Showing posts with label MVNO marketing. Show all posts
Showing posts with label MVNO marketing. Show all posts

Wednesday, 23 March 2016

MVNO World Congress Pre Conference Workshop 2015

2015 Pre Conference Workshop - MVNO Marketing

I had the pleasure of running the MVNO world Congress pre-conference workshop in the 2015 #MVNOIS, so as we run up to the 2016 MVNO event in Amsterdam its probably time to upload some of the slides to give you an overview and share some of the experience.
2015 #MVNOIS Pre Conference Workshop 
The workshop was in three parts, this is the first part that focussed on MVNO Marketing, which in my now 16 year of doing MVNOs, is the hardest hurdle after the MNO agreement and MVNE plus all the other service provision contracts selection. The second part focusses on MVNO Data.
2015 #MVNOIS Pre Conference Workshop topics covered
I Will cover the MVNO Data services, MVNO International Roaming, and MVNO Multi-IMSI points in the next few days / weeks running up to the 2016 Conference, as these areas are key, if not the key way an MVNO can differentiate itself from other MVNOs and moreover its host MNO and grow scalability in a competitive mobile market.
An Activity every MVNO should do almost daily!
The first task was to name 3 Big MVNOs that the audience think market themselves well. This is important on many levels.

  • Firstly, if there are none of them in your market you need to ask some serious questions about why and make sure you are not repeating any of their mistakes! 
  • Secondly, it is where MVNOs most differentiate themselves at conception, but most easily compromise on in launch... and to be honest, from there they often never launch and/or never become successful. 
To be a successful MVNO you need to be able to easily access all the needed data on your customers, process this and send targeted below the line packages at them. The key here is that they are below the line, competitors do not see them, customers love and recommend them, but your competitors do not copy them. I want you to think about this as you go through the slides, and I add my 3 top MVNOs further down.
This is sadly where a lot of marketing time is wasted by MVNOs - above the line copy cat price competition - why?
Most MVNOs develop what I cal a bi-polar frankenstein approach to Marketing.

  • Bi-Polar as they flit between being slightly cheaper that their most expensive competition, to undercutting the cheapest offer from the biggest MNO in an instant. 
  • Frankenstein as the first marketing and even product set, is usually stolen from every MVNO that has ever existed in 5 countries, over 3 MVNO models in 6 different niches... and the result is, well usually awful! 
The way MVNOs market is by sending bespoke offers to their customers that will never be on a slide, as they arrive via SMS and the offer is only available to those customers, or other customers of the MVNO. To do this you need ready and quick access to data:

  • who do they call? 
  • what time do they call?
  • what handsets IMEI/MSISDN database are they using?
  • what locations are calling from frequenting?
  • what locations are they running out of credit?
  • where are they topping up?
  • how much and how often are they topping up?
  • what top-up channels are they using?
  • what type of data are they using, where and how fast?
All this is in the CDRs, GGSN and HLR, and needs to be available to the OCS needs to be fully integrated with this, as well as a tool to bulk SMS, and report who has what SMS, as while you will be marketing daily, its not good to market the same customers more than a few times per month for obvious reasons.
"If you cannot name 3 MVNOs from your territory that do this well, its most likely that they do not have access to this data, and if you do not, then you will not be a leader either" 
MVNOs are a Sales and Marketing organisation. The best ones have great BI and change pricing flexibility 
OK I jumped a few slides here on refining product and marketing, however this slide leads on well from above as well as: When an MVNO examines its subscriber acquisition costs (SAC), ARPU and Churn, it very quickly sees that MVNO led customer to customer and MVNO to customer led marketing obtain customers cheapest and keep them the longest. It is important to have a mix of SAC but these need to be kept down to grow successfully as an MVNO.
Choose and adapt from successful MVNOs, but avoid "Bi-Polar / Frankenstein" campaigns! 
Draw on what has worked and what is (see previous slide) is in budget. EE recently did a huge above the line campaign with Kevin Bacon, which is beyond any MVNO marketing budget, however its OM4G and 4GEE twitter coverage was cheap and genius and well within MVNO budgets.
Back to the three MVNOs from the activity above, go through these points.
In my workshop I then went through the above key points for three MVNOs I think market themselves well. My examples were deliberately different: Lyca Mobile, Virgin Mobile and Tesco Mobile; the key being that while they are very different MVNOs in very different segments, theirs USPs focus on points that the MNO and other MVNOS find hard to copy, they deliver what they promise without extensive T&Cs, and typically their most successful packages are no where near as cheap, nor anywhere near as expensive, as the cheapest / most expensive MNO offerings of the "Bi-Polar" approach to pricing.
My most copied slide! The MVNO must evolve its marketing to launch successfully and then grow
Which brings me to the last slide of the Marketing section, and my most copied slide. Every MVNO that has been successful has evolved through these stages, many that have failed have failed to adapt, either because.

