Speedy

International Seminar & Conference
on Learning Organization
Buying Process for Fixed
Broadband Product
Case Study : Telkom Speedy
Dhata Praditya
PT. Telekomunikasi Indonesia, Tbk.
Bandung, 4 Des ‘13
OUTLINE
1
2
3
4
INTRODUCTION
RESEARCH
RESULT
CONCLUSION AND
DISCUSSION
C
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INTRODUCTION
3
Speedy is a brand of Internet access service end-to-end for use in residential or
small and medium business sized.
This service guarantees high speed data access according to internet package
with access speed options ranging from 384 kbps to 3 Mbps per line.
DSLAM / GPON
TOTAL BROADBAND NASIONAL
Ytd Sep 2012
Others
Fixed;
64.020 ; 1%
Fastnet;
217.563 ; 1%
Speedy;
2.131.257 ;
13%
Ytd Sep 2013
Market
Growth
TOTAL
Mobile
Broadband;
14.002.327 ;
85%
FIXED BROADBAND NASIONAL
55%
Others
Fixed;
58.343 ;
0,2%
Others
Fixed;
64.020 ; 3%
Mobile
Broadband;
22.208.311
; 87,4%
Fastnet;
246.903 ;
1,0%
Biznet
0,30%
1,52%
Market
Growth
FBB
Speedy;
2.131.257 ;
88%
Fastnet;
217.563 ;
9%
32,6%
Speedy;
2.893.965 ;
11,4%
Market Share (FBB) - Nasional
Others
-24,%
-5,2%
LIS Growth
Market Growth
Ytd Sep 2013
Ytd Sep 2012
7,72%
13,5%
Speedy
Others
Biznet
Source : SPIRE Sep 2013
Fastnet
90,46%
Fastnet;
246.903 ;
8%
Speedy;
2.893.965 ;
90%
Market Share (FBB) - Jabodetabek
0,19%
4,65%
LIS Growth
-35%
Market Growth
-5,1%
FBB 28,04%
FBB 35,7%
Fastnet
Others
Fixed;
58.343 ; 2%
Speedy
22,55%
11,4%
72,61%
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RESEARCH
7
The buying process is the set of steps that a customer chooses to go through
with the goal of satisfying a need. (Hudadoff, Pamela. 2009).
The consumer decision making is triggered by the recognition of a problem or
arousal of a need, followed by search for information, then consumer follows
evaluation of alternatives and goes with purchasing the alternatives which are
attractive, and in post purchase, consumer experience product and outcome
may be satisfaction or dissatisfaction. (Blackwell et al., 1995)(Tamboli, Sajid
2008)
Need Recognition &
Problem Awareness
Information Search
Evaluation of
Alternatives
Purchase
Post Purchase
Evaluation
Blackwell et al., 1995
Awareness /
Understanding
• How well do the
different channels
create awareness
of Speedy
• Are there
sufficient
marketing
initiatives?
Interest
• Does the product
capture my
attention?
• Is it competitive
versus similar
offerings?
Trial
• How can I try
Speedy?
• Does the trial
experience
convince me to
buy?
Accept & Buy
• How easy is the
order process?
• How satisfying is
the installation?
Use &
Satisfaction
• Service quality &
user experience?
• Am I satisfied in
the long-term?
