Monetizing Telecom Services – Moving Beyond Connectivity

SPEAKERS

Jessie Paul, Lars Stratveit

Mon, Nov 21, 2022 12:43PM • 30:59

Jessie Paul  05:38

Hello, and welcome to our new episode for marketing for growth, a spotlight on telecom where we explore the latest trends in telecom. And today, we are really excited to have with us Lars Stratveit, who is heading up digital sales and services for b2b in detec, with a focus on accelerating the beyond connectivity strategy through B Lab, the new one-stop platform for SMBs to grow their business. And his previous experience includes heading the digital transformation program in the Telenor group, and leadership positions for digital at Nike at their European headquarters. So with this, it’s a very broad span of experience. So super excited to talk to you, Lars, and I’m going to start at the beginning, which was you were a part of the transformation of Nike to a digital lead experience, what learnings from that very different space are you able to bring to the telecom industry?

Lars  06:39

Yeah, no, thank you so much for having me, Jesse. And, yeah, pretty happy to be here. Yeah, I think it was a really fun time at Nike, when, when I was there. And yeah, when I started around 10 years ago, a bit more than that. Now, you know, Nike was really a brand and product company. The DTC business was not that big, and mainly like to be brand stores to really kind of physical manifestation of the brand, you know, like Nike town, London, Nike Paris, in Europe, these are the big ones and around the world, like New York, and etc. And, but I think it pretty early on saw this big shift towards digital. And I think for Nike, as a brand, it was really important to have that direct connection with the customer, because you really wanted to build like a membership strategy and create members of the brand, and provide that kind of, you know, personal relationship. So that was really important for the digital transformation, to really scale that direct to consumer and really building that personal connection. So I think in the beginning, you know, we were like, like a startup, we’re pretty small, and no one knew who it was like the mantra and all of Nike, globally was lead with digital, but no one really knew what it meant, you know, so there was a lot of trial and error, a lot of failing, but I think that was kind of one of the biggest learning was like, for such a huge company and a global brand, one of the biggest in the world, to take that big leap, take the risk, and even when you don’t necessarily know exactly how you still lead with it across every category and across every space and figure it out together. And then you saw that rapid growth, triple digit year on year for several years in a row. And the team, you know, now, digital for Nike is their biggest channel by far. And it’s like three key pillars of the company, and digital is one of them. So I think that was, you know, great learning and seeing how Nike really values, putting the consumer in the center of everything. So always start with the consumer, and the power of the brand. So like, you know, this brand is like an oil that helps everything, and really having those passionate consumers that really can be your advocates. And, you know, I used to head up the launch business, which is like the sneakers app. And these are the most dedicated people, they would camp outside our stores for 24 hours before. And they will be up Saturday morning at nine in the morning to queue up also online to buy, you know, the latest Jordans or collaboration sneakers, and seeing that level of passion that you can build. That was a really inspiring and really, really fun, fun, fun experience.

Jessie Paul  09:30

You know, I hear that you like a challenge and you like a transformation. And I think your current industry is also at an inflection point today with, you know, voice revenue sort of declining. And I see that you’ve embraced that with beyond connectivity strategy. So do you want to tell us a little bit about what that mantra actually means? And, you know, is there a 5g play within that?

