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CONTENTS
Contents
Introduction ........................................................................................................................... 5 Marketing Pilot as an Integrated Process........................................................................... 6 Defining Criteria for Success ............................................................................................... 7 Defining Pilot Parameters.................................................................................................... 9 Geographical Area ........................................................................................................ 9 Potential First Market .................................................................................................. 9 Lifestyle Profile............................................................................................................. 9 Opinion Leaders.......................................................................................................... 10 Analyzing Adoption Rate and Usage Patterns .......................................................... 10 Additional Pilot Activities .................................................................................................... 11 Customer Support Center ......................................................................................... 11 Communicating with Customers ............................................................ 11 Focused Marketing Activities..................................................................................... 11 Summary ............................................................................................................................. 13 About ECI Telecom ............................................................................................................. 14
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CONTENTS
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INTRODUCTION
Introduction
To some extent, replacing a legacy network with optic fibers could be perceived as a technical process, requiring greater operational than business changes. But this is not the case. Replacing infrastructure at end customer premises requires the end customers approval and time. Most customers would agree to wait at home for a technician and have their communications hardware connect differently if they see the direct benefit of the change. At this point marketing has the greatest impact. Our experience shows that operators who plan ahead to provide new service offerings in parallel with new fiber infrastructure implementation and involve their customers in their plans and vision, appealing to their emotions by presenting the new service as an innovative and exciting experience, succeed in turning their investment to revenues much faster. The key to implementing such an approach is successful marketing pilots. Operators who invest in marketing pilots before making a significant network change are better able to plan the service packages and define the target audience. This knowledge enables a better penetration ratio and demonstrates faster ROI. In some cases we even see the direct impact on increased ARPU, with faster implementation of a new variety of services. Performing a marketing pilot is a significant part of forward planning for a new network. The marketing pilot examines the business impact of the new network on a small scale. It is, in fact, a small scale introduction of service packages, based on gradual and specific new network implementation. During the pilot period, specific data parameters are collected, and by the end of the pilot term all metrics are used to re-evaluate the business plan and ROI and assess potential revenue generation from the new service. This white paper presents ECI Telecoms proposed approach to marketing pilots, their possible components, and expected results.
Services adoption
Overall acceptance of service packages. Measured as a percentage of acceptances (Home Passed) out of total potential customer. Percentage of preferred services packages out of base services offered.
Identify penetration ratio and services acceptance in each geographical area in scope.
Bundles adoption
Define anchor services. Define basic package services. Analyze Value Added Services pricing. Define pricing models. Update business plan and ROI. Update adoption of basic package. Consumption ratio of Value Added Services.
Price sensitivity
Percentage of services/packages rejected due to pricing strategy. Collect rejection ratio for each package offered
Perform customer satisfaction survey to measure: Satisfaction with consumed services and packages. Satisfaction with pricing. Satisfaction with selling process Perform customer satisfaction survey to measure: Satisfaction with customer service. Satisfaction with installation and delivery. Combined installation rate: Percentage of installation acceptance out of the total offered.
Back-office support
Ready for the deployment rate. Matching the mass deployment rate to the predicted demand rate.
The analysis of a marketing pilot results is a highly significant process. It is possible that the technical implementation was executed as planned according to budget and provided high quality of service, but the business case indicated that the target audience did not accept the new services as planned. When performing a pilot, one must take into consideration that its outcome could be to reject the new infrastructure, or at least change the terms in which it is being implemented and offered.
Customer Profile: Market research and segmentation processes facilitate building a Potential Customer Profile for new services. It is advisable to choose areas where potential customers suiting this profile can easily be reached. Homogeneous Population: Choosing areas characterized by a homogeneous population allows rapid penetration. Selecting an easy-to-adopt building/neighborhood might sometimes be easier to penetrate, but will not predict the expected progress in other neighborhoods/houses. Population Size: The first area chosen for the pilot should be sufficiently small and peripheral not to affect the essential business of the company in case of failures, but large enough to allow conclusive implications. Favorable Initial Approach: The first area selected for the pilot should be characterized by undisputed favorable company positioning clearly differentiated from the competitors. A region that is characterized by a militant approach against, for example, the Telco or a religious approach against technological innovation should be left to the end of the rollout process. Local Regulations: Easily obtainable approvals and the support of the local authorities ease the penetration process in the first regions and contribute to the main target of gaining the market share as quickly as possible.
Lifestyle Profile
Innovative services are first adopted by those who are used to using innovations and gadgets. The first segment should include an agreed percentage of the "early adopters" population. Later on, while calculating the total adoption rate, the agreed percentage should be taken into consideration in assessing the penetration potential. Early adopters are identified by using segmentation according to a consumer lifestyle profile, which may include the following parameters:
Tendency to adopt innovations Current use of other technological services High usage of other services offered by the company Socioeconomic profile demographics of the household (education, income, age, number of children and their ages, etc.) Leadership position in the community
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Various data sources can be useful in identifying potential customers fitting the desired profile: internal data of the company, regional statistics, search ads in local newspapers or websites, recruiting a local source who knows the nature of the local population, and others. Identifying the proper market segment according to the characteristics of the first customers to adopt the new network contributes greatly to building the brand's attributes and the correct messages to be used during the nationwide launch of the network.
Opinion Leaders
At a local level, the opinion leaders may be political leaders, educational and commercial personalities in the community, or the journalists and press who cover the technological services and gadgets in the local media. Early identification of opinion leaders within the local arena and rewarding them when they connect and use the new services can create the required buzz in the community and increase the penetration rate. Rewards offered to opinion leaders vary from free usage to additional gadgets or premium and new services offerings.
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Installation crews play a key role in creating awareness in the targeted areas by guiding the connected users, offering in-house demonstrations, identifying additional potential customers in the connected buildings, and offering promotional brochures. These activities should be followed by visits from door-to-door sales teams, deepening the penetration rate in the already connected buildings. Effective promotions in the initial rollout may include a trail period at no charge, bandwidth upgrades, free value added services included in the bundle, end-user equipment bundled with the services, and free installation.
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SUMMARY
Summary
Experience gained from launching new fiber-based networks has shown that the initial penetration rate of attached services can predict the market growth rate during the first years. The marketing aspects of deploying new FTTH network services are no less of a challenge than the engineering ones. A marketing pilot, while striving to achieve a significant market share in each specific area, enables the Service Provider to prepare better for a full commercial launch, to have more precise predictions, and to be ready for different scenarios. The marketing activities described in this white paper will achieve rapid market share in each region while keeping control on the costs and conserving the main marketing budget for the full commercial launch. The key factors leading to the success of a gradual geographic rollout can be summarized as follows: 1. 2. 3. 4. 5. Full cooperation between the marketing and engineering functions in order to allow controlled progress of the rollout. Well-defined success criteria for the pilot. A "pull" approach for distribution and sales. A Customer Support Center from day one to obtain valuable information from the customers. Use of marketing tools, opinion leaders, and local interests to help build the local buzz.
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