TELECOM OPERATOR

Design and launch of a new offering

Our client is one of the major operators on the Nordic telecom market, a market with largely commoditized products and services resulting in pressure on margins. This has led our client to find new ways to differentiate itself from the competition. Differ supported the company with developing a new offering for the B2C market including a launch campaign.

THE BACKGROUND

The telecom market is constantly evolving and has during the last years seen a trend of commoditization and price pressure. This has put pressure on the telecom operators to keep the margins at an acceptable level, at the same time as the possibilities to differentiate the offers and positioning among competitors are decreasing.

To make matters worse, the only brands showing a clear growth trend, are the price pressuring no-thrills brands.

THE CHALLENGE

The client had identified a strategic position to claim in order to differentiate against the main competition but needed assistance with optimizing the offer design. The challenge was to ensure including the main strategic product components creating the most customer value, while cutting out the costly parts with less significant value for the customer.

Another challenge was to determine if the upside of the project was large enough to invest a major share of the IT resources in.

The final challenge was how the product should be priced. Would the most profitable offer be to include the service in the base offer and thus increase the sales volume due to a more competitive offer. Or should the increased value of the offer motivate a higher retail price?

OUR SOLUTION

Together with the client, we went through a process of analysis, market research, strategic discussions and lessons from previous product launches, in order to put the strongest possible version of the case on the market.

In short, the process was the following:

  • Gathering intelligence of performance and lessons from similar products in other markets
  • Analyzing the potential cost and revenue structures of the concept
  • Determine the offer design and configuration options based on the profitability structure
  • Market research including a conjoint study to assess the strength of each product design, the price sensitivity and what option was estimated to generate the highest profitability

While all this was critical for a successful project, the single most important factor in order to deliver a successful project to the market with a minimum of technical investment and lead time, was to cut out the “long tail” requirements, with only marginal business impact.

We conducted a workshop where we asked ourselves what we had to do if we were to cut the project time by 1/3. The result was to cut out the parts that required a lot of resources, while not affecting the customer experience or the business case.

It turned out, all affected departments had scoped in and added time-margins, extra safety features, beyond-the-core-functionality etc. In hindsight, none of the features scoped out has been missed since the launch.

The project followed up by KPI’s directly linked to the Business case, so we had a direct feedback loop of how well the estimations and assumptions of the business case correlated with the actual realizations. The client could then easily determine what deviations in KPI’s were critical to address ASAP and which ones they did not have to worry about.

THE RESULT

In the end, the value of the strategic product launch was three-fold:

  • The claim of a new market position, where competition was marginalized due to significantly weaker offers
  • Significantly improved the share of high-margin product sales
  • Showcased the strength of product value differentiation in a commoditized market as telecom, confirming the benefit of a value-differentiated offer strategy

INCREASED RETENTION

INCREASED SALES

INCREASED BRAND AWARENESS

Want to know more?

If you would like to know more about the project, please contact us.