This document discusses how customer value propositions have become strategically important for telecommunications service providers. It outlines the market trends that have reduced the competitive advantage of traditional telecom providers, such as service convergence, the growth of mobile services, and evolving user behavior. As a result, the value has shifted from network infrastructure to the services themselves. The document argues that customer value propositions that leverage a company's brand, billing relationships, customer data and other assets can help service providers develop relevant offers that customers want to buy. It provides examples of effective value propositions and recommends decision-driven marketing methods to create better propositions.

1.
Strategic
White
Paper
Why
customer
value
propositions
really
matter!
Delivering
communication,
IT
and
media
offers
that
people
want
to
buy

2.
www.merkadoservices.com
Executive
Summary
This
fundamental
yet
complex
development
process
must
be
managed
in
a
dynamic
and
Today’s
end-­‐users
have
a
growing
choice
of
disruptive
context,
where
innovation
and
Web-­‐based
services
to
choose
from
to
meet
competition
can
come
from
anywhere,
at
their
broadening
needs.
These
services
are
anytime.
delivered
over-­‐the-­‐top
of
telecom
network
service
provider’s
Internet
access.
As
a
result
In
this
market
context,
Product
and
Marketing
of
the
growth
in
mobile
Internet
services,
leaders
can
improve
their
service/product
evolving
user
behaviour
and
changing
performance
by
executing
key
decisions
expectations,
end-­‐users
no
longer
look
to
better
and
faster
than
the
competition.
network
services
providers
to
fulfil
their
needs
in
areas
such
as
communication,
This
critical,
competitive
imperative
can
be
collaboration,
entertainment,
information
and
systematically
achieved
by
using
a
full
set
of
productivity.
integrated,
decision-­‐driven
go-­‐to-­‐market
methods,
to
develop
and
deliver
more
These
market
changes
have
pushed
the
value
relevant,
customer-­‐driven
value
propositions.
away
from
the
networks
used
to
deliver
This
approach
offers
Product
and
Marketing
services,
to
the
services
themselves,
allowing
leaders
at
service
providers
and
their
ICT
more
companies
to
compete
for
end
partners
several
benefits
including:
customers
using
a
range
of
business
models.
 A
clear,
customer-­‐driven
approach
for
In
a
world
where
the
growth
of
traditional
developing
new
offers
services
is
unlikely
for
most
service
providers,
 A
systematic
way
to
make
quick
and
and
cost
reduction
is
not
enough
to
compete
effective
decisions
resulting
in
better
over
the
long
term,
focusing
on
developing
performing,
market-­‐driven
offers
better,
customer-­‐centric
value
propositions
is
 The
means
to
train
managers
and
staff
in
a
key
value-­‐creation
strategy,
offering
top
and
the
techniques
for
developing
effective
bottom
line
impact.
customer
value
propositions
For
Product
and
Marketing
leaders
at
service
Applied
effectively,
this
methodical
yet
providers
and
ICT1
vendors,
designing
and
practical
approach
helps
service
providers
and
delivering
effective
customer
value
ICT
vendor
partners
deliver
the
service
offers
propositions
requires
a
coordinated
blend
of
that
their
customers
really
want,
in
turn
diverse
skills
and
activities,
working
across
helping
them
achieve
a
sustainable,
organizational
functions,
yet
firmly
focused
competitive
advantage
within
the
quickly
on
customer
needs.
This
involves
leveraging
a
changing
market
for
communication,
IT
and
range
of
inbound
and
outbound
marketing
media
services.
activities,
used
respectively
to
understand
market
issues
and
needs
and
facilitate
the
commercialization
of
subsequent
customer
value
propositions.
1
ICT:
Information
and
communication
technology
Why
customer
value
propositions
really
matter!
2

3.
Table
of
Contents
Executive
Summary ...................................................................................................................... 2
Introduction ................................................................................................................................. 4
Why
are
telecom
service
providers
losing
their
competitive
advantage? ...................................... 4
Service
convergence............................................................................................................................................4
Mobile
services
revolution ..................................................................................................................................5
Evolving
user
behaviour ......................................................................................................................................6
What
are
the
consequences
of
current
market
trends
for
telecom
service
providers? .................. 7
Decline
of
telecom
network
infrastructure-­‐centric
services ...............................................................................7
Commoditization
of
network
infrastructure .......................................................................................................7
Changing
business
models ..................................................................................................................................7
Emergence
of
two
kinds
of
service
providers .....................................................................................................8
Network
communication
service
providers .....................................................................................................8
Specialized
service
providers ...........................................................................................................................8
Why
customer
value
propositions
have
become
strategic?........................................................... 9
What
specific
assets
should
service
providers
use
to
develop
new
customer
value
propositions? .. 9
Company
brand ...................................................................................................................................................9
Billing
relationship...............................................................................................................................................9
Customer
relationship
experience ......................................................................................................................9
Subscriber
data..................................................................................................................................................10
Service
policy
management ..............................................................................................................................10
How
to
create
better
customer
value
propositions? ................................................................... 10
Two
examples
of
effective
customer
value
propositions..................................................................................10
Freebox
Consumer
Triple-­‐Play.......................................................................................................................10
BT
Business
for
SMBs ....................................................................................................................................11
Decision-­‐driven,
go-­‐to-­‐market
methods ...........................................................................................................13

4.
