Telecom pricing strategies
IT & Telecom services
New technologies and market dynamics could be perceived as a threat to a market leader: Prices were mostly based on offer components whose market value was decreasing. Market boundaries were changing, and new players could now enter the market, covering part of existing customer needs. In addition, the main competitor had started to drop prices.
We looked at several options for new commercial models and developed a new price structure transitioning to a fixed price service offering. We assessed products appropriate for bundling. We concluded that our client’s supporting applications were stronger than their competitors’, so some products could be sold at a premium. The fixed price service offering, incorporating all technologies, would enable revenue defence and maintain customer loyalty. The work then consisted in developing and supporting transformation plans, in a global business where each customer has a bespoke offer and contract. Impact simulations, negotiation preparation, customer migration plans, financial forecasts, new billing principles and validation processes had to be anticipated.
The initial target had been to defend current revenues, but our work was also able to increase YOY revenue by 1.5%.