To Niche or Not to Niche? That is the Question MVNOs Must Ask!

What’s my niche? Who am I going to target? Where can I generate more sales by having a laser focus on a specific target audience?

These are questions that every MVNO should be asking themselves so they don’t wind up as a “me-too” provider or continue to fuel the price race to the bottom.

If you’ve ever had the discussion with your management team on Strategy vs. Tactics, look at finding your niche as your strategy and using your differentiator (that word just keeps coming up!) as one of your tactics. Let’s dig a little deeper.

I’ve used the word niche a couple of times, but what is a NICHE? Webster’s defines it in many ways but for our purposes, it is “a specialized segment of the market for a particular kind of product or service.” To give further meaning, it “denotes or relates to products, services or interests that appeal to a small, specialized section of the population.”

What is your MVNO’s appeal? Do you target specific ethnic groups? Are you offering a specific handset? Does your cost of service decrease to your customers with referrals (see Visible’s latest ads with actor Kevin Bacon)? Or do you think that copying a successful SIM-only MVNO is the best way to go?

STRATEGY vs. TACTICS

I’ve written before about having a differentiator and a distribution plan to support it. Let’s look at some strategies. Red Pocket Mobile (https://www.redpocket.com/) decided to have a direct conversation with their customers, that was their strategy. How did they accomplish this? By implementing various tactics like greatly reduced dependency on the dealer channel and embracing direct-to-consumer sales, mostly through online efforts. Visible (mentioned above, www.visible.com), Verizon’s entre,’ offers just one rate plan, $40 for unlimited talk, text, and data, taxes and fees included. Their Strategy…… No stores. No commissions. Unlimited, Unlimited, Unlimited. But, you better know how to connect to the internet and download their app.

Their Tactics? Keep it simple, appeal to the younger crowd, do everything online.

Mint Mobile’s (www.mintmobile.com) website states, “No Retail Stores No inflated prices – just Huge, Direct-to-You Savings on Premium Wireless.” Again, their strategy is to keep costs low by forgoing brick and mortar. One of their tactics is to offer discounted rates for purchasing multiple months in advance. AT&T Prepaid launched their “purchase in advance” plan in 2019 and that was covered by BestMVNO. Jeff Moore at Wave 7 Research recently reported that this plan from AT&T is now available at Target and Walmart Stores.

What these MVNOs have successfully done is carve out their niche. They are not trying to be everything to everyone. They have a defined market for their products and services. But, with the changing times and hyper-competitiveness, it’s not always easy to keep your differentiator.

Carriers vs. MVNOs

I had the opportunity to catch up recently with my friend and colleague Peter Adderton, Founder of Boost Mobile and industry advocate to MVNOs. We had a long discussion on MVNO’s finding their “niche,” or target market and the challenges with the lines now blurring between the carriers and MVNOs.

“In the early days of the MVNO wholesale model, there was a clear line between “church and state,” or retail and wholesale,” said Adderton. “MVNOs Point of Difference for carriers was to market to a specific demographic that the carriers were not talking to and they weren’t a threat to the carrier’s core business. Now, with 130% penetration in the US Market, the lines are blurred and the carriers are now going after these niches as the market of prepaid and postpaid begin to blur as well .”

MVNOs are facing increased competition not only from each other but from the carriers as well. “You have to be different; offering the same unlimited plans is not going to cut it as MVNO margins are not owner economics,” Adderton continued,” you must have a brand, product, and unique service that speaks directly to your customers .”

Additionally, when I spoke with Harjot Saluja from Reach Mobile, (https://www.reachmobile.com/), he agreed that MVNOs have to do a better job of both explaining their differentiator and targeting a specific market. "Mobile Service is one of the most important utilities of our time, but at the end of the day, talk, text, and data is a commodity. Reach Mobile stands out in offering a simple, human-centric and commonsense mobile service,” Saluja stated. “While MVNOs are racing to the bottom of the price wars, the customer is paying for it one way or another. We offer consumers the best network, honest pricing, no contracts or gotchas, and the opportunity to make the world a better place. For us, it’s a race to the top in overall customer experience excellence."

Do You Have A Niche?

The bottom line is that innovators succeed where others don’t. I ask many of my contacts who own or run an MVNO, “what is different about your service, and why would I buy from you?” The answers vary greatly except for those who have found their niche and stuck to it. There are still a few areas that are untapped by both the carriers and MVNOs, more to come on that next time.

Good Selling!

Jon