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SME Market Distribution Strategies and Best Practices

This study examines the strategies of mobile operators in various countries and identifies trends, innovations and best practices in SME market distribution.

Our research reveals 7 key challenges that mobile operators face in their efforts to drive increased ARPU, profitability, customer satisfaction and retention. These challenges are highlighted below. The key initiatives operators are undertaking to address these challenges are presented in detail within the body of this report.

• Evolving distribution structures and channel mix:
Leading operators are increasingly utilising alternative channels-to-market to attract new customers, churn other customers and sell into specific vertical markets such as IT providers, Value-Added Resellers (VARs), and application service providers. Several operators are bringing major indirect dealers in-house to offer improved service to high-value customers, and there is increased focus on building a data-focused distribution channel.
• Understanding the customer better through segmentation and solution sales
As mobile products and solutions become more complex best practice operators have, or are in the process of, transitioning from a product-centric strategy to a solution-centric one. In addition, operators increasingly rely on a vertical focus to understand customer needs and target solutions better (e.g. transportation, financial services, etc).
• Building partnerships and outsourcing relationships
Best practice includes using partners and alliance partners who are close to customers to lead or jointly lead the sales process for some high-end customer sales. There are different tiers of partner, ranging from strategic partners to application development partners. As in the consumer segment, operators are increasingly exploring options to outsource additional functions to third parties. Most operators start with product distribution as the first step in the outsourcing process.
• Multi-Component Commission Structures
Commissions are evolving to include a number of components. The commission structures identified may be classified into the following categories: upfront; activation; volume of connections; percentage of airtime; customer tenure; upgrade; channel type; churn performance; type of handset; contract length. The commission structures vary along the distribution chain, with distributors determining dealer eligibility for particular commissions and applying them appropriately.
• Empowering the sales force
Best practices include deploying a number of initiatives to empower the direct sales force and independent dealers. Key initiatives include: sales tools to assist across different stages of the sales process; training that focuses on consultative selling and understanding customers' requirements; channel management programs that provide support and funding based grading schemes; and online dealer portals to provide easy access to relevant tools, training, and customer data.
• Empowering the customer
Best practice operators are deploying a number of initiatives to empower the customer to make purchasing and account management decisions. Key empowerment initiatives include: online activation & purchase tools; self-management tools for telecoms managers/administrators and end-users; pre-sales and post-sales tariff optimisation tools to help organisations subscribe to the most cost-effective tariff(s); and communities and forums to allow users to find answers to their questions quickly and effectively.
• Developing initiatives to drive SME customer loyalty
Loyalty schemes are being targeted at both decision makers and end-users to encourage subscriber adoption and retention of high-value SME customers. Decision maker schemes include network guarantees and financial incentives. End-user schemes tend to focus on reward points that may be redeemed by the mobile operator or affiliation partners.

Price: EUR 2,500.00 / GBP 2,000.00

if you would like learn more about this report, or our other work in this topic area and how to subscribe, please contact us

1
Overview
1
2
SME Findings: Key Themes and Initiatives
3
2.1
Key Distribution Challenges and Themes
3
2.2
Evolving Distribution Structure and Channel Mix
5
2.2.1
SME Traditional Distribution Channels
5
2.2.2
Emerging Distribution Channels
6
2.2.3
SME Channel Mix
7
2.2.4
Indirect Sales Channel Acquisition
8
2.2.5
Building a Data Focused Channel
8
2.2.6
Developing Cost-Effective Channels
9
2.3
Segment and Solutions Focused Sales Strategy
10
2.3.1
Overview
10
2.3.2
Simple and Complex Sales Processes
10
2.3.3
Vertical Market Focused Sales
12
2.4
Building Partnerships
13
2.4.1
Types of Partnership
13
2.4.2
Nextel Partnership Case Example
14
2.4.3
Orange Partnership Case Example
14
2.5
Operator Outsourcing Initiatives
15
2.5.1
Outsourcing Overview
15
2.5.2
Key Outsourcing Players
15
2.5.3
Outsourcing Deep Drill and Emerging Trends
15
2.5.4
Key Drivers and Benefits of Outsourcing
17
2.5.5
Key Pitfalls of Outsourcing
17
2.5.6
Alternatives to Full Outsourcing
17
2.6
Multi-Component Commissions Structures
18
2.6.1
Commission Structure Overview
18
2.6.2
Key Trends
19
2.6.3
UK Market Case Example (O2)
20
2.6.4
Australian Market Case Example (Optus)
21
2.6.5
Non Traditional Commission Payments
21
2.7
Empowering The Sales Force
22
2.7.1
Overview
22
2.7.2
Sales Tools
22
2.7.3
Optus Case Example
24
2.8
Channel Management Programs
24
2.8.1
O2 UK Case Example
24
2.8.2
O2 Ireland Case Example
25
2.8.3
Orange Case Example
25
2.8.4
MTN Nigeria Case Example
25
2.8.5
Dealer Portals
26
2.8.6
Training
27
2.9
Empowering Customers
29
2.9.1
Overview
29
2.9.2
Online Activation and Purchase
29
2.9.3
Self-Service Portals
30
2.9.4
Tariff Optimisation
31
2.9.5
Online Communities and Forums
32
2.10
Enterprise Loyalty Development
33
2.10.1
Telecom Managers and Purchasing Decision Makers
33
2.10.2
End-users
34
3
The MVNO Landscape
35
3.1
MVNO Overview
35
3.2
The Typical MVNO
35
3.3
Threat or Opportunity?
38
4
Key Conclusions
39
4.1
Evolving Distribution Structures & Channel Mix
39
4.2
Better understanding the customer through segmentation and solution sales
40
4.3
Building partnerships and outsourcing relationships
40
4.4
SME Commission Structures
40
4.5
Empowering the sales force & Channel Management
41
4.6
Empowering Customers
41
4.7
Loyalty Initiatives
42
4.8
The MVNO Threat
42