Thursday, January 18, 2007

Niche and Easy does it

The profile we produced of Cable & Wireless' customer base last month caused a bit of a stir.

As promised here is the THUS Profile. Bar Chart

The data were part of a wider project we undertook into how ISPs and Telcos market themselves, the impact that has on their customer base and how it defines the way they need to organise themselves operationally to support their customers most profitably.

Dry I know, but it has long been understood that most succesful companies fit into a niche. You don't want to waste money promoting super resilient VPNs to the finance industry, if your main business is selling masses of DSL to SMBs, or outsource third line support to Elbonia if your customers are 24x7 city dealing rooms.

Our research underlined some simple truths: Incumbent BT are present and perform well across the board; PIPEX are the boys to beat in mass market business DSL; THUS have a good cross section of customers but excel in the lower mid market, C&W are very strong in high value UK based upper mid market and notable major accounts; Verizon are historically embedded in high value major accounts where there is a strong international element, and whilst AT&T have a relatively small number of UK accounts - boy are they the cream.

The growth strategy for these companies is to play to their strengths, to structure the core operations of their business around retaining a core portfolio of profitable clients, serve them effiecently, whilst shedding / avoiding those who could be drain on resources. We call it Yield Management, it's what C&W are trying to do, it saved the airline industry can it save telco?

So what about everybody else: we identified 175 notable ISPs in the UK survey. Big, or small these companies need to know who their customers really are, and focus their whole business behind that position. Those who can't or won't might as well get their coats now.

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