Why a second brand can be key to success for MNOs

MNOs face stiff competition for different customer segments from MVNOs. At the same time, their existing brand may not appeal to certain demographics. That’s why launching a second brand with the right partner and right platform can be key to success – and reaching different segments.

The MVNO model has enjoyed significant market growth, in recent years. Originally, MVNOs were primarily focused on low-cost service, often targeting youth segments, leveraging an existing retail footprint, or ethnic communities. More recently, MNOs have tried to tap into the market, exploring ways in which they can launch offers that capitalise on momentum in the MVNO industry.

The problem for MNOs is that if they try to compete with MVNOs through demographically targeted campaigns, they run the risk of eroding the original brand. At the same time, they may not have access to the right distribution channels that an MVNO is likely to already have in place.

An established brand may hold you back

MNOs are often established brands, well known to their customers for different attributes. However, that brand may not resonate as well with a different demographic. For example, an established brand might not be perceived as attractive by the youth segment.

In such cases, an MNO may consider repositioning itself by developing its existing brand and propositions, but that can be difficult to achieve in practice. There may simply be
too much ground to make up – and there is the risk of alienating existing customers, who may be perfectly happy with the status quo.

Another option is to create one or more completely new brands that are more appealing to customers in different segments. Such an approach has many advantages. It allows an MNO to create an identity that is more aligned with the needs of its desired target customers and which can be tailored to be more relevant to its audience.

For MNOs faced with agile start-ups, a second brand strategy provides a flexible template that can allow them to compete on different terms. In particular, a second brand allows the creation of both an entirely new identity that can be tuned to the needs of the target group, and it can also, if appropriate, be populated by a totally new team that has a different mind-set and experience from the parent company.

For MNOs seeking to evolve and differentiate their offers to reach new or underserved customer segments, a second brand is a powerful tool. Essentially, second brands represent a clear break with the past and a chance to build new awareness.

Digitalk offers rich experience of launching second brands

However, a second brand depends on two key aspects. First, rich understanding of the target customers and their needs, which requires deep insight and knowledge. Second, a platform that allows them to quickly launch the desired offer and which, in turn, can convert insight and knowledge into an iterative programme of improvements to ensure the competitive advantage is maintained and that the opportunity is correctly addressed. For this, the right platform partner is required.

At Digitalk, we have long-term experience of launching second brands and other MVNOs, which means we know what it takes to succeed. Our solutions and processes are optimised to help MNOs bring second brands to market and to ensure they evolve to meet changing market requirements.

To find out more about launching a second brand, and the important steps required to do that, download our report here.