Blog

Planet MVNO - where innovation isn’t just another word...

You are here

Differentiation - The key to an MVNO's success
Planet MVNO - where innovation isn’t just another word...

Down in the undergrowth, something interesting is stirring.

Looking at the websites and advertising of the major mobile operators it would be easy to get the impression that little about the customer proposition has changed over the last 20 years. Sure, the colours are brighter, the interface is slicker, the branding is jazzier, but scratch the digital surface, dip below the home screen and very little has changed. Choose from a bunch of phones or SIMs, some kind of bundle of calls, texts (yawn) and data, a handful of contracts, and sign up. Job done. See you in two years. Oh, can we sell you some insurance?

But almost unseen, under the radar, companies are emerging that seem to think the consumer experience of telecommunications doesn’t have to be this way.

Visit Giffgaff, for example – you’ll have to do it online because there is no high street presence at all – and the experience is immediately different. Sure, it’s a bit new-age, a little bit hipster, but there’s an overwhelming sense that this is a company that’s focused on you, the consumer. The customer. Or more accurately, ‘the member’. Because when you join Giffgaff you’re joining a club of other Giffgaff members (don’t say ‘subscribers’) that can provide you with advice, support, tips and more. Less a mobile network, more a – remember where you heard this first – social network.

When you join giffgaff, you’re also by implication joining a collective of individuals – key word – who have seen the light and have moved beyond the big brands, the glitzy high street stores, the call centres. These are not numbers - these are cool people. This is not a cheap phone company - this is a cool place to be. Join giffgaff and you’re part of an exclusive tribe, with something interesting to talk about (and by extension promote) in the pub or the expensive coffee shop. Recruit your friends and you get some pretty good rewards (there are people out there making a living out of it, though they don’t call themselves ‘resellers’). Rather smartly, ‘NPS’ is built into the business model.

Similarly with iD. It’s a phone company, but it’s setting itself up as something different. ‘Individual’ is a key word on this site too, and there’s a clue in the brand. Not quite such a social concept as giffgaff, iD prides itself on short contracts, flexibility, not tying the customer down, letting you choose.

Of course, giffgaff and iD and many emerging ‘new age’ service providers are businesses (many have big telcos behind them). They still have to buy and sell phones and services, they still have to turn a profit. Everything they do is tied in to a carefully thought-through business model.  The fundamental things still apply. But some fundamentals are different with these companies.

They’re MVNOs for a start – virtual operators. They’re working to tight margins – the gap between the wholesale cost they can get from the operator and what their market will stand – a gap that will continue to narrow unless something can be introduced to prop it wider.  And that creates a pressure that really makes a company think about what the consumer wants, and to find something that will genuinely differentiate them from existing mass-market service providers. And, less sexy but just as important, something that will keep the expensive costs of marketing and support down.

Importantly, MVNOs don’t have an ‘inertia cushion’ of legacy customers. They tend not to have a lot of enterprise customers who don’t look at their bill from one year-end to the next. The MVNO’s customer tends to be a consumer, highly aware of their bill, highly sensitive to what’s creating overage charges on their bill (and how to avoid those charges), alive to deals and OTT services that will save them money and make their life easier and cheaper. So an MVNO consumer will switch providers if the service doesn’t suit, will switch off the phone to avoid expensive roaming, will use Skype, snapchat, WiFi calling or just not use the phone at all if they don’t need to - whatever will minimise the bill. If you’re an MVNO, you need to be alert to all this, and to recognise that loyalty is hard-won and easily lost. Monitoring customer behaviour and being alert to the alternatives available to your customer – sorry, ‘member’ – is a 24 hour, real-time job. 

Nonetheless; differentiation is possible, and it is happening. If you want to see a switched-on consumer base and (by extension) a really customer-aware service provider, maybe the high street is the wrong place to look. Check out a successful MVNO and find out how they’re playing to their highly demanding market. And check out more about smarter customer engagement here.

Blog Author

Robert Machin
Marketing Consultant

Share This Blog Post