Several years ago, our colleague Mr Tony Poulos did an interview with a senior executive from Tuenti. At the time it was fascinating because Tuenti started life as a social media company, was bought by Telefonica and the telecoms giant was busy turning it into an MVNO.
We spotted the name Tuenti again very recently while leafing through the latest paper from Openet, entitled simply ‘Second Brand’. Telefonica took the brand and is using it to address a specific market segment. Tuenti now operates in five markets across Latin America – as a second brand.
The paper provides multiple examples of second brands and how and where they operate, as well as the reasons for establishing them. These reasons extend well beyond the need to address a particular market segment. The paper covers the economics, processes, organisational structures and, of course, discusses the concept as a solution to the ‘legacy nightmare’.
The youth market is an obvious target for large established operators. This segment wants something cool, something that is easy to use, available via an app and, most importantly, is not what their parents use. And delivering all of that as the established brand is almost impossible.
The differences between an MVNO and a second brand are not great and there are, of course, examples of established operators launching MVNOs as their second brand. A second brand can leverage the wholesale relationships and agreements already established by the parent company, whereas an MVNO normally does not have a parent company that is an established operator and therefore cannot take advantage of those relationships.
There are many key issues that are discussed in the paper. Perhaps the most important is the clarity of vision behind a second brand. It is essential that the segment (whether IoT, youth, consumer or small business), the channels, the touch points and messaging are crystal clear and well executed. If these elements are not in place then an operator risks failure. It could easily end up confusing its audience, cannibalising its own customers and ultimately failing to take advantage of what can be a highly successful way of increasing market share, addressing new audiences and escaping the tyranny of legacy systems, processes and politics.
The choices and delivery options are now out there for operators to take advantage of and Openet now has a range of papers that discuss these.
The vital thing, whether the operator focuses on zero touch customer care, a community approach to both care and marketing or a membership model, is the clarity of vision and execution.
This paper is a definite ‘recommended read’ if there is even the slightest discussion in your organization about the risks and rewards of a second brand. You can also be part of a webinar on Second Brands, the fast route to digital, click here to register.