www.merkadoservices.com
Introduction
Why
are
telecom
service
providers
losing
their
competitive
The
total
number
of
mobile
subscribers
worldwide
is
expected
exceed
5
Billion
in
advantage?
2010i
;
having
already
far
outpacing
fixed
line
service
usage.
Despite
a
worldwide
decline
in
Users
no
longer
look
to
traditional
telecom
voice
revenue
due
to
competition
from
low-­‐ and
Internet
service
providers
to
fulfil
their
cost
IP
voice
services,
total
mobile
service
needs
with
specific
services
and
content.
revenues
are
forecasted
to
exceed
$1
trillion
Instead,
they
can
chose
from
an
ever-­‐growing
by
2013ii.
Over
this
period
mobile
data
service
range
of
innovative
Web
services,
often
revenue
are
expected
to
grow
10%
annually,
delivered
“over-­‐the-­‐top”
(OTT)
of
service
reaching
$330
B
by
2013,
or
1/3
of
the
total.
provider
offers,
usually
bypassing
existing
billing
and
customer
care
relationships,
using
While
nearly
90%
of
today’s
mobile
data
only
service
providers’
Internet
connections.
revenueiii
comes
from
basic
Internet
access,
in
a
market
where
both
fixed
or
mobile
Internet
This
shift
in
the
marketplace
is
a
result
of
connectivity
is
less
and
less
differentiable,
various
related
trends,
including:
additional
services
are
what
customers
see,
Service
convergence
what
they
appreciate
and
what
they
really
value.
 Users
have
access
to
a
growing
range
of
services,
from
a
wide
variety
of
Web-­‐
However,
under
the
pressures
of
accelerated
based
service
providers.
Such
services
innovation
coming
from
a
multitude
of
new
cater
to
a
growing
range
of
needs,
services
delivered
“over-­‐the-­‐top”
of
existing
including
communication
(ex.
calling,
Internet
access,
many
telecom
network
messaging;
www.skype.com),
news
(ex.
service
providers
are
finding
it
difficult
to
www.yahoo.co.uk),
entertainment
(ex.
compete.
In
a
market
where
communications,
music,
TV;
www.deezer.com,
IT
and
media
services
are
converging
more
www.hulu.com),
information
(ex.
local
day-­‐by-­‐day,
they
are
now
faced
with
a
information;
www.google.com/latitude),
growing
range
of
non-­‐traditional,
Web-­‐based
personal
IT
(ex.
file
storage;
competitors.
Within
this
context
many
service
www.dropbox.com),
and
work
providers
are
slowly
loosing
their
once
productivity
(ex.
office
documents;
unrivalled,
competitive
advantage.
http://docs.google.com).
Such
services
also
offer
users
a
mix
of
communication
In
this
ever-­‐changing
market,
telecom
service
and
collaborative
elements,
facilitating
providers
who
are
unable
to
find
ways
to
usage
and
interaction
with
others.
differentiate
their
service
offers
by
quickly
and
consistently
delivering
new
and
 Most
services
are
available
“over-­‐the-­‐top”
innovative,
customer-­‐centric
value
of
telecom
service
providers’
offers,
and
propositions,
may
be
relegated
to
simple
are
delivered
using
any
standard
Internet
carriers
of
data
traffic,
while
Web-­‐based
connection.
This
connection
acts
a
direct
companies
capture
the
bulk
of
new
services
channel
to
market
for
the
Web-­‐based
revenue
and
profit.
services,
offering
little
if
any
additional
value-­‐add
from
the
network
service
provider.
Why
customer
value
propositions
really
matter!
4

5.
www.merkadoservices.com
 Underpinned
by
the
Web,
users
can
Figure
1
–
Global
Communication
Subscriptions
access
their
personalized
set
of
services
through
a
range
of
different
device
platforms,
according
to
their
context
and
preferences
at
any
given
moment
or
place,
with
little
importance
for
the
Internet
connection
being
used.
While
certain
network
service
providers
have
tried
to
compete
with
OTT
players,
most
have
had
little
success.
How
can
telecom
service
providers
play
more
effectively
within
this
converging
services
market?
