Customer Acquisition & Growth Telco
December 21, 2023

Customer Acquisition Strategy in the Telecoms Industry

Customer Acquisition Strategy in Telecom Industry

In our latest blog post we take a look at customer acquisition strategies in the telecom industry. Like all other sectors, telecoms has its fair share of key challenges. Yet to thrive and grow in the long term, businesses need effective customer acquisition strategies. 


Segmentation, a multi-channel approach, and personalisation are just a few examples of strategies that businesses can implement to improve acquisition. Alongside these, we will cover another five essential strategies that you should use, as well as how to optimise your sales funnel. We’ll also go over key metrics and KPIs and case studies showing effective customer acquisition strategies. 




Contents:

 

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See how your business shapes up in dynamic markets with evolving consumer expectations and fiercer competitors. Take the Telco health check to see the strength of your pull and ability to keep customers for the long term. 

 



 

Importance of Effective Customer Acquisition Strategies in Telecoms 

Attracting and retaining new customers is a critical part of running a sustainable, long lasting business. However, gaining new customers has never been more expensive. This is because markets are overcrowded. Consumers have never had so much choice. Businesses need to stand out from competitors to capture the attention of potential leads. 

 

  • 40% of marketers say a limited budget is their biggest obstacle for getting new clients or customers. 


Without an effective customer acquisition strategy the costs of gaining new customers could spiral out of control. What’s more, retaining customers and nurturing their loyalty eventually improves acquisition. As the customer journey with your brand becomes more meaningful, customer satisfaction increases and manifests into brand advocacy. 

 



Key Challenges in Telecoms Customer Acquisition

Telcos face challenges that will be familiar for many other B2C businesses – delivering hyper-relevant, highly personalised digital experiences. These must add tangible benefits and ancillary value. 

One way to do this is to offer an enhanced customer experience that increases value propositions and attracts more customers. However, this could be difficult with the following challenges rife in the industry. 

 

1) Competitive market dynamics

The competitive dynamics of today’s markets pose a serious acquisition challenge for telecom firms. Numerous providers vye for market share, navigating pricing wars, service innovations and customer retention strategies to reduce churn. These nuances increase the complexity of the already arduous task of differentiation.

In addition, telecom customers tend to have a high tendency to switch between different providers. Prices, data plans and customer service are some of the main reasons behind these churn rates.

Attracting and retaining customers in fiercely competitive market dynamics call for rigorous adaptation, technological advancements, and strategic agility. Together, these can help telecom companies carve a distinct brand identity amongst competitors. 

 

2) Changing consumer behaviour and expectations 

Demands for seamless connectivity, personalised services and game-changing innovation directly influence consumer behaviour. As we’ve already seen, telecom customers will switch to other providers that they feel meet their expectations. 

Meeting evolving consumer expectations requires rapid adaptation and investment in cutting-edge technologies. Telecoms are almost compelled to revamp their strategies in response to consumer behaviours that increasingly rely on digital solutions with customised experiences

To attract new leads and keep their existing customers, all types of businesses need to offer tailored solutions and exceptional user experiences. Failure to fulfil these changing needs results in higher customer churn and low acquisition rates. 

 

3) Regulatory and technological challenges

Regulations and costly, time-consuming advances in technology also impact customer acquisition. Some telecoms have in recent years been known to punish customer loyalty and ignore their customers’ affordability. Hence why operators are seeing governments clamp down on exploitative practices.  

Of course, even operators that look after their customers will now need to invest more time proving:

  • Fair practices.

  • Clear communicative advertisements.

  • Demonstrating clear value to consumers. 

Moreover, technological innovation demands investments in new personnel, tools, software and robust security infrastructure to deliver a standard that meets regulatory frameworks. Otherwise, telecom companies might find themselves caught in a crisis currently experienced by Xfinity. Over 36 million of their customers’ data has been infiltrated by hackers.

Many telecoms companies hit by this double headed challenge, may find balancing regulation adherence and tech investments quite the tightrope to walk.   

 

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Telecoms Customer Acquisition Strategies 

Yet in spite of the challenges, telecom companies need to elevate their customer acquisition game in order to maintain a degree of consumer interest on the market. Segmentation tactics, a diverse approach to digital channels and the power of AI, all work to bring a coherent acquisition strategy into play for your telecom company. 

 

1) Segmenting telecom audiences for targeted acquisition

Effective customer segmentation allows telecom firms to target specific demographics with tailored solutions. Categorising customers based on behaviour, preferences, and their needs, ensures your marketing efforts and services are personalised (and optimised) for every type of customer.  

Segmentation enables the delivery of targeted messaging, promotions, and offerings that resonate deeply with each segment, enhancing the likelihood of attracting and retaining customers who align closely with the company's value proposition.

 

2) Leveraging digital channels

A robust digital presence across various platforms - social media, websites, apps - facilitates targeted advertising, engaging content, and seamless customer interactions. 

