Trust is really important in sales. My decades of research have shown that effective selling is really about trust transfer. A salesperson builds trust with a prospect, and if they’re effective they transfer that trust to their statements about user needs and product capabilities, and that’s what ultimately sells. One thing that’s stood out for telcos for much of those decades I surveyed users about them was a high level of trust. Other than the experience of a “trusted peer” meaning a person of similar job description in a similar company, known to the buyer, the telcos got the highest rating in “trust”.
If you measure trust by degree, telco trust has slipped a bit since the early days, but even in early 2023 the majority of enterprises ranked telcos in the same spot they had twenty or more years ago. That’s good news on one hand, but what follows it isn’t quite so good. Where telcos are trusted is in the area of connection services, and that poses two related and profound challenges.
The most obvious problem is that connection services are the services that the telcos aren’t finding profitable enough. There are surely some old-like types who believe that there’s somehow a magic feature that, when added to connection services, equals superior profit potential. Students may recognize this as a take on the Universal Constant, the number that when multiplied by your answer, yields the correct answer. The majority of telco planners, though, admit that they need to move somehow beyond the connection services domain. In that beyond, telcos are afforded much less trust.
In areas like advanced messaging and connection security, for example, my enterprise contacts give telcos a trust rating of only 70% of the level they offer for connection services. For web hosting, the trust level falls to 55%, and for security to 38%. For IoT they get a 77% relative trust level on the device connection side and 51% on registration and security for devices. Trust for web hosting is at 40% relative to connection services trust. For edge computing and cloud computing, associated with IoT, trust is 49%. Outside of IoT, the trust level is 37% of that for connection services. Move to services that might boost profits, and you sacrifice trust.
That brings up the second challenge, which is the telcos’ own fear that issues that arise from services beyond the service of connection will end up contaminating their connection-service trust. That implies that telcos are essentially accepting that they’re unlikely to deliver what buyers want in those other services, meaning the buyers’ lack of trust is justified. That’s not a big surprise given that most telco excursions beyond simple connection services don’t turn out all that well. But the combination of what a salesperson would characterize as a “defeatist attitude” and that fear that a failure will hurt telcos’ reputation even for connection services is powerful enough to create pushback against out-of-connection adventures.
The trust issues, then, seem to bear out in terms of impact. But some of the trust data may also offer some guidance. First, take IoT. Trust on IoT is closer to trust on connection services than any other new service option. More significantly, trust associated with telco hosting services like edge computing is higher for IoT applications than for other types. Could telcos take advantage of this? Perhaps.
Even more telling is the second point. Enterprises, when asked about who they’d trust on a new network-related application, one for which the enterprise sees no current “incumbents”, they rank telcos only one point behind the cloud providers. Of course, this question is highly hypothetical but it does seem to suggest that telcos’ conservative behavior might be a presumptive asset when an enterprise is looking for a partner in unfamiliar territory.
One obvious question this all suggests is why telco efforts in IoT, device-centric as they are, haven’t been generally successful. Trust in telcos in IoT, as I’ve noted, is higher than almost anything except connection services, and yet the majority have (let’s admit it) largely booted their opportunity. I think the reason is that telcos are trusted in aspects of IoT that relate more to administration and connection than to the applications of IoT. That means that their efforts are naturally subordinate to the players who do relate to the applications. Some of those players also offer some of the services in device management, and that hampers telco efforts to pick up after them. But most significantly, telcos can’t develop the opportunity and a great majority of enterprises tell me that telco IoT service sales doesn’t connect with the state of IoT applications in the buyer domain. Instead of linking to evolving IoT, telco sales often approaches the prospects without regard for whether they have any applications in play at all. It’s like they believe that enterprises would start IoT with devices and not with a business case, which naturally first implicates an application strategy.
One of the things telco planners tell me to explain this situation is that the stories and even many analyst reports on 5G and other emerging technologies describe a market very different from the one that actually emerged. We all read the 5G hype, and while most of those planners deny believing it themselves, they say their management believed it. CTO types, they say, might have accepted the hype and promoted it internally to boost their budgets, and all management types may have tried hard to believe something that gave them a chance at revenue gains, even if they doubted the details in their hearts.
Speaking of doubts, though, we have to accept that telcos have a significant inferiority complex relative to non-connection applications. Three EU telcos who launched initiatives that have already failed or are failing admitted to me before their launches that “telcos are at a major disadvantage” in the very kinds of services they were launching. Was this a factor in failure, or was it an indication that these advanced services require skills telcos don’t have, and don’t understand enough about to even hire effectively for positions to support them?
These are the questions that telcos need to be answering, because the trust issue isn’t an absolute barrier to telco participation in those higher-level services. For IoT-related stuff, as I’ve already noted, telcos are trusted as much as cloud providers. That trust is fragile, though. They were once trusted for cloud services too, and that’s not the case now, or even recently. Yes, to leverage their real IoT opportunity they have to move fast, but they also have to move effectively, or they may kill off any hope of being trusted for any revenue-positive opportunities in the future.