Mobile
services
revolution
 Driven
by
mobile
Internet
devices
like
the
Apple
iPhone,
the
wireless
web
is
reaching
maturity.
This
has
largely
been
enabled
by
a
slick
user
experience,
offering
easy
access
to
a
large
range
of
Internet
‘Apps’
dedicated
for
mobile
use.
As
early
leaders
 The
number
of
connected
devices
is
in
mobile
Internet
usage,
Japanese
mobile
exploding
across
diverse
industries.
Internet
services
spend
grew
28%
yearly
Mobile
Internet
applications
have
between
2000
and
2008.
Their
share
of
emerged
in
areas
like
car
electronics,
spend
on
non-­‐‘mobile
data
access’
grew
transactional
services,
healthcare
and
to
34%
of
the
total,
up
from
15%
over
the
home
appliances.
Morgan
Stanley
(See
same
period.
iii Figure
2)
estimates
that
between
2010-­‐
2015
the
total
number
of
connected
 More
and
more
people
are
adopting
devices
will
exceed
10
Billion
iii,
while
mobile
communications
at
the
expense
of
Ericsson
estimates
that
this
will
grow
to
fixed
line
services.
There
are
already
50
Billion
by
2020iv.
close
to
70
mobile
subscriptions
per
Figure 2: Connected Devices
100
people
worldwide,
compared
to
19
for
fixed
telephony
(see
Figure
1).
By
the
end
of
2010
the
ITU
expected
over
5
Billion
mobile
phone
users
worldwidei.
Furthermore,
in
many
markets
in
emerging
regions
like
Africa,
Asia,
Middle
East
and
Latin
America,
and
in
hard-­‐to-­‐reach
zones
worldwide
where
fixed-­‐line
services
and
Internet
usage
is
low,
mobile
services
will
continue
surging.
Many
people
in
these
areas
will
experience
the
Web
for
the
first
time
thanks
to
wireless
service
access.
Source: Morgan Stanley, Economy + Internet Trends, Apr 2010
Why
customer
value
propositions
really
matter!
5

6.
www.merkadoservices.com
 Mobile
service
innovation
is
accelerating.
services
are
available
on-­‐demand,
in
real-­‐
The
mobile
development
community
is
time,
and
with
low
/
no
sign-­‐up
fees.
wide
reaching
and
highly
active.
The
Apple
 Users
are
actively
creating
and
sharing
App
Store,
which
opened
in
July
2008
and
content
via
the
Internet.
While
the
early
currently
operates
in
77
countries,
now
Web
was
characterized
by
companies
offers
over
185
000
apps
created
mostly
publishing
media
and
advertising,
today’s
by
3rd
party
developers
from
around
the
Web
gives
people
the
ability
to
directly
world.
As
of
April
2010,
users
had
contribute
as
‘creators’
of
content,
downloaded
over
4
Billion
appsv.
Other
personal
opinions
and
other
forms
of
self-­‐
mobile
app
stores
serving
Android,
expression
with
tools
such
as
chat
groups,
Blackberry,
and
Windows
Mobile
devices
blogs,
video
and
photo
sharing
sites,
social
have
seen
similar
growth
trends
on
a
network
services.
This
has
spawned
a
smaller
scale.
mass
participatory
culture
previously
reserved
for
an
elite
few.
 In
an
effort
to
play
a
greater
role
in
mobile
service
development,
a
group
of
leading
 Virtual
interactions
are
becoming
the
global
telecom
network
service
providers
norm.
People
around
the
world,
are
and
equipment
manufacturers
including
growing
accustom
to
interacting
with
Orange,
Telefónica,
Vodafone,
AT&T,
NTT,
others
remotely,
in
personal
and
China
Mobile,
Samsung
and
Sony
Ericsson,
professional
contexts.
This
is
illustrated
by
recently
founded
the
‘Wholesale
the
growing
popularity
of
blogs,
social
Application
Community’
networking
services
(ex.
Facebook,
(www.wholesaleappcommunity.com).
The
Twitter,
LinkedIn)
and
other
collaborative
WAC’s
primary
objective
is
to
establish
a
tools
(ex.
Wikis,
shared
workspaces,
etc.).
simple
route
to
market
for
developers,
in
By
breaking
the
barriers
of
time
and
turn,
providing
access
to
the
latest
and
space,
these
tools
are
changing
the
way
widest
range
of
innovative
applications
people
relate
with
each
other.
and
services
to
as
many
customers
as
possible
worldwide.
 Users
expect
greater
service
customization
and
management.
As
a
Initiatives
like
the
WAC
offer
service
providers
result
of
richer,
more
interactive
services,
potential
access
to
Billions
of
customers
users
have
come
to
expect
open
and
worldwide.
