The Qtel challenge

Qatar is on the verge of market entry by Vodafone, one of the world’s leading mobile players. Qtel, the incumbent monopoly, will face a formidable challenger in Vodafone. Aglobal presence and vast product and services innovation experience across developed and emerging markets are just some of the advantages Vodafone can leverage in its market entry strategy. Vodafone has the capacity to deliver targeted value propositions to the very diverse customer segments found in Qatar, from the labour force to the local large enterprises and branches of multinational firms.

Given the near saturated mobile market and the well-serviced fixed-line arena, Vodafone will likely target the incumbent’s existing customer base to capture market share. The challenge for Qtel is to retain the high value segments, thereby allowing the inevitable churn to be within the lower segments. The enterprise segment is one of the key contributors to revenue and profitability for Qtel’s domestic operations. In any customer retention effort by Qtel, these customers should rank at the very top of the priority list.

Should Qtel be worried about churn in the enterprise segment?

Typically, large enterprise customers are slower to churn to a new, untested provider. However, given Vodafone’s global brand, international footprint and established relationships with multinationals, it is well positioned to address the needs of the large enterprise segment and multinationals in Qatar. This puts added emphasis on Qtel’s need to develop a more targeted value proposition to the enterprise segment that could help reduce the likelihood of churn.

Taking the necessary steps to increase retention among the enterprise segment the nature of the business segment dictates a different approach to customer retention than the consumer segment. Business markets have fewer customers, larger transactions and ARPUs, greater customisation needs, and lengthier decision making cycles with multiple stakeholders. Their decision making process is also more dependent on actual product benefit and value, while the consumer market is more heavily influenced by branding.

Recognising this, Qtel has already taken the first steps by becoming more customer-centric in its organisational structure. The enterprise business unit is in charge of the full gamut of Qtel offerings to the enterprise and SMB segment, including mobile, fixed line, Internet, data communications, and managed services.

Qtel has also recognised the growing global and regional trend among enterprises to increasingly outsource their IT and network activities. A trend that is accentuated by the current economic recession as IT budgets tighten and customers focus on cost-effective solutions, out of the box functionality, faster implementation, lower total cost of ownership and quick ROI.

The next critical step for Qtel in improving its value proposition to the enterprise customer is to develop the right sales and marketing approach to this segment.

From a product-centric to a solution-centric approach

When Qtel’s main product offering to the enterprise segment was pure voice or data connectivity, the sales and marketing approach to this segment was straightforward. Customers needed basic connectivity with limited or no customisation, and the decision making process was the sole responsibility of the IT department. The sales approach in this product-centric environment was similarly straightforward, that is, pushing the standard product offerings to the customer’s IT department with limited pre- and post- sales support and customisation.

As Qtel changes its product and service offerings from pure connectivity to more complex managed services and ICT solutions, the sales and marketing approach needs to change as well. Selling managed services and networked IT solutions to the enterprise requires a different sales approach than the traditional product-centric approach. Customers are increasingly demanding complex and customised solutions, and seeking to outsource a larger part of their IT and networking activities to an external provider. Qtel thus needs to become more solution-centric in its sales approach to enterprise customers to continue to keep them loyal and increase its share of their wallet.

Specifically, Qtel needs to develop the capabilities in its enterprise sales force to become much more consultative in its sales approach, proactively generating ideas and solutions for the customer. Managed services and ICT solutions impact the business lines of the customer much more deeply than the traditional connectivity solutions of an operator. As such, the sales approach also needs to engage multiple stakeholders in the enterprise customer, not just the IT department. Furthermore, extensive pre- and post-sales support is an essential part of a solution-centric approach to selling.

Imagine providing a payroll application in a software-as-a-service (SaaS) model. The departments impacted, and hence involved in the decision making, are multiple, including IT, HR, finance, and others. Such a solution will inherently have a lengthier buying cycle, as different stakeholder requirements and buy-in need to be obtained.

Mohsen Malaki, independent consultant with over 10 years experience