Buying
Process
Analysis
• Go-to-Market
Research
• Operational
Assessment
Buying
Process
Modelling
On Progress
Speedy Revitalization
Program
- GTP Assignment in TELKOM
Broadband Division
- Implementation Phase in 2 selected
areas
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RESULT
11
Channels to create awareness and
understanding of Speedy
Limited display and demonstration
of Speedy in Plasa Telkom
Speedy
Regular
Speedy
Instan
Speedy
Gold
•
•
Brochure focused on pricing by
speed and not on the quality of
ADSL/fibre broadband (e.g:
dedicated connection to ensure
speed)
A simple standee on Speedy at the
Plasa does not communicate as well
as a live demo
Broadband internet access
for family starting from
384kbps to 100Mbps
A Pay-as-You-Use offering
that allow non-customer to
access through prepaid
147
Brochure available on the
pricing in the shop
Only standalone product
available via inbound sales; no
bundles
No product differentiation
across fibre or ADSL
SME broadband
1
Telkom Flexi
2
Speedy
3
Fixed phone
4
UseeTV
5
Delima & Content
6
Indonesia Wi-Fi
Speedy 3 main products listed on the website
•
•
Not focusing on superior
quality and experience of fibre
broadband
No product categorization by
quality
Awareness
Interest
•
Could not obtain info regarding
bundle on inbound call
•
To subscribe to USeeTV you need
to have Speedy
Trial
Accept/Buy
Use
Speedy Websites
Product Description
•
Only brief available product
info
•
No link to Telkom Speedy
website where more info on
pricing, package are available
Design
•
•
Wordy, non-visual design
fails to capture reader
attention
Hard to appreciate product
Pricing
•
Only standard pricing on the
website, no promotions.
•
No bundle package or pricing
available
As a key channel to create awareness and understanding of the product, more attention
should be paid to communication product value and providing relevant information
Awareness
Interest
Trial
Accept/Buy
Use
Speedy promotional price analysis
Price (Rp 000/ month)
Product / Pricing Strategies
2500
2000
30M offer is newly
introduced
Speedy Standard offer
2035
1.695
1500
995
1000
Speedy
Promotional
Price
645
500
195
60 195
384K
512K
1M
350
235
1.5M
Fastnet Home &
Kid offer
695
350
295
0
695
2M
3M
4M
6M
8M
12M
30M
Bandwidth
1. Speedy maintains the same
bandwidth at a reduce price
2. First Media strategy focuses
on higher bandwidth. Price
remains the same but they
upgraded 1.5Mbps  4Mbps
and introduced a 30Mbps
offering
3. Speedy Promotional Price is
still not as attractive as First
Media
First Media offer described here is based on offer before July-2013
Awareness
Interest
Trial
Accept/Buy
Use
MBB providers continue to have an edge in
pricing and speed offer
FUP
Speed
Price
(Rp,000)
Super pro
500M/day
14.7
275
Super
advance
500M/day
3.1
150
Basic
500M/day
768K
90
Quota
(GB)
Speed
Price
(Rp,000)
Broom 100
2
1M
100
Broom150
3
1M
150
Broom200
5
2M
2.5
Plans
Plans
Speedy Comparison
Speedy
1st
month
2nd -12th
month
Tariff
Speedy 384
Pro-rata
99k
195k
Speedy 512
Pro-rata
125k
295k
200
Speedy 1Mbps
Pro-rata
295k
645k
7.2M
100
Speedy 2Mbps
Pro-rata
455k
995k
Speedy 3Mbps
Pro-rata
645K
1695k
6
7.2M
200
Plans
Quota
(MB)
Speed
Price
(Rp, 000)
XL99
3,600
7.2M
99
XL49
1,500
7.2M
49
XL25
600
7.2M
25
Broom quota
100
Broom quota
200
Awareness
Interest
Trial
Accept/Buy
Churn
Multiple, area-specific promotions
Many schemes, no loyalty management
Promotions
Speedy
1st
month
2nd -12th
month
Tariff
Speedy 384
pro-rata
99k
195k
Speedy 512
pro-rata
195k
295k
Speedy 1Mbps
pro-rata
295k
645k
Speedy 2Mbps
pro-rata
645k
995k
Speedy 3Mbps
pro-rata
995K
1695k
Speedy
1st
month
2nd -12th
month
Tariff
Speedy 512
pro-rata
125k
125k
Speedy 1Mbps
pro-rata
150k
195k
Speedy 2Mbps
pro-rata
275k
275k
Speedy 3Mbps
pro-rata
335K
335k
1st -6th
month
7th 30th
month
Speedy 384
50k
99k
Speedy 512
99k
125k
Speedy
User Reaction
1.