How
can
service
provider
flexible
service
environments
that
can
be
effectively
leverage
their
respective
strengths
tailored,
self-­‐configured
and
managed
by
and
assets
to
improve
their
competitive
each
individual
in
real-­‐time,
in
a
way
that
position?
makes
the
most
sense
to
them.
Evolving
user
behaviour
While
most
telecom
service
providers
already
have
access
to
a
rich
set
of
customer
data
 People
expect
easy
access
to
a
growing
including
user
profile,
preferences
and
range
of
services.
Users
now
have
access
behaviour,
most
have
been
relatively
to
an
ever
increasing
set
of
‘Web
2.0’
unsuccessful
in
launching
or
selling
effective
services
and
applications
via
the
Internet,
Web
2.0
services.
How
can
such
service
fulfilling
needs
such
as
communication,
providers
effectively
deliver
compelling
socializing,
entertainment,
gaming,
services
that
are
tuned
to
each
user’s
evolving
personal
and
business
productivity,
desires,
in
a
profitable
manner?
education,
security
and
more.
Most
Why
customer
value
propositions
really
matter!
6

7.
www.merkadoservices.com
What
are
the
consequences
of
Commoditization
of
network
current
market
trends
for
infrastructure
telecom
service
providers?
While
service
innovation
continues,
supported
by
IP-­‐based
software
Today’s
fast
changing
services
market
has
development,
the
network
infrastructure
been
made
possible
by
the
use
of
open-­‐ used
to
build-­‐out
voice
and
data
transport
standards
software
for
developing
flexible
IP-­‐ networks
has
become
more
standardized
and
based
services,
quickly
and
cost-­‐effectively.
widespread.
As
a
result
of
consolidation
in
the
This
is
pushing
the
value
from
the
network
service
provider
sector,
combined
with
the
infrastructure
used
to
deliver
services
to
the
arrival
of
lower-­‐cost
ICT
network
equipment
services
themselves,
while
allowing
a
growing
suppliers,
network
equipment
revenue
and
number
of
companies
from
all
industries
to
margins
have
fallen,
signalling
its
participate
in
the
value
chain.
This
has
lead
to
commoditization.
a
repositioning
of
many
service
providers
and
ICT
vendors.
In
an
effort
to
further
control
CAPEX
and
OPEX,
many
services
providers
have
begun
These
changes
in
the
ICT
landscape
is
a
result
outsourcing
their
network
operations
to
3rd
of
different
factors:
parties
and
in
some
cases
have
started
sharing
infrastructure
among
each
other.
Decline
of
telecom
network
These
changes
further
demonstrate
that
infrastructure-­‐centric
services
service
differentiation
can
no
longer
be
based
only
on
specific
infrastructure
deployment
Traditional,
proprietary
network-­‐centric
strategies.
services
models
(ex.
IN
services,
PSTN
Voice,
closed
messaging
and
other
data
Changing
business
models
communication
networks)
are
in
decline.
They
cannot
deliver
the
flexibility,
quick
time-­‐to-­‐ New
competitors
–
often
Web-­‐based
market
or
cost
advantages
offered
by
many
companies
or
integrated
hardware/software
open-­‐standards,
software-­‐based
services.
manufacturers
–
are
offering
a
growing
range
of
OTT
services,
supported
by
innovative
On
the
other
hand,
most
OTT
services
are
business
models,
including
white-­‐labelling,
delivered
using
IP
environments
via
the
fee
/
commission-­‐based
transactions,
revenue
Internet.
IP-­‐based
services,
like
consumer
and
sharing,
and
advertising-­‐sponsorship.
business
IP
voice,
related
calling
functions
or
IP
contact
centres,
are
supported
by
a
large
This
growing
range
of
business
models
base
of
developers,
offering
quick
and
easy
enables
the
effective
commercialization
of
evolution,
thus
lowering
operation
and
customer-­‐driven
services
and
applications
by
maintenance
costs.
easily
satisfying
the
varied
interests
of
the
different
parties
involved
while
mitigating
Open-­‐standards,
IP-­‐based
software
has
risks.
With
time,
many
of
these
new
business
become
the
new
fabric
for
service
models
will
become
common
across
service
development.
Service
providers
and
ICT
providers
of
all
types.
vendors
who
cannot
evolve
in
this
changing
landscape
are
slowly
being
marginalized
as
their
services
lose
relevance
in
an
ever-­‐
changing
marketplace.
Why
customer
value
propositions
really
matter!
7

8.
www.merkadoservices.com
Emergence
of
two
kinds
of
service
customer-­‐driven
solutions,
fulfilling
their
providers
clients’
particular
needs.