Leveraging various digital channels not only expands reach but also improves customer engagement with real-time communication that makes services accessible. It’s a cornerstone for acquiring tech-savvy consumers seeking instant information and transactions.

 

3) Personalisation of the customer experience

Personalised experiences tailored to individual preferences create stronger customer relationships and bonds. You should leverage data insights to customise services, recommending certain products or services, plans, packages, and add-ons suited to each individual customer.

Personalising marketing communication enhances customer satisfaction due to hyper-relevant, highly resonating communication. Making customers feel seen and heard fosters loyalty. News of such attention to detail spreads and attracts new customers also seeking tailored solutions.

 

4) Harnessing AI and data analytics 

AI-driven analytics revolutionise customer acquisition by predicting their behaviours. This would allow your telecom company to optimise marketing strategies and automate processes, such as onboarding. Also, it gives you vital customer information in real time. Without the burden of deploying personnel to constantly  monitor essential data. 

Machine learning (ML) algorithms are capable of analysing vast datasets. They identify patterns, engagement rates and improve personalised recommendations. Tech-driven approaches enhance acquisition rates as AI and ML capabilities help operators anticipate the most pressing consumer needs in the market. 

 

5) Role of customer experience (CX) 

Connection has become a commodity, 5G networks continue to rise and wider coverage and speeds gives your competitors a level playing field for even fiercer acquisition strategies. It’s agreed that customer experiences are emerging as the primary competitive differentiator. 


Customer churn is at an all time high for telecom operators. Some studies suggest that individual operators are actually losing up to $65 million each month to attrition!


Positive CX must offer a seamless, stress-free, efficient and fair service from onboarding to brand advocacy. Consistently delivering  exceptional experiences gives your customers something worth talking about. Positive-word-of-mouth is the most cost-effective method of acquisition due to its ability to convert highly qualified leads. Which just goes to show the importance of positive CX for better acquisition. 

 

6) Loyalty programmes and partnerships 

Loyalty programmes incentivise both acquisition and retention. You could offer rewards, discounts, and exclusive services to existing and new customers. 

Loyalty programmes aid acquisition because they offer something more than just the basic product or service. They invite the customer to experience unique and novel rewards. This helps businesses craft a compelling point of difference by improving their value proposition to prospective customers.

Strategic partnerships with complementary businesses also enhance acquisition through joint promotions (as we’ll see below). Partners extend their brand reach into one another’s customer base. When customers see a new brand affiliated or endorsed with a business they already know and trust, engagement and conversions are likely to be higher. 

Further, a well planned and thought out partnership understands that cross promotions must make sense to their respective audiences. If the co-created rewards are relevant to audiences, desire will naturally be invoked. And if the benefits are irresistible, there’s more chance of a partner’s customer base taking action. 

In addition, loyalty programmes address the key challenges above. They give your company an opportunity to improve brand awareness through unique partnerships. Making it more valuable in the eyes of consumers would help it embrace and thrive in a perpetually evolving industry. 

 

7) Referral programmes

Word-of-mouth remains the most cost-effective and successful acquisition tools. Implementing a referral programme incentivises your satisfied customers to refer your telecom services to their friends and family in return for rewards. Usually, this involves the brand advocate and the new customer both receiving rewards for participating. 

Referral programmes convert high rates of highly qualified leads due to trust. People trust the testimonies of friends and family over claims advertised by brands. Brand advocacy addresses all of the key stages of the sales funnel.  

By tapping into existing customers’ networks, telecoms expand brand awareness organically, leveraging trust and recommendations to attract like-minded individuals guaranteed to take an interest. What’s more, the trust and familiarity they place in their social circles means they desire avoiding FOMO and encourages them to take action. 

 

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Optimising the Sales Funnel for Telecoms Customer Acquisition

Streamlining the customer acquisition funnel is the end result of an optimised sales funnel. The various stages of the cycle can be optimised with the strategies we’ve discussed above. 

 

Awareness

Beginning with awareness, informative content and targeted campaigns introduce the brand to potential customers. 


Interest

Transitioning to interest, personalised messaging and value-driven propositions engage and captivate, nurturing prospects into consideration. 


Desire

Cultivated through compelling offers and tailored solutions, encouraging action. Often this is the stage where the point of difference is announced. This could be any one of the above strategies. For example, a customer loyalty programme. 


Action

The final phase demands seamless onboarding, effortless transactions, and exceptional service, ensuring a long term customer engagement. AI driven chatbots could assist with onboarding new customers, efficiently resolving their queries with a self-help approach. 

Telecoms can significantly enhance the efficiency of their sales funnel, maximise conversion and amplify the success of their customer acquisition rates by: 

  • Analysing and refining each stage.

  • Identifying bottlenecks.

  • Adapting each stage with the suggested strategies.

