Maximizing Response: Telecom Providers and Promotion in the Grocery Space

By: Karen Law, Sr. Client Marketing Manager, Shopper Marketing, Valassis
Published Friday, Sep 9, 2016

Maximizing Response: Telecom Providers and Promotion in the Grocery Space

Telecom– the Endless Churn Cycle

The telecom industry is a saturated, highly competitive market where 72 percent of U.S. adults report owning a smartphone¹. Like a revolving door, wireless providers are continually working to attract, cross-sell, up-sell and retain their customer base as annual customer churn rates average between 10 and 67 percent². This turnover is especially risky in the prepaid arena where most wireless providers and plans do not require a contract for service. In fact, in the next three to six months, over 20 percent of prepaid mobile phone consumers will be looking for a new phone and/or service provider.3

Finding territory in order to defend market share has landed telecom providers within grocery, mass merchants and dollar stores. In these venues they offer prepaid phones that range from $19 to $100+, as well as numerous airtime cards without contract limitations. Although the telecom industry has had a long-standing tradition for direct marketing and mass awareness advertising, this approach may not be the best fit in the grocery space. Most grocery retail volume is sourced from food, which is deeply rooted in couponing via consumer package good companies (CPGs), to generate sales and unit movement. Unfortunately, telecom providers cannot always pull these same promotional levers and must instead find a way to drive retail response without the benefit of coupons.

Opening the Door to Success

In order for telecom companies to create more stability and increase activation, it is important to understand which media resonate with telecom and grocery purchasers. Since promotional tactics such as coupons– the number one influencer for grocery– can be a challenge for telecom, ensuring that audience messaging is relevant (vs. a generalized approach) must be a priority. Print and digital work well together (and are top influencers) because they can reach a highly-targeted sub-set of consumers within the prioritized store geography. This approach should be a key consideration for telecom providers who want to generate sales at the grocers selling their products.


Source: Prosper Insights & Analytics, Jan. 2016. Media only (does not include articles or word of mouth). Media bolded = ranked within the top 10 media influencers for both grocery and telecom services purchases.

As an example, incorporating offline data into the targeting methodology can provide household information, traffic patterns and a sales footprint in proximity to the grocer (store radius), while digital data can link IP addresses and mobile device behavioral data at the sub–ZIP code level.  This creates a “digi-layer” that reaches the customer at home; then follows them where they live, work, shop and play.

This enables messaging to be customized to (for example) the senior who uses his prepaid phone with larger buttons for easy navigation , the mom purchasing a phone for her teenager for emergencies, and the Hispanic household preparing for travel. In addition, this type of message relevancy can provide a bridge to the retailer’s customer base, ensuring the message will still resonate with the recipient even though the retailer’s typical customer may look very different from the audience the telecom provider is trying to reach. All of these factors combine to help marketers better understand the consumer for greater response. These best practices were brought to life in a recent promotion where a telecom provider leveraged a targeted print and digital campaign across multiple retailers.  Not only did the telecom provider’s fully integrated program achieve double-digit net growth in the test grocers’ stores, but the grocers’ control stores  (where no print or digital media was distributed), experienced negative sales declines of nearly 5 percent.4  

Accelerating a Positive Trajectory: Five Tips for Promoting Telecom within Grocery          

  1. Understand the average ticket for the phones or airtime cards sold at the retailer to determine which price point to feature.
    • Money could be left on the table if the average spend is higher than the promoted product or offer.
  2. Consider a grocery cross-promotion to encourage greater basket ring and unit movement.
    • Price the offer higher than the lowest airtime card ($19) or phone option ($19.99). Example: Spend $25 and get $5 off your next trip at X grocer.
  3. Tying into a grocer’s fuel rewards program may not be enough of a motivator.
    • This relies on market dominance of the retailer, fuel locations, and reward options.
    • Can narrow the audience to the most loyal of that grocer’s shoppers, which may not match the telecom provider’s target audience.
  4. If a telecom product is sold in multiple retailers, be aware the dominant retailer will draw the sales from the other retailers and potentially cannibalize the market.
    • Suggest deploying specific retailer campaigns at separate times to increase volume opportunity.
  5. Consider media that is both targeted and influential to encourage engagement and response

Continuing to Move in the Right Direction  

Although grocery retail and telecom providers have very different metrics for success and response, when in partnership, they share the same goal of providing consumers with a wireless solution. To ensure foot traffic into the grocery store (especially when it may not have been the consumer’s first choice), it is vital to create a strategic blueprint that identifies shared Key Performance Indicators (KPI’s) and measures incremental new customers.

It is also important for telecom providers to go beyond measurement at the market/DMA level, and analyze data at a more granular level. With print and digital media, data can be tracked by store, ZIP-code and as an integrated campaign, making it is easier to identify sales/unit lift by retailer and providing a clearer picture of media effectiveness.

By taking the above strategies and tactics into consideration, a telecom provider can help manage the revolving customer door, and instead increase consumer relevance, response, and sales at their grocery partners– a win for everyone involved.

Source:  ¹Pew Research Center, Spring 2015 Global Attitudes survey; ²Database Marketing Institute - Churn reduction in the telecom industry, By Arthur Middleton Hughes, Aug. 30, 2016; 3 Prosper Insight & Analytics Monthly Consumer Survey, July 2016 Base: 881 respondents with their current mobile phone service described as prepaid service where they pay for the minutes used;  4Valassis/Client Proprietary Case Study, 2015