This
may
require
joint
collaboration
with
any
number
of
As
a
result
of
current
market
dynamics,
relevant,
best-­‐of-­‐breed
service
partners
from
service
providers
are
beginning
to
cluster
into
different
industries,
many
non-­‐technology-­‐
two
main
types:
based,
in
order
to
deliver
the
right
customer
solutions,
in
a
consistent
manner.
This
requires
using
different
business
models
to
Network
communication
service
providers
satisfy
each
party’s
interests,
while
maximising
their
unique
assets.
Where
Providers
of
reliable,
high
quality
network
necessary,
this
also
means
buying
network
connectivity
services
including
proprietary
communication
services
from
other
dedicated
voice,
Internet
and
other
dedicated
data
service
providers,
moving
away
from
such
communications
networks.
Their
focus
is
on
non-­‐strategic
activities.
assuring
a
consistent
connection
for
their
network-­‐based
communications
services.
This
While
traditional
network
communication
includes
guaranteed
service
availability,
services
providers
will
continue
to
exist,
faced
service
coverage
or
any
other
relevant
SLAs,
with
market
changes,
many
will
need
to
related
to
their
network
service
offers.
They
refocus
on
delivering
more
specialized
and
might
sell
directly
to
a
broad
range
of
end-­‐ relevant
customer
value
propositions,
as
a
customers,
including
consumers,
businesses
key
strategy
to
compete
more
effectively
over
or
governments,
or
indirectly
as
wholesalers
the
long
term.
to
other
specialized
firms
including
niche
service
providers
and
large
private
and
public
organizations.
While
some
resources
will
be
dedicated
to
managing
and
developing
their
product
portfolio,
greater
efforts
will
be
placed
on
assuring
operational
excellence
of
their
services
network
in
order
to
assure
high
scalability
and
production
at
the
lowest
possible
cost.
Specialized
service
providers
Providers
of
specialized
services
fulfilling
the
particular
needs
of
targeted
customer
groups.
Specialized
service
providers
will
focus
on
delivering
targeted
and
effective
value
propositions
offering
a
better
customer
experience
through
greater
service
relevance,
simplicity
and
higher
overall
customer
satisfaction.
They
own
or
will
try
to
develop
a
recognized
brand
and
positioning,
customer
relationship,
and
local
and/or
virtual
presences
in
order
best
serve
their
specific
target
markets.
Their
primary
focus
will
be
on
the
development,
marketing
and
selling
of
Why
customer
value
propositions
really
matter!
8

9.
www.merkadoservices.com
Why
customer
value
propositions
problems,
motivations,
expectations,
preferences
and
behaviour,
which
in
turn
have
become
strategic?
conditions
the
solutions
to
these
issues
and
what
they
are
willing
to
pay
someone
(i.e.
a
In
light
of
evolving
user
expectations
and
specialized
service
provider)
to
help
resolve
continued
innovation
in
a
nearly
border-­‐free
them.
market
for
over-­‐the-­‐top
mobile
and
Web-­‐
based
services,
most
telecom
service
While
the
idea
of
developing
more
relevant
providers
worldwide
can
no
longer
rely
only
and
compelling
value
propositions
seems
on
existing
network-­‐centric
services
to
apparent,
judging
by
the
range
of
similar,
generate
top
and
bottom
line
growth.
complex
and
often
technology-­‐centric
Moreover,
for
all
but
a
few
service
providers,
services
in
markets
today,
it
seems
that
focusing
on
lowering
network
delivery
costs
further
progress
is
possible.
through
diverse
outsourcing
strategies
is
not
enough
to
ensure
a
long-­‐term,
sustainable
Finally,
during
this
time
service
providers
have
competitive
advantage.
built-­‐up
a
unique
set
of
assets,
which
must
be
used
to
stay
competitive
when
designing
the
Many
regulators,
which
have
already
allowed
next
generation
of
customer-­‐driven
offers.
infrastructure
sharing
among
network
service
providers
while
forcing
them
to
wholesale
network
access
to
new
entrants,
are
now
pushing
strongly
for
Net
neutrality.
If
What
specific
assets
should
successful,
this
ruling
will
mean
that
telecom
service
providers
use
to
develop
network
providers
cannot
even
receive
rent
new
customer
value
propositions?
for
bandwidth
usage
from
Web-­‐based
content
providers.
Prior
to
the
growth
of
the
Web,
telecom
service
providers
were
the
main
suppliers
of
In
this
context,
Product
and
Marketing
communication
and
IT
services.
During
this
leaders
at
telecom
network
service
providers
time
they
developed
long-­‐standing
customer
and
their
ICT
vendor
partners
need
to
find
relationships,
and
gained
a
variety
of
specific
more
distinctive
and
strategic
ways
to
assets
that
are
hard
to
copy.
This
includes:
compete.
