Summary Bullets:
• With 47% of small businesses using WhatsApp, telecoms service providers can become disintermediated from their customers as anything other than a connectivity provider.
• Service providers must understand the complex nature of the market and target value-added solutions selectively to meet changing needs of small businesses as they evolve.
Small businesses are the focus of many telecoms service providers for growth as the corporate, MNC, and public sector markets suffer from hyper-competition and as solutions providers keep winning managed services contracts. The problem is that the dynamics, needs, and go-to-market strategies are not the same for small businesses as for corporates. Most importantly, small businesses are tending less and less to see the traditional portfolios of carriers as relevant to their needs.
Research recently published by Vodafone finds that the UK’s small businesses choose to use apps rather than traditional forms of network-based communications. Vodafone also points out that three-quarters of small businesses and sole traders ‘rarely send invoices in the post but instead use apps like WhatsApp, Facebook Messenger, and Microsoft Teams.’
This reflects several trends both in business and in society. New businesses are more likely to be created by a more digitally native generation for whom mobility and smartphones have substituted legacy. It is not just because they are familiar with these technology platforms on a daily basis, it is also commercially sensible: Cheaper communications can be quicker, more interactive, and more easily networked across teams of colleagues, partners, and customers.
Telecoms service providers have worked hard to establish unified communications and other collaboration tools in their networks, but these tend to be charged at a premium to what are often ‘free’ (‘the consumer is the product’) apps like WhatsApp. The next challenge is that traditional telcos are not seen as obvious service providers for smaller businesses because they are big and tend to be less responsive.
However, smaller businesses rejecting traditional telcos remain customers, but the focus is usually just on 5G, WiFi, or broadband connectivity. Telcos strive to leverage their fundamental strength in connectivity to offer value-added services for extra revenues and customer relationships that go beyond networks. To do this, they must recognize that usually the best they can do is sell connectivity. But as smaller businesses grow, the importance of things like security will become significant, alongside enhanced customer care and management for devices that are lost, stolen, or become out of date. The key is to understand how small business leaders think by identifying evolving businesses that are likely to step up to the network-based services when WhatsApp is no longer adequate, and they need the functionality and apps offered by Microsoft 365 in the cloud across all their devices. This should be strongly coordinated with third-party channel partners that will usually be more agile and in touch with smaller customers on a daily basis.
The small business market is a huge opportunity, but diverse, complex, and challenging. There is no single way to dominate, but there may be multiple ways to succeed.
