Wednesday, April 23, 2008

More on Telecommunications -- AT&T's Success Story

As you know, Suzanne posted yesterday about how some forward-thinking telecommunications companies are marketing themselves more aggressively to keep their customers for the long-term. While it doesn't sound like rocket science, it wasn't so long ago that this just never happened. In the past, it was simply a mind-set of try to bring on as many customers as you lose, and you'll stay even. And, as direct marketers . . . as business-people . . . we know that this is an insane approach!

At the end of her post, Suzanne posed a couple of questions about why the traditional telecommunications giants weren't mentioned in this research and asked for reader comments/opinions.

Well, today, the Washington Post reports that AT&T has just announced a 21.5% gain in the first quarter of 2008. And, this in a time of economic slowdown! The article goes on to report that "The country's largest telecommunications company earned $3.46 billion in the quarter, compared with $2.85 billion in the first quarter of 2007. Revenue rose 6 percent, to $30.74 billion." Um . . . that's "B" for Billion.

Regarding the economic slowdown, CFO Richard G. Lindner said that "apart from some 'softness' in local phone lines, there was little sign of the weakness in the U.S. economy affecting the company.

Hmmm . . . so, the biggest of the traditional telecommunications firms continues to grow in a softening economy to the tune of over 21%. The article doesn't mention AT&T's marketing efforts specifically but it does mention that the growth is definitely spurred on by AT&T Mobility.

Now, Dave from the Motley Fool has his opinion as to why AT&T is so successful. Can you say iPhone? Here are Dave's thoughts, "I see two major trends pushing the wireless-data wave along: broadband-equipped laptops and the Apple iPhone. With corporate types and "prosumers" willing to pay a premium for mobile broadband connectivity, AT&T is capturing high-margin revenue as it rolls out this service across the U.S. And the game-changing iPhone is encouraging more people to browse the Web on a mobile device and buy audio and video media -- again, at a high margin."

It'll be interesting to see if AT&T's strategy of partnering with cool technology players pays off -- as it obviously thus far with Apple. It'll also be interesting to see if due to their intelligent partnering approach if they'll need to do what the other players are doing in terms of their marketing efforts.

From what we can tell, AT&T definitely hit the number 5 key trend in marketing from yesterday's post: "Telecoms use new emerging media channels to reach early adopters." AT&T's partnership with Apple definitely is reaching the early adopters or prosumers (as our friend Dave calls them). And those folks that I've seen who have purchased the iPhone definitely use all of it's functionality -- which equates to more revenue for AT&T.

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