If
growth
of
traditional
services
is
unlikely
and
squeezing
costs
or
claiming
Company
brand
subsidies
is
not
enough,
the
focus
must
turn
 High
brand
awareness
within
current
to
developing
and
managing
more
relevant,
markets,
an
established
brand-­‐promise,
customer-­‐centric
service
offers
as
a
key
an
existing
customer
base
and
a
varying
strategy
to
drive
top
and
bottom-­‐line
growth
degree
of
market
power.
and
re-­‐establish
a
sustainable,
competitive
advantage.
Billing
relationship
 A
trusted
client-­‐provider
billing
This
requires
offering
specific
customer
relationship,
including
existing
real-­‐time
groups
–
for
example
homeowners,
nomads,
transaction
capabilities,
credit
guarantee
grand
parents,
or
control
seekers
-­‐
mechanisms,
purchase
history
and
buyer
discernable
value
through
solutions
profile
data.
addressing
their
distinct
needs
and
issues.
This
is
driven
by
gaining
an
acute
sense
of
Customer
relationship
experience
what
those
people
and
organizations
value,
 An
established,
personal
customer
through
insights
into
their
specific
needs,
relationship
experience
across
a
variety
of
Why
customer
value
propositions
really
matter!
9

10.
www.merkadoservices.com
touch-­‐points,
including
dedicated
strategic
for
business
growth,
yet
it
remains
a
customer
representatives,
retail
stores,
challenge
for
many
Product
and
Marketing
contact
centre
and
customer
Web
portals.
leaders
at
service
providers
and
technology
This
covers
the
personal
relationship
companies.
It
requires
gaining
a
deep
experiences
before,
during
and
after
a
understanding
of
the
specific
problems,
issues
client
subscribes
to
any
services.
It
may
and
needs
of
potential
customer
groups,
in
also
include
a
documented
customer
order
to
then
quickly
design
and
deliver
history
combined
with
an
implicit
effective
customer
solutions
that
offer
clear
knowledge
of
the
local
market
context.
value,
all
at
the
right
time.
What
are
some
examples
of
good
value
propositions?
Subscriber
data
 A
collection
of
customer
metadata
Two
examples
of
effective
customer
including
service
registration
details,
user
value
propositions
preferences
and
profiles,
usage
statistics,
address
book,
geographic
location
(in
real-­‐ Freebox
Consumer
Triple-­‐Play
time
for
mobile
services)
and
purchase
and
payment
history.
French
Internet
service
provider,
Free
(www.free.fr)
launched
its
Freebox
Service
policy
management
broadband,
triple-­‐play
offer
at
the
end
of
 The
ability
to
define
and
actively
manage
2003.
At
that
time,
it
was
the
first
ISP
to
offer
network
policies
(ex.
Uptime
guarantees,
French
consumers
an
all-­‐inclusive
package
SLA
parameters,
traffic
prioritization),
including
unlimited
broadband
Internet
application
policies
(ex.
Allowed
services
(2MB/s
download
/
512kB/s
upload
speeds),
and
options,
service
limits,
other
TV
and
unlimited
national
calling,
all
for
just
conditional
parameters)
and
subscriber
€29.99/mth
(see
figure
3).
This
was
in
stark
policies
(ex.
promotional
tariffs,
usage
contrast
to
the
incumbent
service
provider,
rewards),
on
a
per-­‐customer
basis.
Orange’s
(previously
Wanadoo)
2-­‐8MB/s
broadband
Internet-­‐only
offer
for
€26/mth.
These
assets
are
a
combination
of
hard
and
soft
attributes
and
are
valuable
so
far
as
they
Figure
3
–
Freebox
Triple
Play
Offer
can
be
used
to
enhance
customer
propositions
by
offering
appreciable
added
value.
Using
these
assts
to
create
effective,
customer-­‐centric
value
propositions
can
help
lead
to
more
satisfied
customers
and
greater
loyalty,
helping
to
fuel
business
growth.
The
key
question
then
becomes,
“How
does
one
Free’s
simple,
yet
innovative
offer
quickly
create
better
customer
value
propositions?”
won
over
new
customers
who
were
tired
of
searching
through
a
plethora
of
different
and
complicated
offers
to
get
what
they
needed,
How
to
create
better
customer
while
ultimately
paying
more
for
less.
During
the
first
three
years
they
more
than
doubled
value
propositions?
their
market
share,
mostly
at
the
expense
of
the
incumbent
service
provider
Orange.
Creating
the
product/service
offers
that
people
and
organizations
really
value
is
Why
customer
value
propositions
really
matter!
10

11.
www.merkadoservices.com
By
continuing
to
add
value
to
the
Freebox
BT
Business
for
SMBs
offer
without
ever
changing
the
price,
Free
has
remained
competitive,
winning
new
As
BT’s
channel
to
market
for
small
and
clients,
while
ensuring
the
loyalty
of
existing
medium
businesses
in
the
UK,
BT
Business
ones.
