The communications ecosystem is producing some of the UK’s most relevant brands, according to Prophet’s Brand Relevance Index 2016 .
The most relevant brand to UK consumers – Apple – gives us devices for people to contact one another, as does the 7th most relevant brand, Samsung. Coming in at number 6 is WhatsApp, a next generation messaging system for people to communicate with one another across the globe, and brand number 2 Google is, among other things, the yellow pages that allows us to navigate the world of today.
So we have the hardware, the applications and the content provider. But wait: aren’t we missing a key component of the communications ecosystem? The one that actually makes it all happen through their infrastructure, who bills the customer every month, who spends heavily on advertising to make us choose them, who has retail stores across the country and ultimately, the one that used to own this space: the carrier?
Telco Brands Need to Stay Relevant to Be Competitive
For carriers, staying relevant is becoming even more important, as the boundaries between what different brands in the ecosystem provide is seemingly less clear to consumers – and these new digital and highly relevant brands will be in an optimal position to cannibalise the business of the telco carrier.
Coming in at number 64, the highest ranked carrier in the UK is O2. Then we have EE (75), BT (91) and on and on, until Talk Talk at number 228 in the list of brands that are relevant to British consumers. It is clear that consumers don’t feel that these brands are very relevant, especially in relation to the much higher ranking brands in the rest of the communications ecosystem.
However, this is not a situation singular to the UK; it is similar in the US, where the first telecommunications brand in the index is Verizon at number 150, and in Germany, where T-Mobile sits at the top at number 78. Therefore, the lack of relevance within a very relevant ecosystem seems to be a global issue for telco carriers.
Telco Carriers Lagging in Customer Obsession
According to our study, telecommunications carriers in the UK do receive high scores in attributes related to pragmatism, which includes statements like “is available where and when I need it”, and “makes my life easier”, which speaks to the reach of the network. But when we look at the key drivers for relevance to consumers in telecommunications as a whole, we find that attributes related to customer obsession are actually considered the most relevant, with statements such as “I can’t imagine living without it” or “makes me happy” coming out on top. It’s in this area that the performance of telecommunications carriers is poor.
The reason for telco carriers failing to be considered relevant is clear: they excel in areas which are not as relevant for consumers anymore, and are falling short in the areas that are driving relevance. They are not delivering on the customer-centric experiences that today are demanded by consumers.
This is probably due to intrinsic aspects of their business, such as legacy processes and systems that need to handle millions of daily operations – generating a good number of mistakes that frustrate customers.
On top of this, the traditional organisational model present in these highly corporate organisations probably prevents rapid change, which makes the customer experience obsolete – especially in contrast to some of the new players of the communications ecosystem who are much more agile.
This lack of relevance is observed across the board in other service industries, where the lack of customer-centricity makes them provide an erratic service across the different touch points; which is probably why we don’t see many brands from traditional service-oriented businesses such as banking and insurance at the top of the ranking. As an example, consider that the most relevant financial services brand (PayPal at number 25) is also a disruptor of the traditional models of that industry.
Telco Brands Need to Innovate in a Different Way
In addition to their lack of customer-centricity, carriers seem to have lost the battle of innovation. Even though it is a fact that they invest heavily in network technology, the consumer-facing nature of the other types of business in the communications ecosystem is seemingly diminishing the innovation equities of telecommunications carriers, with consumers seeing much more clearly the innovation in a new application than in a fibre cable.
Despite this negative perception of carriers, we do need to consider that performance is not equally negative across all brands, as the 64th position of O2 vs. the 171st of Vodafone shows. This is driven by better performance in some of the key 16 attributes that consumers have told us drive brand relevance.
This is also mirrored within other industries that have similar intrinsic characteristics to telecommunications which often make it hard to deliver a great customer experience, such as financial services, banking and airlines. We see brands like British Airways, Visa and Nationwide that have been able to break the negative dynamics of their respective categories, which is highlighted by them making the top 50 relevant brands in the UK.
Therefore we know there is the opportunity for telco brands in the UK to understand what is really relevant for their customers. However, it looks like the more traditional drivers on which they have been focusing are no longer considered relevant, and among other things, a more customer-obsessed brand is required.