  • They just did not evolve. Some ethnic MVNOs started with a multi-language USP, but as customers learn their host country language the product needs to evolve, or the countries expand.
  • They could not evolve technically as they were tied too much into their host
  • They could not evolve operationally - if the reporting is manual spreadsheets... you are not going to market successfully beyond early adopters.
When launching an MVNO you can get by with the basic tools that an MVNE and the host MNO gives you, as long as this includes: CDRs, IMEI, HLR location of LUs, all transactions, collated top-up info, SMS marketing tools and reports, reconciliation, GGSN logs, etc. These need to be accompanied with the ability to update data settings OTA, edit the SPN OTA, change tariffs real-time, etc, etc. and usually require another 10-20 services to be sourced and integrated to move beyond early adopters.  These are the keys missing from failed MVNOs or underperforming MVNOs.


I hope you find these slides useful and informative. Feel free to paste these slides into your own presentations, as many do, but of course please do the basic common courtesy of quoting where the content is from if you do change the appearance and/or remove any logos, watermarks, etc.

Sunday, 20 January 2013

Apple Global MVNO

Original Article 2007

Apple Global MVNO

Apple deal with operators is a de facto hardware MVNO
It is no secret that a typical MVNO may only manage to get a 10% to 40% margin on calls, onto which it has to add its costs. This is usually OK, as many of these have either already been sunk, written off or are as low as they can go if the MVNO core business is already a “no frills” card calling or other related business. However, it is still said margin before costs. It is, therefore no surprise that the most successful MVNOs so far have been “no frills” MVNOs as reported in by Business week in this article and as per my response below (previous article; RE: Why Europe’s MVNOs sing).
As far back as 2003, when I started writing my next generation MVNO report, I had the hardware MVNO as one of the next big business models. The two main contenders were Apple and Dell. Dell fell victim, in the UK at least, to Vodafone’s deal with Intel to give away 3G data cards with every Centrino laptop in exchange for merely signing a direct debit for the Vodafone SIM inside it. The Apple MVNO, however, has finally come to bear fruit, and in a way nobody could imagine: It is a Virtual, Virtual MVNO, as according to these articles in the Financial Times and the BBC, it has managed to get between 10% and 40% margin for all the iPhones, and on top of it no costs. The extra burden of billing, one of the biggest costs for an MVNO, is borne by the host network operator, as it’s the second major cost: customer care. Furthermore, it has managed to do what very few MVNOs have managed to date, export the model to become a global MVNO. To boot, its business plan manages to overcome the other great hurdle to any MVNO expansion: handset subsidies; as people are falling over themselves to buy an iphone, something to date that only Nokia and Sony Ericsson have managed to do with a premium handset to date (8800, 8210, N95, P800, P900, etc). You have got to hand it to Apple, they have pulled off the biggest MVNO coup to date. There is one final even more surprising fact, no, not that they managed it without my help (apart from buying a copy of my report): The biggest surprise is how they have managed to actually get the MNOs to bid against them, rather than the usual beauty contest that building an MVNO entails. Mobile Network Operators have not been in that seat since they managed to bid UK and Germany 3G licences into the billions. So how have they managed that?  It’s simple, due to the nature of the way networks were set-up, in larger economies there are networks that are predominantly focussed at a certain demographic. In the UK, the larger part of the youth market is on o2. However, it will not have escaped any of the networks that they could have poached a good few of the other’s customers.
So, for the record virtual mobile network operator, means 10-40% plus costs; virtual, virtual mobile operator means 10% to 40% with no costs, well at least if you are Apple.

Orignally posted by Christian Borrman 11:26am 25/09/07

mvno and the brand

MVNO and the Brand

We have heard a lot about the brand MVNO and MVNO and the brand, unfortunately most of it is confined to the conference room and reports.

