Assignment: Business-to-Business Marketing
Case Study
O2 is a subsidiary of Spain's national telephone provider, Telefonia, and is the UK's second largest provider of telecommunications services. The company is well known for its mobile telephone systems. In the corporate market, O2 faces strong competition from Vodaphone, T-Mobile, and Orange, and during 2003 it became clear that the company was being forced to compete on price. O2 senior management realised that competing on price will severely affect the company's profitability, so they decided to shift their customer mindset away from price and towards value for money.
An O2 Sales Academy was set up in conjunction with sales training company, Imparta. The aims of the Academy were as follows:
a) to increase revenue and profitability;
b) to change behaviour through a holistic approach to building sales effectiveness;
c) to differentiate O2 by creating value through sales;
d) to build deeper, more strategic client relationships;
e) to be recognised as world class in sales approach, customer service, and sales training.
The first phase of the Academy was to change the mindset of the sales force so that they would understand why their behaviour in the field needed to change.
The second phase involved ensuring that people were applying the new thinking in the field: this involved extensive coaching and mentoring of field salespeople, and also some mentoring of managers to ensure that the new way of thinking would persist in future. Desk-based salespeople and support staff were included in the programme, since salespeople trying to implement the new approach would need assistance from support staff.
The third phase of the programme provided individual learning programmes for salespeople, designed to fill in any gaps and address any weaknesses in their skill base. Finally, the fourth phase was aimed at skilled salespeople, helping them to move on to Trusted Advisor status. This gave an opportunity for the high-flyers to gain greater recognition and to progress in their careers.
Customised programmes were developed to reflect the experience level of the salespeople and the market segment they were expected to address. Inexperienced salespeople or those with low skill levels were offered a foundation course. Training was delivered in three stages: activities before a workshop, then an interactive workshop, then field activities following on from the workshop, including online mentoring, coaching, and the use of application tools.
Ten years on, the programme is still running. O2 customers enjoy many added-value privileges to back up the drive away from price competition. Customers such as French maker and distributor of building materials Saint-Gobain use O2 to provide a complete telecoms package. Following an in-depth analysis of the company's telecoms needs, O2 salespeople were able to offer a complete redesign of over 13,000 connections, including mobile, landline, and broadband.
Special tariffs were developed which saved Saint-Gobain 33 percent across all services without compromising O2's profitability, creating a turnover totalling £2.3 million per annum for O2. Saint-Gobain says that "the greatest asset of O2 is its people. The network is a given, and is to a degree visible, so it is people who make the difference."
O2 has taken an integrated approach to its sales programme. First, it has recognised a problem in the market in respect of its sales programme. Second, it has provided salespeople with the necessary product adaptations to overcome the problem. Third, it has established a comprehensive and ongoing training programme to ensure that salespeople are able to exploit the new approach to the maximum.
Case Study Questions
i. Discuss the reason(s) why a company like Saint-Gobain switched to O2. Discuss the importance of establishing long-term buyer-seller relationships in the context of Saint-Gobain and O2.
ii. Discuss the reason(s) why O2 has a Trusted Advisor status for salespeople. In addition to the Trusted Advisor and training programmes, discuss other possible programmes that O2 may have implemented to effectively manage the company's salesforce.