09:58

Yeah, for sure. I think telecom is definitely in change, right? For several years I’ve been five years a bit more in telecom. And even in these five years, I see a lot of changes. And I think, you know, going, you definitely see the rapid decline of voice and then rapid increase in data. And I guess the big challenge is that we see that consumption is more important than ever, like the decision data consumption, especially through COVID skyrocket. But telcos are really struggling to monetize it. Right. So the ARPU levels are in general, not increasing. So the whole industry is struggling, right to really, how are we going to get the next kind of level of growth going into next century, and 5g and so on. So I think there’s an inflection point where you know, telcos really need to decide like, do you go down the path of becoming more like a utility company where you become a dumb pipe and just provide, you know, data connectivity? Or do you want to really be that service provider and build something more? And I think, probably all telcos definitely want the second option. That’s definitely the more interesting one, and also should be more profitable. So I think for us, that really means we need to go beyond connectivity, creativity will always be our foundation. You know, that’s, that’s where our bread and butter. But as you know, the markets are fully penetrated. And we don’t see the ARPU growth just organically happening. We need to go into new verticals, and really build the end-to-end like a one-stop shop for capturing that growth. And I think the first for us is really around, like how can we grow with partnerships. So we have a strategic partnership with Google, for example, we work really closely together both on building the platform and on how we can kind of sell each other’s products like Google workspace or Google Cloud or similar for us. And I think, you know, looking at the future, I think these kinds of partnerships are going to be increasingly important. Because telcos have an amazing distribution they have, we have an amazing customer base. And we have a really strong local presence. So this is super valuable for these, for example, the big tech companies, but we’re maybe lacking the products. And so the first step for us is to grow with partners to really expand this business. And I think the second one, the more long term and you mentioned 5g, right? I think it will be very interesting to see like how we as an industry can really build new experiences build new services on top of our connectivity, even as 5g, I guess, like the main main selling point of 5g is latency and speeds? What services really need that? And what service in general does the customer need? And then I think we will be in a good position to leverage some of them. But yeah, I think it’s hard because it requires very different I think we’ll work investment kind of philosophy and approach. And I think that’s perhaps one of the reasons why telcos have struggled a little bit to go head to hand on monetize the connectivity, because, you know, like 4g have insane value creation in the society. But most of the value has been kind of captured by the big tech, the big tech companies, right? So if you look at the last five years, they have a big, big growth, and I think telco as an industry has not have the same growth. So yeah, we for the next era, we need to be the ones taking bigger part of that pie.

Jessie Paul  13:45

You talked a little bit about how the way you work has to change as well. And in digital speed its frighteningly fast. I mean that as a pawn as well. But how does that actually impact you and the organization and changing the way that you go to market or how you actually work?

Lars  14:09

Yeah. So you know, when when when we started our digital transformation, like in Telenor group, its big Scandinavia and big in Asia, and we worked together with McKinsey to create the strategy and, and well, the key insights also from them, and from us was like, to really scale digital, I think way work is is the number one, it’s not like the number four or five, it’s the number one, and the experience is like 70% Were working culture and 30% You know, technology and skills. And I think in my experience, also comparing to Nike and also working very closely for example, with with Google and other tech companies is telecom have spent, you know, 200 years I’m really becoming very good at these big projects, building networks with really big cutbacks, and you need long planning, right? It’s, it’s pretty predictable in a way. But it’s you need to have very strong kind of process to, because it’s a long term investment and a lot of money. So in general, I think we have become kind of very good at those big processes, where you have kind of predictable revenue streams in the future. And you know, what you need to do. The problem with digital is you don’t really know any of those elements. So you can make very accurate business cases on very uncertain assumptions. And then, you know, the end point doesn’t really, it’s not very likely. So what you need in digital, it’s speed, you need to fail fast, you need to iterate, you need to test or build, measure, learn, and really work closely with the customer to see what works and not because it’s very hard to predict what’s going to be the next big thing. So that’s why you need to try many things. And I think this is where at least in Telenor group, we really struggled because we really like to have a big business case and very clear picture of how he’s going to evolve. And to give an example, when we work now with Google, we have this Google 10 next transformation project with them where they have a transformation team called Google dynamics. So about thinking exponential instead of incremental as the name and, and we did like a 10 week design sprint on okay, how can we do this for Thailand. And that’s where this whole like one stop shop and B Lab that we have launched came from, and now we’re working really hard on scaling. And but you can see the cultural differences, because as soon as we knew we want to do that. They wanted to go straight away to start building. And then like launch, Atlas, launched MVP, you know, minimum viable product, and take it from there. But we as a global telco, we wanted much more certainty on what’s the five year plan? Will, how’s this gonna look for the next five years? What’s the bottom line? What is the capex OpEx? Everything was laid right before we approve anything and start. And so it was a big difference. And also like the willingness to take risk, I think they are really good at just going for it taking risk upfront, and then seeing you know, how will work? I think, at the end of the day, we did very good as well, because we launched the first MVP after four months. So I think usually we’re talking to at least Google, the telcos will spend over a year before they launch the first version, and they will build something very big. We were very focused on how can we minimum viable product, what’s the first version, get it out as quick as possible, because that’s how we got to learn what’s working or not. And once we launched, we learned a lot, and a lot of assumptions were wrong. So we changed our backlog, we changed our approach. And now like every week, you know, we keep iterating and improving it. And I think this is what we need more of and, and that’s why this kind of agile, why your work is so critical when you’re going to scale digital, because the changes happen fast. And you know, even Amazon, they don’t know what’s going to work or not. That’s why they do so much testing, for example. Right? So I think we need to be humble to say that what is I don’t know. And the best way to find out is to build, measure, learn, and take it from there.