Multiple pricing for the same product leads
to dissatisfaction among subscribers not
offered the promotional pricing
2.
Difficult for Telkom to refuse customer
requesting for similar promotional price
3.
‘Below the line’ promotion: narrow effect
on awareness & interest
1
Community
pricing
2
Acquisition
pricing
1st month
Speedy
2nd -12th
month
Standard
Tariff
Speedy 384kbps
pro-rata
99k
195k
Speedy 512kbps
pro-rata
125k
295k
3
Speedy 1Mbps
pro-rata
295k
645k
Low
occupancy
pricing
Speedy 2Mbps
pro-rata
455k
995k
Speedy 3Mbps
pro-rata
645K
1695k
Awareness
Speedy latest promotional pricing
Interest
Trial
Accept/Buy
Use
PayTV bundle comparison: Telkom, First Media
Telkom launched Indihome bundle to compete with First Media Combo Package
Indihome ‘Gold’
FBB: 2Mbps
Not available
TV:yet51 ch + 1 mini pack
Price: Rp 320K
FBB: 3Mbps
TV: 51 ch + 1 mini pack
Price: Rp 385K
FBB: 5Mbps
TV: 51 ch + 1 mini pack
Price: Rp 435K
First Media Combo pack
FBB: 2Mbps
TV: 56 SD and 12 HD channels
Price: Rp 280K
POTS:
Free calls from
20:00 – 06:00
VAS:
• 100MB storage
• Melon
• 12 mth anti-virus
FBB: 3Mbps
TV: 64 SD and 17 HD channels
Price: Rp 390K
FBB: 5Mbps
TV: 92 SD and 25 HD channels
Price: Rp 550K
First Media offerings before July-2013
•
Currently only low-speed bundle available (512kbps and 1Mbps) for Indihome, therefore not very attractive to
subscribers
•
Competitiveness of Indihome bundle:
•
Price: Slightly cheaper but not compelling enough to influence a switch for First Media’s subscriber
•
Broadband Speed: Not superior to First Media
•
TV: Fewer channels and lack of HD
•
VAS: Free POTS at certain time may attract a certain segment. Storage and Melon may not be perceive to be of
high value due to availability of free OTT offerings
Awareness
Interest
Trial
Accept/Buy
Use
Wi-Fi Hotspot
Major element of FBB offer is semi-mobility from Wi-Fi
Issues of awareness & use
Promotion
1. Service availability is not communicated on the
offer to the subscriber
• Not actively promoted to be part of the VAS
in the bundles offerings
2. No info on available hotspot locations (no map
on availability
3. Login using Speedy ID is cumbersome
4. issues that need to be solved:
• User will be log out every 60 mins
• 30% hotspot not working
Awareness
Interest
Trial
Accept/Buy
Use
Speedy Instan: Pre-paid service
Needs to be an effective broadband trial service with good up-sell to post-paid
Available to non-Speedy Subscribers
Aims to be a trial mechanism to encourage
adoption of Fixed Broadband for pre-wire
users
Issues
• Speed: Only available for 512kbps
• Price: Could cannibalized subscription of Speedy
(30 days of Speedy Instan is Rp 150k against
subscription at Rp 125k)
• Conversion: No proactive up-sell to convert Speedy
Instan  Speedy subscription
Speedy
1st month
2nd – 12th
month
Standard
Tariff
Speedy 384
pro-rata
99k
195k
Speedy 512
pro-rata
125k
295k
Speedy 1Mbps
pro-rata
295k
645k
Speedy 2Mbps
pro-rata
455k
995k
Speedy 3Mbps
pro-rata
645K
1695k
Speedy latest promotional pricing
Awareness
Interest
Trial
Accept/Buy
Use
Service Provisioning Performance
High drop in take up between Sales  Put-to-Sales
10%
Sales
Promo
Call Offered Abandon
51,370
7,291
ACD Call
4,342
3,855
89%
44,079
PS
1,677
UCS-R2
235
UCS-R3
44%
17%
86%
656
1%
592
90%
40%
Source: IBC147 Mar-2013
•
•
Issues such as long lead time in service activation lead
to only low number of subscribers finally taking the
service
Long time for service provisioning could be attributed
to:
•
•
Drop wire performed by another party therefore
it takes one day to confirm availability to the
engineer performing installation
Gap exists in both Jakarta Timur and Selatan
800
700
600
500
400
300
200
100
0
60%
44%
Sales
Source: IBC147 Apr
•
Situation seems to be more severe in Jakarta Timur
•
Some other reason raised :
•
Availability of modem
Password activation takes more than 1 hour.
