Consumers examine the promises a company makes to them (branding) and also assess if that organization has the means and the credibility to meet this promise (reputation). In the competitive telecom landscape, companies have several avenues they can explore to make compelling promises to customers. Often however, telecom brands look no further than the more fundamental needs of good network coverage, dependable customer experience, and reliability.
Typically, a large brand stands for a lot of things, occupying consumer ‘mind space’ on several aspects. But what are those attributes that help a brand really differentiate and be the key to success? This article will delve in to finding out what can make a telecom brand successful.
BRANDING IN THE TELECOM INDUSTRY
Standing out in the telecom industry is not always easy. Network upgrades, product offers designed by one brand, are easily replicated by others. This makes it difficult for brands to develop any uniqueness, and the market gets commoditized.
Strong ‘branding’ alone can ensure that operators retain that competitive edge. This finding is based on our brand equity measurement system – ‘Winning Brands’ – which confirms that within the telecom industry brand equity has a very high correlation (0.86) with market share. So we delved deeper to see what drives the Brand Equity itself. Or in other words, what makes a brand enjoy a higher equity. What attributes do successful brands have?
Nielsen has identified two attributes that are strongly correlated with the Winning Brands Equity score based on 60 brands in 25 markets. They are ‘Salience’ and ‘Innovation’.
‘Brand awareness’ (being seen / heard / being present) is the biggest driver of equity in the telecom sector. The cause and effect is hard to determine considering that telecommunication companies also have very large advertising budgets. What is clear is that ‘awareness’ drives the ‘equity’ of a telecommunication brand. This also suggests that ‘new entrants’ would need to have enough reserves of money to ensure they make a big splash and build awareness as they vie for a slice of the telecom pie.
The concept of awareness has several facets and distribution is a big one. Consumers expect that products can be readily obtained when they hear about them. In prepaid markets, this could also mean easy access to top-ups. Being ‘present’ and ‘seen’ is therefore a sign of brand strength, and consumers often to equate “what’s seen and heard” with “what’s good” in terms of a telecom brand.
But how can then smaller brands keep up with the big ones who have deep pockets?
They need to innovate. Innovation correlates as strongly with brand equity as does salience and presents itself as a huge opportunity for competition brands. Consumers are most likely looking for new and different product offers, bundles and pricing options. But innovation doesn’t have to pertain to a product or service plan. Brands can be viewed as innovative through advertising, for example. They can also stand out by trying something that no other company has, such as adopting a new technology that others might view as risky.
Network coverage is the core product of any telecom provider. While improving network is always a big burden on operators, providing steady network coverage is the most fundamental expectation from a consumer’s perspective. While the world talks about LTE (Long Term Evolution – the next generation of mobile networks) and the operators rush to get there, consumers are asking in our region for an uninterrupted voice call with good voice quality. Data coverage and therefore advanced features like data coverage and 4G network are important but don’t necessarily drive what consumers think of a brand.
One of the most surprising findings has been that pricing doesn’t come up as a differentiator and driver of equity. Better pricing might help win some customers but it doesn’t really help building Brand Equity. This is an important observation given that brand equity not only correlates with market share, but also indicates the long term possibilities for a brand. The challenge with pricing is that it can never be a property ‘unique’ to one brand.