Today’s
Freebox
users
benefit
from:
(http://business.bt.com/)
had
been
under
attack
by
its
rivals
since
competition
began.
 Internet
access
of
up
to
28MB/s
download
During
the
2002-­‐2007
period
its
revenues
had
/
1MB/s
upload
(or
100
MB/s
fibre
access
fallen
by
16%.vii
At
the
time,
this
business
was
in
eligible
zones)
characterized
by
its
supplier-­‐to-­‐customer
 Unlimited
e-­‐mail
addresses
and
10GB
for
push
approach
for
selling
a
range
of
separate,
personal
websites
or
Blogs
technology-­‐focused
communication
and
 Wifi
access
at
home
and
in
Free’s
public
connectivity
services;
the
use
of
a
standard
hotspots
SMB
segmentation
model
that
covered
over
 Unlimited
calling
to
fixed
lines
in
over
100
90%
of
all
UK
businesses;
offering
countries
components
vs.
business
solutions;
a
set
of
 30
supplementary
calling
services
(ex.
underlying
customer
management
processes
voice
mail,
call
waiting,
call
forward)
that
were
heavy
and
time
consuming
to
use,
 TV
features
such
as
DVR2,
VoD3
and
multi-­‐ making
them
frustrating
to
deal
with.
TV
access
In
an
effort
to
redesign
its
SMB
business
to
Maintaining
a
fixed
pricing
strategy
while
offer
greater
relevance
and
convenience,
BT
regularly
adding
service
value
has
required
a
made
a
number
of
important
and
strategic
solid
business
case,
with
a
concerted
effort
on
changes
to
its
BT
Business
offerings.
managing
the
underlying
related
and
overhead
costs.
This
has
been
achieved
by:
 Using
in-­‐house
SW
development
to
create
a
customized
set-­‐top
box,
meeting
market
requirements
and
aligned
with
their
product
roadmap.
 Focusing
mostly
on
a
single
offer,
enabling
Its
new
philosophy
has
been
to
focus
on
the
reduced
marketing
and
support
costs.
distinct
problems
and
needs
of
SMBs
by
 Using
a
direct
distribution
model
including
offering
connected
solutions
with
discernable
online
ordering
and
mail
fulfilment.
value.
It
achieved
this
in
several
ways:
 Delivering
plug
&
play
functionality,
with
remote
software
set-­‐top
box
upgrades
 Demonstrating
a
deep
understanding
of
 Offering
online
and
chat-­‐based
customer-­‐ SMB
daily
business
concerns
through
care
capabilities
where
possible.
insights
on
the
different
aspects
of
running
a
small
business
(ex.
planning
a
Today
Free
has
amassed
4.6
M
clients,
business,
effective
sales
and
marketing,
making
it
the
third
largest
ISP
in
France,
with
dealing
with
suppliers
or
partners,
etc.).
over
23%
of
broadband
market.vi
 Helping
prospective
clients
choose
the
right
offer
based
on
their
practical
needs
(ex.
according
to
their
stage
in
the
business’
lifecycle).
 Focusing
on
selling
business-­‐centric
2
Digital
Video
Recorder
offerings
that
contribute
to
greater
Video
on
Demand
3
Why
customer
value
propositions
really
matter!
11

12.
www.merkadoservices.com
business
efficiency,
(ex.
Website
management,
product
development,
product
consulting,
SEO4
consulting,
CRM5,
e-­‐mail
marketing
and
sales,
all
while
maintaining
a
marketing
services),
described
in
terms
of
common
customer-­‐driven
focus.
the
business
benefits
offered
(ex.
cost
control,
increased
sales)
and
not
the
Effective
Product
and
Marketing
leaders
draw
technology
used.
on
inbound
marketing
activities
for
listening
 Leveraging
ICT
capabilities
themselves
in
to
the
market
to
understand
the
unresolved
order
to
improve
their
customers’
problems
and
needs
facing
users;
to
draft
relationship
experience
through
simplified
customer-­‐focused
solutions
to
these
market
capabilities
like
electronic
contract
problems;
and
to
create
a
coherent
and
signature
and
self-­‐serve
customer
service
detailed
plan
to
deliver
new
offers
to
market,
portals.
Such
changes
reduce
the
sign-­‐up
profitably.