Engineer comes back another day leading to delay
Awareness
Interest
Trial
Accept/Buy
Use
Churn management
Hierarchy of Churn reasons (100%)
Reasons for Customer Churn
Efficiencies
37%
Leave Speedy
(95%)
Move location
(5%)
Moved
5%
Connection
problem
Connection
unreliable
Competition
Faulty
modem
Expensive
Other
FBB
Efficiencies
(combination
of reason)
No Interest
8%
Not
interested
Expensive
13%
Connection
21%
Competitor
16%
1. Unable to actively diagnose the network to predict
churn
Other
MBB
2. No customized special offer to retain customer
expressing churn intention
3. No loyalty reward
Source: Telkom
4. No ‘win back’ strategy (e.g pre-wire fallback)
Awareness
Interest
Trial
Accept/Buy
Use
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CONCLUSION &
DISCUSSION
Buying Process: Gap Analysis
Awareness &
Understand
Interest
 Understanding of high
bandwidth subscription
 Low bandwidth offerings
starting at 384kbps
 Inefficient channels
 In Plasa shop, Speedy’s value
proposition not well
communicated and no live
demo.
 Brochure on Speedy is
simple without much
description. No brochure on
bundled offerings.
 Web site navigation is poor
and does not present
information clearly.
 Bundle:
 POTS + Speedy (N/A)
 Triple-play (not as
attractive compared to
First Media and late to
market)
 Quad-play (N/A)
 Pricing:
 Nationwide promotional
pricing still expensive
 Localized promo create
confusion as not open to
all
 Wi-Fi VAS:
 No info on Wi-Fi hotspot
location
 30% of Wi-Fi hotspot not
working
Trial
 Pre-wire trial only
available for 1 month (at
512kbps). Unable to truly
experience benefit of
broadband
 No proactive calls to
convert trial customers to
paying customers
 No trial available for
regular Speedy services
(1Mbps and above)
Accept & Buy
 Service provisioning takes
a long time compare to
competitor (40% drop for
Selantan. 38% drop for
Timur).
 Speedy takes at least 3
days against competitor
1 day
 drop wire installation
causes delay
 Need to wait at least 1
hour after modem
install for password
generation
Use & Enjoy
 Price still expensive
 No discount for loyal
customers
 Competitor quality, branding
and price
 Install done in 1 day
 Perceive more stable
connection
 Aggressive pricing in
targeted area
 Network problem
 Often attributed to modem
with long hours taken for
restoration
 No churn management for
customer expressing churn.
 Just redirect to Plasa.
 No control of subs
cancelling and re-signing
with better promotion
Recommendations
• Free upgrade to higher bandwidth is a must. However it requires wider coverage
and infrastructure betterment.
• To encourage take-up, bundling product either double play with POTS or triple
play combine with IPTV and POTS should be offered. With 75% of Telkom
subscribers on POTS only, this strategy could be a quick win to promote adoption.
This could also helpful to prevent POTS revenue disruption.
• To different strategy approached to reduce churn rate: Prevention using prediction
tools and giving loyalty reward; Deflection using win back offer especially in high
risk area.
• Improvement in website with dynamic and complete information. The website
could also use for advertising promo media with other social media.
• Improvement in network database, and data integration inter-provisioning tools.
“Spirit lebih dahsyat dari
strategi.”
(Arief Yahya, CEO Telkom)
Jayalah Indonesia
Jayalah Telkom Indonesia
Thank