Vodafone Business taps scale and local know-how in SME growth strategy

Being a small and medium-size enterprise (SME) champion is not the only element of Vodafone Business’s growth plan. But its SME strategy has “progressed the most” and, in short, “is working,” said Fánan Henriques, International and EU Cluster Director at Vodafone Business, in an interview with Inform, in which he explained why the SME segment is central to Vodafone Business’s growth strategy.

The operator is now more than halfway through a four-year plan for the enterprise division, which it unveiled in early 2021 with the ambition to become an “SME champion” across its markets in Europe and Africa. The other three pillars are increasing its share of Enterprise gigabit connectivity, supporting the public sector digitization, and attending SOHOs growing business needs.

As part of its plan Vodafone aspires to be a trusted partner for SMEs rather than just a connectivity provider. To support its mission, the telco developed an advisory service for small businesses, called V-Hub, and built a digital Business Marketplace for its ICT portfolio. It has also made it easier for businesses to find what they need through digital customer engagement, which complements traditional physical channels in an omnichannel approach.

Henriques acknowledges that telcos historically have not done a good job of exploring the SME opportunity. However, he does not believe that the market is too fragmented and difficult for them to serve profitably.

“Telcos are the only scaled ICT players that have managed to crack into the SME market. Digital solution providers partner with us to access the market together. We have the channel capillarity and customer intimacy,” he said.

Beyond resale

Vodafone’s Business Marketplace, which first launched in Italy in late 2016, has filled out its ICT portfolio beyond its own propositions, with strategic partnerships with cloud and security providers, such as Google, Lookout, Microsoft, as well as local providers. It is now available in all the operator’s European markets, with one exception that will be addressed this year.

However, Henriques stressed that the marketplace is not a “pure resale” shop. The operator offers solutions from third-party partners, provides a service layer on top, and advises customers via V-Hub so that there is “value-add” for buying from Vodafone Business. “Partnering is an important part of the strategy … but we’re not a reselling pipe,” he said.

Examples of some of the offerings that Vodafone Business has created are the “business boost” packages for small businesses that were introduced in May 2021. These include digital tools to help SMEs reach new customers and grow their businesses, such as digital marketing and e-commerce.

Global development, local execution

The implementation of the SME strategy exemplifies Vodafone’s centralized platform model for developing services across its markets. Products are designed centrally but the sales channels are managed locally. This enables the operator to scale its portfolio and operational systems while giving its local operating companies freedom to determine the go-to-market strategy in their countries because they are closer to the customers and the channel landscape varies from one market to another.

“We have a consistency of execution across the Vodafone markets with the solution platforms, propositions and engagement that leverages the scale of Vodafone, and at the same time we can make it local. We’ve done that in all the layers from proposition down to [customer interaction],” according to Henriques.

An example is V-Hub. Vodafone Business created the V-Hub digital advisory service in July 2020 to help SMEs better understand, build confidence and adopt digital tools to grow, protect and sustain their business. After initially launching in four markets (Italy, Germany, Spain, and the UK) in the early months of the COVID-19 pandemic, the service is now available in 14 countries and has had more than 5 million unique visitors to date.

Customer engagement

Henriques said V-Hub is a “massive success in terms of customer engagement”, noting that the operator has a high rate of return visitors. “Visitors come back, and that’s why we know we are onto something very successful,” he added.

Vodafone Business has also helped more than 230,000 SMEs through online training courses and mentoring. The telco held a global virtual SME event in May 2021 that attracted 15,000 attendees. Vodafone Business brought in 40 experts and the content was streamed worldwide in four languages. Post-event, the content has reached 1.3 million people.

The operator has produced a global content library and the local operators adopt the content relevant to their markets, which is translated into local languages. Similarly, V-Hub offers a global technology platform so that operators in each market can adopt the digital advice service quickly, with little effort and investment on local development or delivery. This “out of the box” SaaS approach makes the advice service scalable, while still allowing for the locality of content and advisor support.

“It’s the enrichment of the two pieces that makes this powerful… It’s how we make the best of both worlds, and we’ve been very effective in doing that,” he said.

But the SME market is diverse, comprising companies of various sizes and spanning different sectors. How can a unified proposition approach meet all SME needs?

Henriques said one of the first things he evaluated when working on the business strategy was to determine if SMEs have different needs in each market, and the answer he found was no, the needs are the same.

“They all want to go online, they all need cybersecurity, or a fleet management solution. You would be surprised by the level of commonality there is across markets. There are small [differences] here and there. But [we realized] our strategy could become a lot more global than localized,” he explained.

However, it is also important to have good market segmentation and a solution portfolio with “the right building blocks.” Segmenting the market enables an operator to target services that are appropriate for different SMEs. “If you have the right building blocks, you can combine them and tailor them to different segments … depending on what the customer needs,” he said.

Vodafone ups its own digital game

The operator’s push into the SME segment is helped by some digital transformation of its own. The Business Marketplace is an example of “massive automation” because it allows Vodafone to launch a product once onto the platform and it becomes available across multiple markets, rather than integrating and launching in 21 markets, Henriques said. Similarly, the V-Hub operating model offers a centralized content factory where material is added once and automatically made available to the local markets.

Vodafone Business also revamped its self-service portals and e-commerce systems to allow SMEs to buy products and services digitally. Henriques said there has been “big progress” in this area and it has been implemented consistently across markets, resulting in “significant shares of digital customer acquisition and service.”

Another enabling factor for Vodafone Business is TM Forum’s Open Digital Architecture and Open APIs. For example, the APIs between the Marketplace and local markets are compliant with TM Forum standards. The operator is also looking to use the Forum’s APIs to “connect the marketplace into the commerce channel.” Another example is the operator’s app that has an abstraction layer and uses TMF-compliant APIs.

“For everything that goes into the digital space, we try to be TMF-compliant in terms of execution,” he said.