Earlier this month, CCS Insight published a comprehensive review of UK operators’ strategies for small businesses. Clients can access the report here; non-clients can contact us for how to obtain a copy.
Small businesses, defined as having fewer than 250 employees, have become a major target for UK telecom providers. On the one hand, traditionally consumer-focussed providers such as Three and Sky are aiming to establish an enterprise foothold and gain share in a market ripe for disruption. On the other, traditional players including BT, Virgin Media O2 and Vodafone are seeking growth in turbulent times.
The pandemic hit the small business sector particularly hard, forcing thousands to make radical operational changes just to survive. As lockdowns began, many realized they lacked the technical skills, resources and know-how to quickly shift their entire business to online platforms.
Almost overnight, the segment became hugely reliant on connectivity and IT services just to continue with the fundamentals — advertising goods, fulfilling orders, taking payments and managing bookings. It was a huge challenge to a sector that’s typically time-poor, risk-averse and sometimes unable or unwilling to make significant technology investments.
According to the latest data from the UK government, small businesses have been the fastest-growing group in the economy over the past two decades. At the start of 2021, there were nearly 5.6 million of them.
But operators have traditionally struggled to effectively serve this market. Previous offerings have been too complicated, lacking sufficient guidance and advice. However, there are encouraging signs that this is changing, and our report highlights many initiatives with a fresh approach.
For example, BT’s Digital Boost offers one-to-one advice, group workshops and learning resources to organizations including start-ups and charities. It also recently launched its Digital Marketing Hub, an online advertising platform to help small companies expand their reach and target new customers. Unveiling the offering, BT said its research shows that 40% of UK small businesses — about 2.4 million — aren’t yet using paid digital media advertising.
Vodafone is seeking to move away from a traditional sales-first approach to one more focussed on support, impartial advice and shared learning. A leading element is the V-Hub platform, a knowledge centre for small businesses. It offers unbiased one-to-one consultations in areas such as website design, cybersecurity and online retail. V-Hub doesn’t sell any services, freeing it to build trust among customers and bring businesses together.
Virgin Media O2 has launched several offers for small businesses since it formed just over 14 months ago. These include its first combined broadband and mobile offer, Volt; the Get More technology fund, which enables companies to put 10% of the cost of their plan toward new devices such as smartphones, tablets and desktops; and the Net Zero Hub, a service to help small businesses measure their carbon footprint, set targets and develop a net zero strategy.
Of the challenger players, Three is the one to watch. It sees the business sector as a leading growth opportunity as it seeks to build on its consumer heritage and take advantage of a strong portfolio of 5G spectrum.
Its efforts to disrupt with more affordable pricing are also well-timed given current economic uncertainty which could tempt some companies to seek alternative providers.
Three recently unveiled a new offering, Business Adapt, targeting companies with 50 to 249 employees. It said the launch reflects greater-than-anticipated demand from larger companies, which pushed Three to expand beyond its initial focus on micro organizations sooner than expected.
Its success, however, will depend on how quickly it can turn around the perception of its network — and how well it can raise the profile of its brand in a market where it has little experience.
With others such as TalkTalk, Tesco Mobile, Gamma Telecom and Sky all seeking to bolster their presence, competition in this market is only going to heat up.
Operators have an important role to play in supporting the growth of small businesses, many of which were forced into making radical operational changes because of Covid-19 lockdowns. These same small businesses now face new challenges through rising energy prices and higher inflation. By working more collaboratively, developing more dedicated services and improving accessibility and support, they can earn new revenue while supporting the UK’s post-pandemic recovery.
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