Growing price pressures and rising competition were impacting profitability and customer loyalty at one of the largest mobile providers in the world. A new pricing strategy that focused on system solutions helped transform the sales organization and the bottom line.
As one of the leaders in mobile telecommunications, this operator had been achieving tremendous growth for several years. But the introduction of number portability, which allows consumers to switch providers while maintaining their mobile number, threatened to increase churn. At the same time, deregulation was leading to a change in pricing policies for business customers, and the company had no strategy to navigate that change.
The company asked BCG to help it meet several goals:
To design the new pricing strategy, BCG conducted a customer survey and cross-industry benchmarking to detail pricing options, understand potential competitor reactions, and estimate the impact of different approaches. With that information, the team determined that the optimal solution was to combine the sales of solutions with customized pricing.
BCG then segmented enterprise users by value to develop an optimal pricing scheme based on clear criteria. Finally, the team designed new pricing guidelines and sales processes, and it identified clear KPIs by which to measure progress.
In just three years, the percentage of both locked-in customers and revenue skyrocketed as a result of the new pricing strategy. The company was able to maintain annual profits that otherwise would have been lost—a value estimated to be in the hundreds of millions of dollars.