Such
activities
are
usually
the
time
from
weeks
to
hours.
domain
of
Product
Management,
following
 Helping
SMBs
quickly
develop
more
Strategic
lines,
but
working
closely
with
connected
and
efficient
businesses
selected
key
or
potential
customers
and
through
pre-­‐packaged,
Internet-­‐age
Product
Development
functions
to
gather
propositions
like
eShop
-­‐
an
e-­‐commerce
market
requirements
and
test
early
service
/
starters
pack
that’s
integrated
with
e-­‐Bay
product
prototypes.
and
Paypal
-­‐
or
BT
Tradespace
-­‐
an
online
market
place
for
SMBs
to
connect
and
These
leaders
then
use
outbound
marketing
interact
customers
or
suppliers.
activities
to
speak
to
the
market
for
delivering
the
subsequent
customer
value
propositions
These
significant
changes
have
allowed
BT
to
via
their
distribution
organizations.
This
increase
its
Business
revenue
by
1.6%
in
includes
translating
technical
ideas
into
2008-­‐09,
despite
the
recent
economic
relevant
market
messages;
designing
downturn.
At
an
event
in
June
2009
it
customer-­‐driven
programs
to
stimulate
and
reported
+9%
in
Communication
and
support
the
introduction
of
new
offers;
Infrastructure
sales
(i.e.
calling
and
connectivity
making
it
easy
for
potential
buyers
to
make
services),
+19%
in
Hardware
/
IT
/
Devices
the
right
purchase
decisions.
Such
activities
sales
(i.e.
traditional
CPEs,
IT
devices
and
are
usually
the
domain
of
Product
Marketing,
related
maintenance
and
support
services),
in
close
collaboration
with
Communications
and
+100%
in
Software
and
Applications
and
Sales
functions.
sales
(Salesforce.com
and
other
SaaS).viii
This
complex
process
must
also
be
managed
The
Free
Freebox
and
BT
Business
examples
within
a
dynamic
and
disruptive
market
demonstrate
the
top
and
bottom
line
impact
context,
where
innovation
and
competition
that
developing
great
value
propositions
can
can
come
from
anywhere,
at
any
moment.
In
provide
companies.
this
environment,
speed
usually
matters
more
than
perfection.
This
means
quickly
In
practise,
bringing
new
and
innovative
developing,
testing
and
bringing
to
market
offers
to
market,
that
deliver
better
new
product
and
service
offers,
while
leaving
performance,
is
not
easy.
This
requires
a
room
for
constant
improvement
-­‐
incremental
coordinated
blend
of
specific
skills
and
or
disruptive
-­‐
based
on
changing
market
expertise
across
distinct
organizational
conditions.
groups,
including
strategy,
product
Companies
like
Google
with
their
‘Beta’-­‐
Search
Engine
Optimization
4
labelled
services,
and
Apple
with
their
5
Customer
Relationship
Management
Why
customer
value
propositions
really
matter!
12

13.
www.merkadoservices.com
periodic
and
easy-­‐to-­‐use
software
updates,
propositions,
more
often.
This
offers
several
already
apply
this
philosophy
to
their
key
benefits
to
Product
and
Marketing
leaders
products
and
services,
providing
an
overall
at
service
providers
and
ICT
vendors
alike:
better
customer
experience.
 A
clear,
customer-­‐driven
focus
to
design
Ultimately,
a
company’s
Product/Marketing
and
deliver
customer
value
propositions,
structure
will
only
result
in
better
performing
with
a
quicker
time
to
market
offers
if
it
can
make
and
execute
key
decisions
 A
systematic
way
to
make
quick
and
better
and
faster
than
the
competition.
effective
decisions
resulting
in
higher
performing,
market-­‐driven
offers
To
achieve
this,
Product
and
Marketing
 The
means
to
train
managers
and
staff
in
leaders
must
focus
on
the
key
decisions
that
the
requirements
for
developing
effective
lead
to
maximum
value,
and
the
actions
that
customer
value
propositions
follow.
With
a
clear
understanding
of
the
critical
choices
to
be
made,
they
can
decide
Applied
effectively,
decision-­‐driven,
go-­‐to-­‐
where
in
their
organizations
such
decision
market
methods
allow
Product/Marketing
must
be
taken,
to
align
and
adapt
their
leaders
at
Service
Providers
and
ICT
vendors
structures
accordingly.
to
jointly
design
and
deliver
more
relevant,
higher
performing
customer
offers,
more
Decision-­‐driven,
go-­‐to-­‐market
methods
often.
This
will
in
turn
help
them
achieve
a
Whether
we
consider
the
inbound
or
sustainable
competitive
advantage
within
the
outbound
marketing
activities
needed
to
quickly
changing
communications,
IT
and
bring
new
services
and
products
to
market,
media
services
marketplace.
employing
a
complete
set
of
decision-­‐driven
methods
(See
Figure
4)
facilitates
the
strategic
shift
needed
to
develop
and
deliver
more
relevant,
customer-­‐driven
value
Figure 4: Decision-driven, go-to-market methods for delivering effective value propositions
Why
customer
value
propositions
really
matter!
13