The telecommunications industry seems to know little about critical audience. The industry is very good at tossing out acronyms. The latest beings VoIP, fixed wireless and VAS. Everyone is talking about them.

Truly these services promise great features, lower costs and easier management. But is anyone out there listening to the market? If you ask a small business owner what type of telephone system they have and why, most likely the answer will be, "I do not know."

Offering the correct systems and services to certain segments would make all the difference to telecommunication companies' prospects. It's time operators focused on consumer needs and concerns as opposed to the broad market.

Operators should recognise that it's hard to serve all customers in the broad market. The customers are too many and diverse in their buying requirements. There is need to identify and profile distinct groups who might require separate products and/or marketing mixes.

Specific segments

The fixed-line providers, for instance, need to identify particular segments needs and concerns, and then market specific services tailored for them.

Customer needs aren't uniform and differ greatly according to the respective sector in which they operate. For too long telecos have been focusing too much on large corporates and treated small and medium-size businesses and residential customers as if they have the same needs.

Some segments may require higher grades of services and are a lot more diverse than others. At the moment, small office home offices (SOHO) are not being adequately serviced.

Commercially speaking, it is not wise to treat the segments the same. There are other factors that need to be addressed as well, like having in place a strong vendor and local reseller alliances. This would ensure that rolled-out services run smoothly and end-users will be reassured that there's someone nearby if any technical problems occur.

Customer segmentation demands understanding the lifetime value of a customer. Once this has been established, operators can then determine how much service and support to provide to each segment. They can also select the most appropriate programs based on the customer's value to the company, likelihood to defect, and probability of positive response.

Strategic advantage

Segmenting the market would help in making decisions on each customer group: what products/services to offer, at what price, how to serve the customer etc. Such decision-making is possible only if accurate and constantly updated information is available.

Armed with this information, the operators can identify where value truly lies. Insightful analysis can help them take advantage of the market segments that offer the greatest potential in an effort to increase revenue and gain a competitive advantage.

A comparable point is in the banking industry, where the "scoring" helps to segment the customers and proposes new and profitable services to them. Banks particularly have looked at behavioural issues as opportunities to optimise customer lifetime value.

Proper segmentation would give any operator a unique strategic advantage. It is also a very valuable asset that telcos have certainly to capitalise if they want to survive in liberalised markets. The way customer information is stored, organised, accessed; analysed and explored will be critical under the new competitive market.

Ultimately, the ability to hold on to customers while rolling out new technologies will depend on understanding them at a more fundamental level beyond the basic demographic segmentation. Telecos also need to understand how customers relate to technology.

In these times when telcos are looking far and wide for growth opportunities, they need to understand what their customers want, how to deliver it and how much it costs the company. To a chive this, you a reliable segmentation management solution that divides users into groups. It's only when operators understand common characteristics or behaviours of these groups that they will effectively customise their strategies and offerings.

Ms Wangui is a telecom strategy analyst

Distributed by AllAfrica Global Media. (allafrica.com)

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