Strategic segmentation in the telecom industry

Having met several chief executives individuals during the last five
days in South Africa, I got insightful feedback on one of our core
business lines in most of the current engagements in mobile
operators across Europe and Africa: Strategic Segmentation.

While these managers told me that they were always jumping on

the bandwagon to try the latest and greatest management tools,
they never leveraged on what I think isone of the most powerful
strategy development tools: customer segmentation.

Customer segmentation has been around forever, and many

companies have used it as a marketing tool. But in our experience,
few get the bottom-line results that they should. And since most
agree that all elements of a good strategy—from product design to
pricing to distribution to competitive positioning—should in some
way derive from the goal of meeting the key requirements of target
customers, customer segmentation itself is a critical tool for
strategy development. Why, then, do many companies not see
bottom-line results?

Most often it is because the output ends up being interesting but not
actionable, or the results are used only for limited marketing
purposes, not as a strategy tool to guide the entire organization.

Segmentation divides customers into groups based on the

underlying needs or characteristics driving their purchase decisions.
Truly distinct customer segments respond to different value
propositions and require different strategic approaches.When
properly used, segmentation helps to allocate resources throughout
all levels of the operator to create value propositions that uniquely
serves the target client’s clusters.

Customer segmentation is at its most powerful when used as a

fundamental part of the strategic process, instead of just as a
marketing tool. A sound segmentation allows operators to choose
from the vast spectrum of potential clients and focus on the distinct
clusters that the operator is best suited to serve. After aligning the
organization to serve these clusters, the marketing departments will
be able to define a differentiated and defensible value proposition
which its competitors will have difficult emulating.

Nice reading

Best, CVA. Flying from London to Madrid