B2C – why there’s no such thing (and what you need to do about it)

For years the ICT industry in general, and the telecoms industry in particular, has segmented the market according to whether its targets are consumers (B2C) or businesses (B2B).

On the telecoms side of the market this simplistic segmentation never really worked. (see Are segmentation mistakes costing your business millions?) But the coronavirus crisis has really brought home the fact that what has traditionally been seen as a B2C space – the household – is nothing of the sort. In fact, the household has quietly evolved into something new. A smart lifespace where humans live, work and play, supported by an ever-increasing range of technology, including IoT.

By not seeing the totality of the opportunity – of what humans are doing within their lifespaces – CSPs are failing to maximise on their opportunities and deliver the rich service offerings that households want and need today. And, even more importantly, are willing to pay for.

Instead CSPs have left households trying to assemble their own bundles of services from a range of service providers and plug the gaps in between. And this means CSPs are leaving money on the table and frustrated customers in their wake.

The hard divide between B2C and B2B means that:

• marketing messages in B2C focus almost entirely on leisure and miss the fact that so many people are now working from home or running businesses from home (see Understanding the nanobusiness opportunity)

• marketing messages are still far too generic and packages are designed to appeal to customer personas that don’t work on a household level (since households often contain more than one person doing more than one type of activity)

• sales and marketing are focused on customer acquisition which drives a negative churn cycle, rather than rewarding loyalty and focusing on upsell and cross-sell (driving retention)

• post-paid mobile and home broadband packages are too static and don’t allow customers the flexibility to adjust what they’re buying

• convergence is at best industry navel gazing, with few service providers have really cracked a ‘Network Anywhere’ experience. Customers really don’t care if they’re connected by FTTP, 5G, 4G or any other G. They just want services to work as expected

• gross and incorrect assumptions are made, such as that customers really don’t understand quality of service and thus it cannot be marketed to them. There is a failure to understand that IT literacy is now far higher than 20 years ago and most customers can articulate what they need and whether their service is working for them
• trust is being undermined by marketing ‘trickery’. Instead of trusting their CSP to always provide them with the best offer, best deal and best product, customers have been educated by those same CSPs that packages have lots of caveats, they will get stung if they go outside their package, and their loyalty is not valued (because tomorrow’s customer will get a better deal than them).

I am sure you can add many more items to this list. But the question is how do we get out of this lazy marketing mindset? How do we capitalise on the smart lifespace opportunity to make short, mid and long term revenue gains?

The first challenge is to rethink our concept of the household and its needs entirely. To help you do that, see our new Green Paper on the smart lifespace opportunity.