Surviving In A Cluttered Market

By Tamra Burgwardt
President, TJB Telecom Consultants, Inc

Competitive Local Exchange Carriers (CLECs) are gaining footholds practically everywhere you look these days.  And the competition between CLECs and ILECs is becoming ever more aggressive.

That begs the question: in a marketplace full of competitors all vying for the attention of customers, how do smaller CLECs with limited offerings position themselves for success.  And at what cost can you gain market share when you don’t have the advertising muscle of the “Big Boys”? 

The answer to both questions is creativity and persistence.

So start with some deep thoughts about your offerings and how they're different from your competitors.  Then, we'll discuss how you can make sure potential customers know about you and what you have to offer. 

Make Peace, Not (Price) War
Competing head to head with companies with identical products results in price wars that can devastate smaller CLECs.   And cutting retail rates to buy market share is not a viable long-term option, particularly against larger competitors -- they'll eat you alive if you try that. 

The answer is to pinpoint a market niche and position your company to own that niche.  When you provide service to underserved groups, or when you provide services that aren't otherwise offered, you avoid pricing wars and set the stage for expansion into more competitive services.  Plus, you'll increase your profits, margins and attractiveness to investors.

So, if it's not too late, figure out what niches remain in your area.  That requires a creative view of your marketplace.

Find Different Customers
Many CLECs target small to medium sized businesses because they're underserved and, in urban areas, they often are located where facilities are plentiful.  So there's already lots of competition for those types of customers. 

But those same urban areas are full of dense residential developments and complexes.  Perhaps you can partner with a property management company to offer a bundled package to occupants at a fixed rate to eliminate the billing headaches of people buying individual services from multiple firms. 

Or, perhaps in your city, certain neighborhoods or ethnic groups are underserved by the existing carriers.  Once you offer services to them at a fair price, they will become a loyal customer base from which you can build. . 

Offer Rewards
Perhaps you don’t have a full slate of product offerings and you're losing customers to competitors with more offerings for their subscribers.  One answer: affiliate with vendors of outsourced service offerings. 

Studies have shown that consumers generally prefer to buy services and receive billing in a convergent manner.  Therefore, this is a golden opportunity for CLECs to affiliate with quality providers of auxiliary services such as conference calling, calling cards, prepaid services, wireless, internet subscription services, business services, and any number of other “market basket” purchases.

You also can offer rewards to other vendors for driving business your way.  Agent programs can provide incentives for pinpointed sales to affinity groups ranging from ethnic segments to business or personal membership organizations.  Specialty packages for specific groups in specific locales can be cost effective sales and marketing tools that can result in big gains in market share for a CLEC on a budget. 

When marketing in this way, don't forget about affinity groups in less urban areas.  With FCC changes and the increase in availability of dark fiber for transport in less urban areas, backhauling is becoming a more viable option for leveraging urban and suburban switches to less dense areas. 

The Back Door To Internet Users
Don’t forget the Internet piece of the puzzle.  As communications providers, CLECs are virtually required to offer the data services in conjunction with voice services.  Building a strong relationship with data training and services companies is a shortcut to reaching new online users. 

Finally, CLECs often forget an important asset as they grow bigger: the ability to design specific programs for specific groups.  This personalized approach to marketing has had proven results in many service-based companies. 

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Ours once was a one-size-fits-all industry.  With competition, though, it has emerged as an industry where ‘we can do that’ must be the operative words.  Look around your market and keep those words in mind -- they will bring you opportunities you never thought you had.