Jessie Paul  18:33

Okay, you seem to be enjoying the excitement of the agenda, if it was certainly more exciting is what I can say. Let me switch tracks a bit to something a little more in your control and predictable, which is today, a lot of effort from marketing goes into understanding the customer as an individual and delivering really personalized customized experiences to them. And telcos actually do have a lot of data about their customers. And I was wondering if you had any perspectives on, you know, what are the martech tools or data analysis techniques? What’s working for you to actually kind of realize the potential of this customized offerings?

Lars  19:22

Yeah, no, I think that that is a million dollar question that I wish I had even more answers, I would say, because, you know, like when we first started our digital transformation in Telenor, like, five years ago, one of the key acquisitions we did was company called Tappet. Based in New York, it was like a big acquisition and, and their specialization was like to have a device graph to predict who you are across devices. And we build CDP together like customer data platform, and like the foundation of the transformation was really around personalization. You know, like you mentioned, like How can we really use our data to better personalize our marketing or content, our experiences to give the best experience? I think the really, really hard thing for us to started in Europe and now it’s also an Asia is privacy. So, you know, for CDP to really work, you should have like, maybe 3000 data points, right. And really everything we worked like half a year to get for in there because of you need consent. And it’s so hard to get consent, especially as a telco because as we don’t have them any kind of experiences where you really need consent, it was really hard for us to obtain consent to use the telco data for anything, like if you if your Facebook or Google has been easier to get consent, because then, you know, to use the service, maybe you need to consent, but we didn’t have that many services like that. So I think that’s the number one is like, how do you really do this in a privacy approved way, let’s say because now in Thailand, for example, we just launched PDPA, which is kind of like GDPR, just for Thailand. So we have the same same challenge. So I think I think that’s number one. And then, so I think in my experience, so far, it’s like, we try to use as much data as we can in our marketing and sales and personalization. within what we can do, I think, maybe almost even more important from what we are learning is, so we use that, you know, for lookalike targeting, or retargeting or personalizing the landing page. But I think a huge area where we still can learn much more than I think we can get, actually the most value is, is using data to really understand the customer. So not only to personalize, but to understand, you know, what’s the behavior versus the different segments? And how do we optimize based on this, you know, like, optimize the campaigns, optimize the journeys, optimizing in general, and really have a data driven approach to all of it, not opinions, even though you know, marketing is a mix of art and science, for sure, especially the brand building is notoriously hard to measure. So I think there is a pitfall as well, especially in digital marketing, that you have so much measurement, that you tend to just you tend to over kind of over index on the short term metrics, because these are easy to measure, like leads or conversions or click through. But that’s not really proving real engagement, right, or like real impact. So so maybe a clickbait looks great on those metrics, but to build like the brand and to bring the loyal customers doesn’t help at all, because it’s just ego when you bounce probably. But I mean, yeah, I think martec is super important. We are using, you know, a lot on Facebook and Google and using their tools. So the challenge, I think with martec, just in general is you know, these are walled gardens gardens. So it was a little bit hard for us to use our first party data in these environments, with the privacy kind of approved way. But there’s still a lot of potential out there, and how we can optimize. Yeah, but we have seen some challenges. So if anyone out there as well have some good ideas on how we can get the consent to do it, and more. Love to hear it.

Jessie Paul  23:32

Yeah, I mean, definitely, there are challenges. But I think part of the promise of 5g is also the amount of real time data that’s available. And it’s not just consumer data, but all kinds of data. So do you see you know, how that’s gonna be fueling innovations?

