into law.

Service providers partnering with over the top (OTT) players can add value with network services, including QoS, security and fixed-mobile convergence, and offer a differentiated service. An example of this approach is Sprint’s decision to allow all of its subscribers to use their existing Sprint phone numbers for Google Voice. One potential drawback is the potential for conflicting interests among the partners.

Launching their own VoIP services will allow service providers to effectively target certain segments (such as students, international callers and business travelers) and lower operator costs through better service design. More importantly, providers can offer unified communications and a unique customer experience by integrating services, such as combining VoIP with video and location.

My sister-in-law lives in Italy (you should taste her cooking!) and we began Skyping with each other a number of years ago. Skype has definitely become more user-friendly and reliable over the years. As the same becomes true for mobile VoIP, service providers will continue to analyze the different options closely to make sure they aren’t missing the boat. There is certainly reason for optimism, in spite of the challenges.

* Special thanks to Eric Danis for his editorial assistance with this blog entry.

After Verizon Communications Inc. announced that it was stopping unlimited plans for the iPhone, a batch of stories and blog entries appeared telling us that unlimited is dead. After all, Chief Financial Officer Fran Shammo was quoted as saying that unlimited data plans, such as the $30 per month plan that Verizon had offered to iPhone subscribers, are “not a long-term solution.”

The data crunch is certainly very real and service providers must deal with it. But like spring flowers that reappear every year after brutal winter rains, I don’t believe that we’ve seen the last of unlimited data plans.

It was only a few short years ago that service providers were happy to sign up consumers for unlimited plans as a way to monetize a new and exciting service. But it didn’t take long for the data crunch to hit hard, and since then analysts have been busy planning unlimited’s funeral.

An unlimited data package may have prevented his bill shock…

Probably because of these continuous reports, many of the participants at our Amdocs InTouch Business Forum in Miami last month seemed quite surprised to hear that some service providers plan to continue offering unlimited plans. Sprint will continue to support unlimited data plans, for example. MetroPCS also said at InTouch that it will continue to offer its unlimited data packages ($40 a month, for unlimited voice, text and mobile Internet; $50 for a metered bucket of video minutes or $60 a month for unlimited video).

Why are some operators choosing to continue offering unlimited packages? The answer is simple. Actually, the answer is simplicity. Sprint said it will continue to support unlimited data plans because they help maintain customer satisfaction: there are no “surprises” when the monthly bill arrives.

And make no mistake about it, there will always be customers, particularly older ones, who will find it difficult to understand the technological aspect of their plans and will fear “bill shock.” Other customers may find it difficult to remember their limits in today’s busy world. The Guardian newspaper reported last year that a consumer group in Britain “found that 6 million people either did not know or had only a vague idea of their monthly limit for call minutes. Five million were unsure of their text and data allowances.”

Unlimited certainly isn’t for every service provider and it isn’t for every customer. As the crunch worsens, we can expect the desire for simplicity to grow and there will be ways to achieve simplicity for customers while factoring in the data crunch. Stay tuned…

* Special thanks to Eric Danis for his editorial assistance with this blog entry.