Brand MVNO

The Brand MVNO is where it all started; Virgin Mobile UK spent a lot of money on promoting their brand, and they were right - look at how much money Vodafone started spending on its brand post Virgin success vs. before! The problem was, Virgin then went to conferences saying: "don't copy us unless you have £50M to spend on your brand" which the MVNO industry unfortunately generally read as "don't spend anything on your brand". The Brand MVNO Model is covered in this post.

MVNO Brand

The Brand is a critical part of every MVNO, from the pitch to the MNO to sales:
  1. The MNO is putting its faith in the MVNO ability to access a market - without a brand, how long will that last? Brand is one of your strongest MNO negotiation points!
  2. In fact all your MVNO partners will be sizing up the opportunity of your brand when they negotiate with you, as Brand = ability to sell, ability to distribute
  3. The brand will determine your your uptake and limit your churn. Remember, Remember that MVNOs live and die on acquiring customers cheaper (than the MNO can) and keeping customers longer, and the Brand is key to this.
  4. There is a role for the niche within a niche with brand: Brand helps you compete within even an extremely competitive space such as the Ethnic MVNO market

MVNO Brand as part of Marketing strategy

However, be aware of how you use your brand: see matrix below; many MVNO brands today are in the dangerous "follower" space, especially those that do not have a defined MVNO marketing strategy. Some may try to come in at the Leader level, however this has its problems, the key being that it is expensive to maintain: you can find yourself at a monthly / quarterly review renewing media that just is not effective at selling because it is protecting your brand, you may also be even considering subsidies or at least a large amount of arbitrage/utilisation risk on your bundles to get here...

Virgin mobile entered as the challenger, and did not move into the leader position until maybe 2-3 Million customers when it essentially became and MNO brand of its host, began subsidising handsets, etc, etc.

MVNO Brand Values

Becoming a challenger is not hard: if at first you have defined your product and segmented your market, the brand and its values should not be hard, but check, do those value ring through? An overwhelming feedback in the latest MVNO conference in Paris, from Red Bull, NRJ, Bleip and more leading brand strategy MVNOs commented on one thing: NO SMALL PRINT. If your brand is simplicity, honesty, etc, small print goes against this. Most MVNOs win over the MNO on simplicity, if you look at the MVNO segmentation post. Does your MVNO product reflect your MVNO brand, is what you are doing new, or just rehashing what the MNO does???

Work these simple points out, and not only will your negotiations with your MNO and other partners be simpler, but your MVNO will benefit is acquisition and retention - in this sense, every MVNO is a brand MVNO!

Original MVNO and the Brand support page:

BRAND IDENTITY IN MOBILE SERVICES

For a brand to have any value it must mean something to the customer and to do so it needs to be exclusive. This is not compatible with trying to own all areas, sectors and parts of the market with just one brand, as most mobile operators do today. Because of this, most mobile operators' brands are all over this matrix. Note that successful MVNOs, like Virgin Mobile, started as a challenger and are now becoming brand leaders, whilst minimising any association with the "follower" values.
©Copyright 2001-2005 Christian Borrman, All Rights Reserved. Reproduction Prohibited

Wednesday, 4 April 2012

Marketing and MVNOs

MVNO marketing budgets, strategies & process

"We don't have a marketing budget" - yes you do, it's called lack of gross margin!

Often MVNOs have said to me "we don't have a marketing budget". My reply is almost inevitably always the same: "yes, you do, its that 10% - 20% of gross margin you are missing by selling on price due to a lack of a marketing plan, and the budget required to fund it!"

Marketing MVNOs in their infancy

MVNOs are still largely in their infancy as a result; they are still at the "white label" end of wholesale, where they are largely marketing on reselling a product and promoting simplicity or price. the opposite end is when you have a huge marketing budget, a great brand, and you can add hundreds or thousands of percent margin. I am not suggesting MVNOs will get their, yet, but there is still a long way to go.

There are emerging, promising behaviours. MVNOs with just a Facebook page, that I have referred to elsewhere on these blogs, however the fact that a client of mine, who has been in the MVNO business for many years and is very successful,  recently asked for help on their marketing strategy 3 days before launch shows the position we are in at the thick end of MVNOs

So why do we not have MVNO marketing strategies in MVNOs?

