A new report from TARIFICA, the telecoms pricing practice of The Phillips Group and the London Business School’s dConsulting, warns European telecom service providers that an “excessive focus on price” is undermining brand value, a key performance indicator for equity analysts.
The findings of Competition Beyond Price - The Branding Challenge, is the result of qualitative research with buyers of telecommunication services across Europe, case studies, and a critique of how the industry serves its customers, in order to identify the drivers for purchase decisions.
Brand is revealed as a key differentiator and the single most critical challenge confronting telecommunication players.
This timely report reveals that excessive focus on price evidenced across Europe and beyond, undermines brand and documents “significant shortfalls in telcos’ performance” in this area.
· Corporate customers interviewed tended to fare better through the specialist knowledge available to them, and an ability to distinguish supplier offerings.
·SMEs on the other hand, were found lacking in the expertise needed to assess competing offerings or even their own needs. Service providers were found lacking in relating to the variety of industries forming the communications dependent SME segment.
·The customer service experience of residential users is also addressed in the report and highlights a group of fixed line and mobile customers who now change operators frequently.
Pricing continues to be used as a tool in managing relationships with each customer segment and the report identifies an industry predisposition to do so. However, a proposition based on price for a standard service is easier to communicate than one relating to the individual needs of a high number of customers.
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