As Reliance Jio announces end to its free offer period, we take a look at marketing strategy of using freebies to lure customers deployed by it and other top telecom players of using freebies to
A freemonger parks his car in a restricted area, gloating over the free space for the last three months. His car gets towed away, leaving his wise friend to crack, "Do not get used to getting everything free."
The ad by Idea Cellular directly attacks Reliance Jio, free 4G offer. The offer which started for the last five months was extended in January for another three months, wreaking havoc in the telecom market. Jio recently announced it crossed 100 million subscribers. Airtel has 42 million as on November, according to Telecom Regulatory Authority of India figures.
All the top three telcom companies had started countering Jio, after being in the wait-and-watch mode for three-months. Idea has been the only one to directly attack. Marketing experts say that Idea's strategy might not be the best foot forward.
"Idea marketing strategy may not be right. The consumers of Jio are fairly satisfied and there is nothing wrong in getting something free. The successful business is the one which will be able to offer a service differentiator," says Pradyuman Maheshwari, founder of MxM India, a media marketing agency.
Free is good
Indian consumers who have been fairly pampered with enormous discounts from e-commerce sites and other retailers, do not view free products suspiciously anymore. The campaign also opened the market widely for high-speed 4G data services, pushing many consumers to purchase 4G compatible handsets, only to avail free services. "Nowhere in the world has it happened that a player (telecom) entered the market so late and become so successful," says Alok Shende, co-founder and lead analyst of Ascentius Consulting.
Piggybacking on free offers
Unlike Idea, Airtel has chosen to bring back its customers by offering a similar sounding offer. The offer claims to give a certain amount of free 4G data per month for a year, if they subscribe to it before the end of February. The well-timed plan is aimed at attracting those subscribers who are lamenting over the possible end of Jio's free offer by March. While it is a standard offering, Airtel has smartly marketed it as free, to attract subscribers used to free or almost-free offers.
Vodafone, however, chose to go mid-way between these strategies. It has a unique offer called Supernet 4G which allows subscribers to browse 4G for an entire hour for an amount, targeting those who do not use data all day long. However, these are only the visible strategies. Telcos have other armoury to protect data sales, which is their growth business.
"Telcos give away more delicious offers but only to those subscribers who are willing to jump," explains Shende. "They track behavioural patterns, loyal subscribers and large spenders, and come up with a propensity score and give specialised offers. They would not give the offer to those who would not be swayed by free offering in the market," he says.
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