Updated on 16/01/2023
Introduction to customization in the telco industry
In the telco industry, personalization is essential to remain competitive in the market and benefit from future technological innovations. However, personalization is not easy: investments, a change of mentality, and above all, the right partnerships are needed.
In the telco industry, personalization is only one of the possible strategies to make your business more competitive, but it is a real necessity. As one of the most important sectors for Italy and for any Western country, the telecommunications industry is experiencing one of the most delicate moments in its history, where digital transformation is changing the rules of the game.
For this reason, personalization is proving to be a winning approach, both in the telco context and in all other relevant sectors of the economy.
A closer look at the telco industry in Italy
However, before we go any deeper, let’s look at the health of the Italian telco industry, starting with the numbers.
According to the Experian 2022 Report, 66% of telecoms providers are focused on revenue growth, digital transformation and better fraud prevention, while 55% of the priority is to accelerate the decision time in customer onboarding processes.
The key to achieving these goals will be how providers use data, with 66% exploring non-traditional data types, such as open banking. In addition, two thirds of companies (66%) are specifically focusing on better use of internal data to improve operational performance. A potential critical element, on the contrary, is the lack of ability to identify and direct potential customers, highlighted by 29% of total respondents in EMEA, 38% in Italy.
This situation was caused by a very common phenomenon in Italy, which has been particularly evident in recent years, namely the so-called “tariff war”.
In fact, to attract as many customers as possible, operators have preferred to focus on the progressive and constant reduction of prices and tariffs rather than working on the type and level of digitization of services. This is paradoxical, if we consider that telco operators would have what it takes to really become the standard bearers of technological innovation, implementing all the main solutions made available by digital transformation. Also because, on closer inspection, it is precisely telecommunications services that best lend themselves to constant innovation in order to meet the needs and requirements of an increasingly connected and demanding consumer base. Instead, the sector decided to follow a decidedly conservative approach that reduced revenues, thanks to the decrease in revenue from the sale of data packages that continued, in contrast to other utilities (tpi.it).
The new competition
And while the industry is not fully open to innovation, there have been new players who, using the weapons provided by digital transformation, have managed to corner the telecommunications giants.
The reference, in this case, is to the OTT or Over The Top, which indicates those distribution platforms that do not have facilities or dedicated networks for the transmission of their content, but which, on the contrary, have developed a technology capable of operating over the network.
The most famous examples are Whatsapp, Telegram, Skype, and Viber.
Thanks to their agile and their distinctly digital nature and s a very aggressive strategy, the OTTs have imposed themselves on the market without the need for special infrastructures to provide their services, but still managing to offer users services and products that are more in line with their expectations, thus taking more and more market shares away from the telco. Among other things, their rise has been so penetrating and irresistible that it has imposed a business model within the telecommunications market that had been unprecedented until then and which has placed traditional players in further difficulty. While the traditional telco companies have continued to try to increase revenue, also to sustain the considerable costs of operation and maintenance of the infrastructure, these new competitors have instead imposed the so-called freemium model, which is based on the free offer of many services, which can be enriched by additional elements under a paid version.
Inevitably, such a development model has put a much more conservative business like that of traditional telco in difficulty. This is also because, thanks to this model, the OTTs were able to increase their members very quickly and collect a large amount of data.
Such data can then be sold, or, more often, can be used to study and increase information about users, so that they can further improve their services and thus develop packages and offers that increasingly are in line with the expectations and needs of customers.
In a word, they are using personalization to be more competitive both in the market and in terms of quality of service that they are able to offer customers.
The importance of digital transformation
The point, then, is precisely this: as we said at the beginning, personalization is no longer an option, but rather the most relevant and most effective strategic option. However, in order to do this, it is necessary for Italian telcos to change their approach and, above all, their mindset regarding digital transformation, especially now that some relevant innovations are coming. Just think of what is happening with the arrival of 5G technology in Italy.
This innovation represents a considerable growth opportunity for traditional players, provided that they make the right investments and have the courage to embrace transformation.
Also because, according to many experts, 5G offers the opportunity for Italian telco players to become competitive again and to respond effectively to the OTTs, which have cannibalized the market in recent years. In this sense, the most important priority for traditional players is to update their IT infrastructure and expand their operations, even if this involves a major capital investment (agendadigitale.eu).
