Same old same old

Another day, another telco price ad.

Now you’ll notice, if you follow these things, that the telcos that generally run price ads are the ones who aren’t green i.e. the fighters. The big boys on Waiyaki Way charge more than everyone else but spend their marketing budget to tell us about new products, promo winners and up-coming concerts.

Being one of the three fighter brands in the telco category in this market must be one of the hardest situations that any telco brand could find itself in on the planet. The dominant player bestrides the market like a huge green elephant, continues to generate uber-profits, leads the way both locally and internationally in terms of product innovation, has finally gotten it’s share price moving, is owned by a large number of the citizens of it’s market and has a level of brand engagement with it’s consumers that puts it in a similar league to Apple, Nike, SuperSport 3 and the Catholic Church.

Now this post is not intended to serve as a deification of Safaricom, rather the question I pose today is this: how can any of the three fighter brands have any success in this market, at this time?

Answer number one is that they need to stop running price ads…

The telco category is a very interesting one because it is both exceptionally functional and deeply, human-ly, emotional – as a category it is borderline bi-polar…

At their core, telcos are essentially pipes – they move information from one place to another place, be that information in the form of sound or bytes. The closest analogy for what telcos have become at the functional level would be water and electricity utilities. The core products that telcos sell, namely minutes and megabytes, have become utterly commoditized – indeed in this market they are even more of a commodity than water and electricity, which are relative luxuries to most Kenyans. Given that there is no real supply limit to minutes and megabytes (just build more base stations/lay more cable), one can in fact predict that the price of the commodity that telcos sell will tend over time towards zero – once everyone everywhere is on 7G, and the infrastructure costs have been recouped, what is left to pay for other than running costs and maintenance?

So on the one hand you have a category that sells a product that is turning into a ubiquitous and almost freely available commodity.

On the other hand you have a category that provides a service that is as fundamental to human beings as eating, breathing and reproducing.

Humans are, by our very nature, social animals. Indeed the worst punishment that you can inflict upon a human being, other than to take his life, is to remove him permanently from the company of other human beings – doing so will surely kill him, or drive him mad, or both.

Telco brands may sell minutes and megabytes, but the need that they fulfill in people’s lives is profound – laughter, joy, tears, love, jokes, gossip, romance, friendship, partnership, adventure, plans, moments, understanding, hope, listening, caring, knowledge, sharing, arguments, disagreements, agreements, teaching, learning, everything.

Back a step: the more commoditized the category, the more important the brand. Forward a step: the more emotional and emotive the category, the more potentially powerful the brand.

A step sideways: I know that one of Safaricom’s great strengths is the enclosed ecosystem that it has built around M-Pesa (a la Apple and iTunes, the descendent of high off-net charges in the mid Noughties). This ecosystem penalizes consumers without an M-Pesa account as it cuts them off from the huge flow of money within it. Given that for the vast majority of Kenyans mobile money transfer systems are a tool primarily for the receipt of money, the opportunity costs of not being within the ecosystem are prohibitive.

However this situation is time-bound, and is essentially a matter for legislation. M-Pesa will go ‘open-source’, be it sooner or later, which brings us conveniently back to the brand.

Over and above it’s (sort of) first mover advantage, innovative products, monopolistic tendencies and diverse ownership, Safaricom’s greatest single strength in this market is it’s brand, namely the emotional position which it holds in the hearts and minds of it’s consumers, which is approaching unassailable.

Telcos are, at an engineering level, networks. The secret about telco brands, which nobody seems to wish to discuss, is that they are all based in one way or another on ‘pre-existing social networks’. I repeat the point about humans being social animals, and this is the key key key issue that the fighter brands are not getting.

Individuals do not churn (switch networks, for the non telco types). Pre-existing social network’s churn. Crews churn. Villages churn. Communities churn. Families churn. Churches churn. Individuals do not churn. A network (telco) exists to connect you to your network (social). A network (telco) without a network (social) is isolation, which is madness and death, or both.

Thus I would say (again) that the key mistake that the fighter brands are making is that they keep trying to package the decision to switch to their networks as an individual decision (thus the obsession with price ads) – when it is not an individual decision, it is a group decision (and yes groups do have sub-conscious decision making mechanisms)… therefore the fighter brands are talking to the wrong people…

Every telco brand must first identify the pre-existing social network that it is going to build itself for and upon. Safaricom has taken the high ground, it’s pre-existing social network is called ‘Kenyans’. It came first, it took the position, you ain’t taking it away, even though yu kind of tried to at launch.

But remember that the weakness of a high ground is that it can be undermined. ‘Kenya’ is but one layer of social network (albeit the largest one numerically) that exists within the economy called Kenya.

yuMobile has kind of been flirting with positioning itself as the telco brand for the ‘pre-existing social network’ loosely known as ‘urban youth’. They need to be a lot more explicit about this.

Airtel launched with a Pan-African positioning, interestingly enough very similar to Celtel’s, but this positioning is way ahead of its time, if indeed it will ever have a time.

Orange has no clear positioning as far as I can see (in this market at least).

The point I guess I’m trying to make to the fighters is this: you’re never going to have everything, but that doesn’t mean you can’t have a significant something. Identify a ‘pre-existing social network’ (getting tired of typing that) i.e. market segment and set out to own it and own it completely. Design everything you do for that segment. Ignore all others and be utterly monogamous. Go where they go, talk how they talk, dress like they dress, dream like they dream and never ever let them think that you have forgotten them.

The Kenya telco market is not mature, it is full of opportunity. How about a network for Kikuyus, or for Luos? How about a network for teachers, or for rastafarians? How about a network for Chinese immigrant labour? How about a network just for AFC Leopards fans?

My examples may be flippant but the point is deadly serious. No more price ads, identify your (communal) audience, build and build and build your brand for them until such time as you are one the same and indivisible with them. Then you will have your territory and no one, Safcom included, will ever take it away.