There are three main reasons MVNOs are not marketing well yet
  1. to market a product successfully, you need to understand the end to end product, where it comes from, how much it costs, what element cost a lot, which ones cost a little (freebies do not pay for themselves) and of those things that cost a lot and a little, which add value and which don't and when. Virgin mobile were very good here, putting marketing people on the board, where they could see management accounts, understand the issues and as such end up with 2 million customers when they expected to have 200,000! As MVNOs are still in their infancy, most of my work in MVNOs is helping clients bridge that gap across the board, let alone finding a single marketing person who will understand this.
  2. The market is still in its infancy and dynamic: I have trouble keeping abreast of the end to end dynamics of MVNOs and I work full time, have done since the beginning and allocate a huge amount of my time and effort to R&D and helping new entrants pro bono, as well as having a blog where every man and his dog who wants to be an MVNO invariably contacts me at one point or another. If you are not prepared to get your hands dirty or get off the clock every so often you stand no chance!

So what are the classic three MVNO marketing mistakes:

  1. The MVNO is a brand and already has a marketing department. All well and good, but selling mobile wholesale is a specialist product and does not relate well to other services, except maybe wholesale food, where supermarkets have been moderately successful. however, to be a successful food marketeer, which supermarket marketeers generally are, as per point one above, you need to have your head in commodities you are selling, and wholesale minutes, mbs and messages will only be a distraction / part time job at best: it needs dedicated resource
  2. The MVNO hires and ex MNO marketeer: this is ironically often the worst mistake, as they are either junior and never had the foresight to understand the end to end process of the MNO, and therefore will struggle to grasp the process in the MVNO, or they are senior enough to have been exposed to the whole marketing budget and reporting process and will inevitably be bored of the lack of MVNO budget sooner or later. That is assuming they can make the jump from MNO (essentially an manufacturer of mobile, high cost production, high margin, depreciating asset) to an MVNO which is at the other end of the industry (low cost production, low margin, no depreciating assets) - the whole paradigm is just very different. hence, you will not see supermarkets poaching marketing staff from their suppliers!
  3. The MVNO has no marketing budget, understanding of market or desire to. I have seen this at the highest levels, where a CEO, 2 years in will ask the marketing person: what's the difference between above and below the line again? My reply, which you will be glad to know I invariably keep to myself, is "your results and your bonus". This lack of understanding usually results in one of two things: too much budget, and it is squandered on above the line, or two little budget and nothing can be done.

How to Market MVNOs more effectively...

My advice for MVNOs, based on having helped many MVNOs to market over the last 10 years, and thankfully they are all still in business, is to start small, measure success and grow the budget in line with results. The reason for this is that I have seen people in mobile spend money to acquire 100,000 25 year olds and achieved 500,000 43 year olds... on evaluation, the result was no where near as "cool" but the fact is that 43 years-olds have more money to spend on mobile than 25 year-olds and are more loyal: keep spending!

Leverage social, leverage on-line! 6 to 7 out of 10 sales in fully fledged and marketed MNO sales are online, this is up from less than 1% in just 2007. Companies such as Telmore in Denmark have grown to 800,000 subscribers in a country with a total population of just 4 people (or so!) mostly online, however:
  1. to do this you need to be "web 2.0 aware" a terrible phrase, but true. Social is cheap as you basically outsource your marketing to the public. the stronger your brand and the better your product, the better you will fair, but as you grow you need to be able to manage this.
  2. To sell MVNO online, you need to be online, that is, you need data and Value Added Services (VAS), another bug bear of MVNOs and a key subject of upcoming MVNO conferences, and one I cover here.

MVNO sales and marketing process:

  1. get an initial budget: to do this you need to be honest about your Subscriber Acquisition Cost (SAC) and attribute an appropriate proportion of that to marketing, I have used different amounts to different success over the years based on the growth plans, size of MVNO, stage of its development, brand, product and market position
  2. hire someone young, enthusiastic, with the capacity and desire for very, very steep learning curves, but for god's sake keep them on track with:
  3. Report on results, this can be growth figures, but also tenure, spend, what customers it attracted. being online and social can help here as the metrics are freely available and easy to process, fixed channels take longer and require full time data crunchers to analyse. Make sure you are keeping churn in check!
  4. re-invest accordingly. A key here is how the MVNO has structured their agreement with suppliers, as if done wrongly, certain types of growth need to be monitored and marketed very carefully as they can cause cash flow issues! I have been asked to assist with MVNOs that have become a victim of their own success, unfortunately it has often been too late...
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