Project 1 - B2B Sales Model Strategy in Telecommunications
Intro:
I've ended up finishing a project in the telecommunications industry, mostly about improving their sales activity and their internal processes utilized to analyze the profitability of their businesses. Although not purely strategic, as there were aspects of process innovation (PI) incorporated into the project, it was one that required a lot of logic building to make sure a sales framework can be newly applied to change the landscape of how the company conducted its B2B sales. Making a change in sales activities always involves understanding the market, segmenting your customers, and setting goals on an enterprise level to stimulate activity and cooperation across all functions in the organization.
Duration/Members/W&L Balance:
The project itself was around 14 weeks (quite long in our standards), and added an additional week as a follow-up/after service after the ultimate deck was provided to the client.
There were multiple work modules, but this particular module that 4 members (including PM). We had two full time counterparts to work with us, which provided ample opportunity for client interaction on a daily basis, while our progress was reviewed on a management level twice a week, which is quite often. Work-life balance wasn't that bad, but on average I'd say we went home around 1~2 am each day. Some days off at 11, some at 3.
Thoughts on industry:
Telecommunications is much more of a slower, and less dynamic industry than I had normally thought. Previously, when reading into the dynamics of the industry, I felt like I saw most of the content and trends generally pointing towards new improvements into wireless connection speeds and widespread technological innovation, with new technologies such as 5G and Edge computing headlining the new digital era of this telecommunications. Thus,
I had begun the project thinking it would be a fast paced industry, and ended up coming out with an understanding that the fluctuation of the main revenue streams are minimal in nature. The bulk of the sales are centered around the basic telco services, such as internet, mobile, and TV, which, of course are are deemed as essential utilities, and are contractual services that need to be renewed every 3~5 years. Therefore, as vendor switching is quite easy, telcos compete mostly to keep their portion of their pie intact, putting a focus on retention activities, rather than trying to go overboard to acquire new customers. New customer acquisition itself is a difficult activity by itself in the telco industry, as there is difficulty in gaining comprehensive visibility into actual market potential of particular service; however, the market can still be deemed finite in the sense that the physical coverage of networks actually define the entire market. Telecommunications require so much capital and network coverage to actually provide these utility services effectively that there are not that many players in the market to begin with. Moreover, a lot of these companies need to work closely with the government, meaning regulations have a bigger impact than you would expect.
Given the nature of the services, where revenue is based on actual usage of the network by customers, it is quite difficult to understand how the usage rate is calculated for complex products. Profitability is a difficult concept to grasp, mostly because of the indirect costs that the network coverage is susceptible to. Generally, these companies need to invest heavily into building large networks and cables to be able to provide the basic telco services (TV, Internet, Phone) to B2C consumers and B2B Customers alike. They construct these cables not purely based on existing demand, but rather based on prospective opportunities way into the future, so it is difficult to garner the actual usage rate of the full capacity of these network cables throughout time. Capacity is never clearly defined, as new cables can branch out from the main infrastructure, and customers always can tap in/out of existing cables. (to make it harder, generally competing telco's also can share each other's cables as well, resulting in complex billing systems). Therefore, the central network cables can be (or not) used, which changes the actual indirect costs (depreciation, service usage) that would be attributed to particular project or individual customer. These indirect costs of course needs to attributed properly to measure the profitability of a customer, product, or organization, but is a difficult task to do.
Project Details:
Given the industry landscape provided above, we were given the task of re-defining the sales structure of the organization, in which we would be able to provide actionable insight to the sales force, and determine their strategic direction. In the world of account management and B2B sales, it is difficult to maintain tabs on the information that sales teams have on their clients, and also digitizing the information surrounding the market is quite difficult.
We had to define what the ideal customer was, toying around with the concept of having "VIP" customers, not just defined by their revenue size, but rather on a conceptual level, where we could completely define the totality of the market in which these VIP customers would be confined to, and then develop relevant policies and tools to organize the sales organization around these VIP customers and stimulate sales activity.
The market segmentation itself was quite difficult, as we needed to come up with factors that are able to define a substantial portion of the market to give the tag of "VIP", but also to a point where it would be manageable with the resources that the client corporation had available to its disposal.
After defining the ideal customer profile and conducting market segmentation along with analysis, we also had to incorporate internal processes in which the company would be able to analyze the profitability on a customer level (now incorporating the VIP customer category). That by itself was as much a logical structure argument, in deciding how to prevent possible fraud scenarios that would occur within the organization, but also how to stimulate it in a way conducive to the defined market.
All in all, we were creating a sales model out of scratch, based on their internal information and on our building knowledge of the market. Although it took some time to convince the client of its structural integrity, we did have them onboard and were able to provide an initial framework on which they can extrapolate on further into the future to make it work more efficiently.
Personal thoughts:
It wasn't the most "fun" project, as it mostly required a lot of banter back-and-forth with the client in just correctly defining the parameters and processes of a newly created sales model. Again, it was centered around verifying the logical consistency of the framework, rather than trying to derive market insight, and figuring out new approaches to a complex problem, as would be for a GTM project or a Sales strategy. However, I enjoyed it thoroughly mostly due to the people I had the pleasure to work with. Worked alongside probably one of the best PM's in the firm, who had great sense of direction, workload management and distribution, and was great at keeping a coherent storyline throughout the entirety of the project.
Consulting lingo: and work modules
Sales model creation
Market segmentation and targeting
Redefining internal incentive structures
Allocating responsibility on capital expenditures
Defining sales pipeline/prospects/leads/opportunities
Profitability analysis