Lars  23:52

Yeah, I think like data is super important, right? And like how the big question is, like, I think he’s been talking about big data for many years, maybe haven’t seen that many as at least in telco like super monetization on it. Because it’s like, one thing is to have a lot of data. One other thing is like, first of all, to be allowed to use it for the purposes you want. And then the third is like, Okay, what’s the product you want to give to the customer to really monetize it? So for me, I think the first thing is to, I think that the data needs to improve the experience you want in the first place, but it needs to start with like the innovation like what do you really want to deliver? What is the product? What is the service? What’s the experience that the customer really wants? And take it from there. And I think especially as the telecom part of it becomes increasingly commodity and you know, it becomes more like I think postpaid, maybe unlimited data, so you don’t need a lot of interaction right on that because it channel keeps going. So that’s why it’s, I think, super critical that we go beyond connectivity, and create amazing services that the customer want. And there, we can really use the data to give better recommendations give better experience. And I don’t know if that is creating streaming services if you’re in TV and broadband, or creating the next. You know, like, who knows, but I think, you know, I think the problem sometimes with 5g, like I went to some like, telecom kind of conferences as well and Europe some years ago, from 5g. And I think there’s, there’s so many, like, Ericsson stuff then come like 200 use cases and all these, but I don’t really see that many of them being coming to life yet. So I think it’s everyone’s kind of looking at each other, what’s going to be the golden silver lining like the the the one thing that’s going to take it, but I don’t think there is one like magical one, I think it’s going to be a lot of a lot of smaller things. And then I think, you know, 5g is going to be critical for the society to build innovation. But then the question is, who is going to build that innovation and I think if if it’s going to be the telco, we need to take risk, we need to work fast, agile, and we need to empower our teams to to really try new things, and be okay with either failing or not, but really trying some new things, and be okay with not being certain for five years, if it’s going to be the right thing. Because there’s a lot of kind of patients out there, but I want to see them in practice. And also maybe through partnerships, because there’s, it will be hard to really scale some of these. So I think also not being afraid to work with partners, and leverage other strengths, I think that’s going to be an increasingly important area. And I think for telcos just the last thing on that is like, we need to make sure that we don’t treat partners like vendors. So it’s not about like, pushing for the lowest price or like being far away from each other and like pushing each other. A partnership means working together and collaborating. And that’s kind of a very different approach than the traditional vendor relationship that I think the big relationship telcos usually have is the vendor relationship, you know, to build a network or it or whatever it is. But if you’re gonna really build new services, and amazing products in customer experience, you need to work in a partnership way and much more collaborative. Yeah, in the future.

Jessie Paul  27:33

That’s a lot of transformative thinking. It’s how you work what you work on the current people who work with. So I think, yeah, there is a lot of change happening in your industry. And it’s exciting, because, you know, there’s a lot of new opportunities as well. So as we wrap this up, I wanted to ask you, as somebody who has worked in multiple countries, multiple industries at different paces, what’s the advice you would give new marketer entering the space?

Lars  28:09

Oh, that’s a great question. I think, for new, like, young people more entering the space, if that was the focus, I think the number one thing is be a sponge, you know, try and have a growth mindset and learn as much as you can. That is really because, you know, the future of marketing and the future of this industry. It’s not written in books, it’s not based on the past, it’s, it’s a lot of changing, like you mentioning, and is changing fast. And so if you can really have that growth mindset and be willing to try new things, even though if you don’t really know how it’s gonna end, you’re willing to take that risk and but then be very critical on the feedback loop when it’s working or not. And what is the insight what is the learning, so you can keep building on it for the next part, because you can do an A B test on two marketing campaigns and see which one is working better or not, that’s great. But if you don’t understand why that’s working better, you can’t build on it for the next time. So I think it’s really important to try and always think of, why is this happening? You know, and then you can do it through customer interviews, or do different testing or, or create hypothesis and see test them out. But if you’re able to keep learning, then you will really grow. And that’s the same in any market in any industry. And also, you know, I worked in many countries, and it’s quite similar. I think, like, that’s the key insight for me is like people are much more similar than different. And you know, the first team I joined at Nike, we were 14 people. That was like the performance marketing team. And we were 14 people from 12 countries. So it was like two from the UK and everyone else was from different countries. And it was like from Asia, South America, us your Africa as well. Yeah, so I was like, every continent and the thing is like, we were all kind of the same, you know, like, so I think that’s the inspiring thing for me and why I always seek to work abroad or a different market is it’s so interesting to learn new cultures and I think you know, some new market to just try and be curious and then try and be open-minded and then you’re gonna, you’re gonna go far.

Jessie Paul  30:25

Okay, that’s great takeaways, be curious and be open-minded. So with that, we come to the end of this podcast with Lars Stratviet. I hope I got that right. Thanks so much to you for sparing the time for this. And thanks also to our partners Comviva for making this possible. And it’s been a pleasure speaking with you.

Lars  30:50

Thank you so much. Have a great one.

Jessie Paul  30:53

Thank you. Bye