Measuring and assessing each stage of the acquisition process is necessary for achieving the first two points above. Let’s take a look at how to do this in the next section. 

 

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Measuring and Assessing Acquisition Success 

Measuring acquisition success involves various different metrics, methods and tools. Essentially, you want all of these to yield insights into every stage of the customer journey. Understanding how each stage is performing helps you identify bottlenecks and refine it further. 

Monitoring your acquisition success should also continue after the lead has entered your customer base. That way, you can measure the strength of customer relationships. Indicating just how well your brand resonates with its customers and delivers the services promised during the acquisition process. 

In addition to customer feedback and A/B split testing (in other words your methods and tools), you should also analyse key acquisition and retention metrics and KPIs. 

 

Key metrics and KPIs

The key metrics and KPIs that you use will serve as compass points that guide your evaluation of your customer acquisition efforts. 


Customer acquisition cost 

Measures the expense of acquiring a single customer. 

Conversion Rate 

Tracks the percentage of leads converted into customers, offering insights into campaign effectiveness. 


Lifetime Value (LTV) 

Assesses the long-term revenue generated by a customer, guiding acquisition strategies towards high-value segments. 


Churn Rate 

Measures customer attrition after their acquisition, reflecting satisfaction and service quality. 


Additionally, metrics like Return on Investment (ROI), Customer Retention Rate, and Net Promoter Score (NPS) are vital indicators of success and effectiveness of your acquisition initiatives.

 

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Case Studies

Leading telecom companies worldwide are a great avenue for exploring effective strategies. Success stories can help shape your own innovative approaches. Therefore, we’ll take a look at how T-Mobile, Vodafone and Telefonica navigate the dynamic telecom landscape to reach remarkable milestones in customer acquisition. 

 

T-Mobile

T-Mobile has disrupted the telecom landscape with their focus on granular customer segments and “best-in-class” personalisation approach to customer experiences. 

The "Uncarrier" strategy addresses some of the main consumer pain points. Namely  eliminating contracts and excess fees. Which just goes to show how the telecom giant has conducted its research and listened to customers. 

 

The Uncarrier strategy appeals to younger audiences searching for flexibility. In addition, their partnership with Live Nation gives every T-Mobile customer on specific plans a $25 ticket for live shows. This drives interest and desire in their target audience as the majority of gig-going demographics are made up of younger people

This approach has resonated with customers who are also tired of industry norms, leading to a surge in acquisitions. T-Mobile's focus on segmentation, coupled with a digital-first approach, showcases just by understanding distinct consumer needs and using innovative marketing tactics drives significant customer growth.

 

Vodafone

Vodafone has thrived globally by fostering attention-grabbing partnerships. Not only do these deliver tailored experiences, they offer customers tangible benefits. Such as making savings on their weekly shop or even their morning coffee treat at their local Costa. 

 

Vodafone VeryMe Rewards is their loyalty programme that helps customers save money on their sim and broadband plans. Aside from the partnerships, the loyalty programme drives action (or participation) using exclusive offers and prize draws. 
 
Collaborations with leading streaming platforms and device manufacturers paves the way for Vodafone to offer special bundled offerings. Their recent co-created rewards with Odeon offers two standard discounted cinema tickets each week. 

Unlike Meerkat Movies (which restricts ticket redemption to Tuesdays and Thursdays) Vodafone’s incentive offers more flexibility. In fact, Vodafone’s convention of outdoing their competitors has resulted in massive success of the VeryMe loyalty initiative. Since its launch in 2018, customers have redeemed 135 million rewards.

 

Telefonica

Telefonica has excelled at embracing AI and data analytics. By doing so they’ve reimagined the customer journey. Advanced analytics allow them to predict customer needs, enable targeted marketing strategies and personalised services. 

 

Leveraging AI-driven insights, Telefonica offers tailored solutions, enhanced customer experiences and retention rates. This approach not only attracts new customers seeking customised telecom solutions but also showcases Telefonica's commitment to leveraging technology to drive retention

Telefonica's focus on data-driven personalisation and predictive analytics underscores the transformative impact of AI in driving customer acquisition strategies.

 

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See How Your Telco Shapes up With our Free Health Check

The key challenges that telecommunications face acquiring new customers is not a case of “whoever shouts the loudest attracts the most attention”. The exhaustion consumers feel towards an exploitative industry is felt in equal measure to their interest in innovative alternatives. 

As shown in our list of strategies and case studies, the new way of acquiring and looking after customers has arrived and is here to stay. Telecom operators that refuse to budge of their own accord will eventually need to to keep up with regulations. But it’s almost a guarantee that they won’t survive until then as customers will continue to migrate to innovative, responsive and exciting providers. 



See how your business shapes up in dynamic markets with evolving consumer expectations and fiercer competitors. Take the Telco health check to see the strength of your pull and ability to keep customers for the long term. 

Customer loyalty and acquisition scoreapp

 

 

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