Can Telcos beat the FANG companies at their own game?

The current situation with millions of people confined to home and eschewing physical meetings has highlighted the way that social media has captured our imagination. What’s most astounding about this is that it’s led by just five companies; Facebook, Amazon, Apple, Netflix and Google have dominated this world. You could possibly throw Microsoft into the mix too – they’re not so big in social media but they do own Skype and LinkedIn so do have a presence here.

The figures are astonishing. Facebook, not yet 20 years old, has amassed more than a billion profiles worldwide and is worth, at latest figures, more than $650 billion. Google, which has been going for only a little while longer, is even more valuable.

Perhaps even astonishing is the way in which their corporate names have become part of everyday speech
“Let me Google that”,
“Netflix and chill,”
or “I’m going to order it on Amazon”.

In just a few decades, these companies have transformed the way we operate and even see the world.

Yet, for all their dominance, these businesses don’t have everything entirely their own way. In particular, they have two kinds of problem – a technical one and a legal one.

The latter has seen a few of these corporates get into serious difficulties. For example, Facebook was fined $5 billion for sharing information from its accounts with Cambridge Analytica; Google was found to have exposed personal information from 52.2 million accounts to unauthorized parties and it’s been revealed that Amazon staff had been listening to sensitive information through Alexa recordings. All of these companies have similar tales to tell and some of the privacy implications should greatly worry customers.

But, despite all of this detailed data gathered by these companies, they’re not that brilliant at adapting it to meet their customer’s requirements needs. Their operations depend on paying close attention to their customers’ needs but there are difficulties.

1) Keeping data privacy-first

First of all, alongside these operators’ various brushes with regulatory authorities, there is still some considerable privacy protection in place. This means that they don’t have access to the full range of their customers’ browsing and viewing habits.

2) Not enough features to improve models 

Secondly – and this is a direct result of these privacy constraints – all of these companies have algorithms that aren’t as finely tuned as they should be. For example, Facebook may notice that a user has interest in football and cricket and serve sporting ads, not appreciating that someone interested in one sport may not have the slightest interest in another.

Perhaps even worse than this, is no appreciation of sporting rivalries. A supporter of Arsenal may be less than pleased to be offered ticket offers for Tottenham matches – it’s the sort of misstep that would leave a provider in its customer’s bad books; or at the very least leave the customer feeling that their relationship is superficial. Too many errors like that could lead to a permanent dislocation between user and vendor.

3) Predictions without context 

There are other hiccups with these services: buying presents on Amazon should give some insights into customer needs. But even here, we run into difficulties. The company can recognise what a customer is buying but the algorithm is not sophisticated enough to pick out extraneous detail. For example, Amazon will notice that a customer is buying toys for children but can’t take into account that the children are of different age groups, with different needs.

These are just some of the ways that the large suppliers are failing to meet the needs of customers.

But these players do have one trump card: they’re all monopolies (or at worst duopolies), which means that they are retaining their users despite some rather crude marketing.

Apple is an exception to this – it has plenty of completion – but Apple has struck a lone path of itself, a path secured by the almost fanatical support of its so-called ‘fanboy’ users.

Telcos operate in a different landscape. For one thing, they are living in a highly competitive world and are constantly looking to steal a march on their rivals. They do have one advantage that the likes of Facebook, Google and the others don’t have and that’s access to a particular type of data: network traffic data.

This will provide a much more detailed insight into a customer’s daily life –with far more information on his or her interests, habits and preferences. When this data can be married to a high degree of privacy, then they have a massive advantage over the social media giants.

This type of information isn’t new.

Telcos have always had this sort of detailed data – the problem has been that no-one has been able to harness the sheer size of the information.

Engineers have used some of it to ensure that networks are running properly but marketers have never been able to get to grips with the complexity of it. Instead, they’re relied on crude customer data – perhaps from CRM systems – but this isn’t enough to provide transformational changes. 

To make the most of your network data in a privacy-safe way, you will need an entirely new technology platform, something built from the ground-up for scale, for real-time, for privacy and for action. Something like a Customer Intelligence Platform (CIP). 

There hasn’t been much loyalty to telcos – they’ve been experiencing high rates of churn, perhaps a reflection of customer dissatisfaction with what they’re being offered. A CIP can change all that:  it provides a way for telcos to steal a march on the FANG players by beating them at their own game – tailoring marketing messages to meet user needs.

And all of this is possible without falling foul of privacy regulators. It’s a winning combination for any telco.