Reliance Jio and fake loyalty in telecom brands
The launch of Reliance Jio has created a flutter in the telecom market in India. While competition is bound to react with price cuts and counter strategies, what is happening in the minds of end consumers is interesting. There are many who are tempted to switch from their current telecom brand, at least going by the reactions on social media. Personally speaking, I too am tempted. My first exposure to the Reliance Jio brand was when I got to ‘test’ it’s free wifi few months ago and was blown away by the speed. The preview offer prior to the official launch has also piqued interest among many, including me, about the Jio brand. What are the various factors at play? Herewith some unsolicited thoughts:
Forced brand loyalty
I am using an Airtel number (which was registered as corporate number) for about 5 years. I was labeled a Platinum customer during this period and even had a dedicated ‘relationship manager’ for a while. Couple of weeks ago, I transferred the same number from corporate to personal against my name. The CRM and ‘loyalty’ system then recognized me as a new customer and demoted me from platinum to whatever the lowest rung was. It tells a story about how brands ‘know’ so little about their consumers — that too in a category where a wealth of consumer data is available. But the hallmark of this relationship is the feeling of being helpless, driven largely by the poor product experience. The barriers to switch are so high that one puts up with bad experience. I guess every telecom brand’s user in India feels let down by the product experience of their own brand, driven largely by lower than promised speed, poor network coverage, call drops and such like. Yet, switching brands has never been easy, number portability notwithstanding.
I guess most consumers feel that switching from one operator to another will not make much of a difference as they expect the other brand to be no better in terms of product experience. What’s more, the expected hassle of changing the primary number or even porting the same number to another operator (the paper work, wait etc.) is too much of a barrier to switch brands. In other words, it is not brand loyalty borne out of true affinity towards the brand but more out of being helplessly tied to it.
Virtually all brands in the telecom space have exploited this situation. No other category has such a wide gap between promise in advertising (blazing speeds, coverage everywhere) and delivery on the ground. Knowing full well that the consumer isn’t going to switch easily allows them to offer sub-optimal experience at every touch point — be it the web interface or the brand app.
Reliance Jio: barriers & expectations
In this context comes a brand which has demonstrated far better speeds (albeit in test, low user base situation) than current brands and is willing to lure consumers with low price tags, thanks to deep pockets. This may seem like paradox, but the general cynicism towards brand delivery in this space will mean that Jio will be ‘under a microscope’ much more than other brands in the category. The brand also comes with its own set of baggage — the current avatar (albeit from another group but with the same brand name) doesn’t enjoy great equity, reputation or consumer base.
The group’s consumer facing businesses (retail and textiles thus far) have had limited success. The monetisation is expected to be in content as this article outlines. If the brand gets that aspect right, it may prove to be a better bet for real consumer loyalty than the forced one the industry has experienced thus far.