Telcos need increasingly close collaborations with major global technology providers to manage their network upgrades and IT infrastructure so that, when 5G is implemented and available, they can offer services that are as good as OTTs and that meet customers’ wishes.
First digitize, then personalize
The premise, therefore, to improve its offer is to embrace digital. However, this is only the first step of the transformation. The real competitive advantage that telco has over its competitors, in fact, lies in the relationship with customers.
On closer inspection, all of these companies can count on a significant advantage, and that is their customers, the data on which contains their history, characteristics and, indicators of what they need. For each customer, therefore, the company is able to create a package of innovative and highly personalized services that meets the needs of individuals. We can therefore say that both digitization and personalization in the telco industry are useful for improving the relationship with consumers, thereby increasing retention.
Moreover, many observers have pointed out that in the future, telcos will have to focus more and more on the quality of the relationship with their customers in order to remain competitive and really benefit from 5G. For example, according to Oliver Wyman, a global consulting giant with offices in 30 countries, telecom companies will have to aim to create a strong emotional bond with their customers, formed by personalization and trust, in order to reduce the competitive gap with OTT. “Pricing aside,” the company recently said, “telcos should also do more in terms of contract flexibility and data security, which should become a key component of the various operators’ proposal, given that one in four people are concerned about it.
The path, then, is clear, but how can it be followed effectively?
Personalization in the telco industry: the example of Fastweb
The best answer to such a question is a practical case like that of Fastweb.
This case study shows how the challenge of digitization and personalization in the telco industry can be faced and won. That’s not all. It is also important because Italian telecoms have operated doing exactly what was described above. Instead, Fastweb has changed its approach to innovation, and then it has established winning partnerships to ensure the digitization and personalization of its products.
For example, it has entered into a partnership with Microsoft to offer schools a completely digital service, one that is easy to implement, offers native support, and at the same time, guarantees maximum security for customers (fastweb.it). In this way, the company has been able to start a serious repositioning activity, thus carving out a leading role in the digitization sector (key4biz.it).
As far as the personalization of its services is concerned, Fastweb has been able to count on the skills of Doxee, which has provided it with innovative products, such as Doxee Pweb® and Doxee Pvideo®.
The personalized video for an unforgettable Customer Experience
With the first product, Fastweb has created a hyper-personalized portal where customers can access their data, view their invoice, and check their subscription details. With Doxee Pvideo®, the company has done something even more surprising: it has created an attractive and engaging communication using an absolutely unusual input: billing.
As a first step, Fastweb digitized the monthly bill so that it could be emailed to customers. Secondly, thanks to Doxee Pvideo®, Fastweb turned these bills into a highly personalized video in which the customer could find not only the report information, but also a whole series of offers and promotions specifically designed for him/her on the customer journey.
The advantages of a hyper-personalized video
The positive results of this collaboration were largely linked to the characteristics of the chosen means of communication, the Doxee Pvideo®, which allowed Fastweb to reach its customers through a truly surprising type of content.
The recipients found themselves at the center of an immersive and highly personalized experience where the video was directly addressed to them and gave them the opportunity to navigate through it, choosing from what to see and where to go next. Doxee Pvideo®, in fact, allowed Fastweb to create a personalized narration thanks to the Dynamic Storyboard, with which each user can modify the narrative flow of the video content according to the choices he makes while viewing. In short, the maximum customization.
By choosing this tool, Fastweb has obtained several advantages.
First of all, it made its communication more effective by succeeding in creating truly relevant content, able to stand out from the large amount of information that bombards consumers every day. Secondly, it has shown attention to its customers, reaching each one of them with a perfectly tailor made offer: this has a considerable positive impact on customers’ perception of the brand, as well as its ability to create and strengthen the loyalty relationship with them.
Last but not least, this innovative approach makes it possible to create performance oriented marketing strategies, since it is possible to customize the video with CTA specifications (to push a loyalty campaign or to support cross-selling and upselling activities), which can be activated without having to leave the video. All of this is achieved while putting the customer at the center, not only of an offer but of the entire business model.