The Pitfall of Telecom Price Differentiation: A Commodity in Disguise

Tuomas Pippola
February 29, 2024
2 min read

Price differences hardly bring any real value to consumers

In today's saturate telecommunications market, it's hard to tell one provider from another. They all seem to offer the same monthly plans, differing only in price. But here's the catch: these price differences hardly bring any real value to consumers. Instead of delivering innovative services and engaging experiences, telecom companies resort to slapping labels like "5G" or "4G" on their offerings, without bothering to explain the benefits, or what it means. It's no wonder that telecom has become a bland commodity, lacking the excitement and loyalty it could offer.

Choosing a telecom provider these days is like trying to find a needle in a haystack. They all claim to be unique, but the reality is that they offer nearly identical services. It's a never-ending race to the bottom, focused solely on pricing. But for those seeking more than just a cheaper deal, this approach falls flat. Consumers crave simplicity and want a provider that values their loyalty. They want a telecom company that goes beyond the basics and offers compelling benefits that make them feel special.

Telecom companies love to throw around buzzwords like "5G" and "4G" to attract customers. They make it sound like a big deal, but in truth, they fail to explain how it benefits us. Faster speeds and better connectivity might sound appealing, but without clear explanations, they're just empty promises. It's all smoke and mirrors, adding to the disappointment of the telecom experience. These labels become mere marketing tactics, making us feel like we're missing out on something great when, in reality, it's often just a hollow marketing ploy.

Consumers are not just looking for simplicity in their telecom services: they also seek personalisation.
A one-size-fits-all approach no longer satisfies their needs. Telecom providers should recognise this and offer consumers way to cater to individual preferences - like buy just for the need. Or remain utility. Moreover, rewarding loyalty should be a key aspect of telecom companies' strategies. Instead of solely focusing on attracting new customers from the competition, they should prioritise retaining their existing customer base. Loyalty programs that offer exclusive benefits, special discounts, or extra perks can make customers feel valued and appreciated. This personalised touch goes beyond price differentiation and establishes an emotional connection that keeps customers loyal in a sea of indistinguishable options.

In our view it's time for telecom companies to shift their focus from a race to the bottom in terms of pricing and prioritise simplicity, outstanding customer service, personalisation, and loyalty rewards.

By doing so, they can break free from the generic trap and forge lasting connections with their customers, creating an experience that's truly worth sticking around for.

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