My Top 5: Lessons from Tesco to Vodafone

1. Customer Segmentation
Telco 2.0 have discussed this and as I read the article I thought Tesco has a lot of other things in its’ locker which could be used an example for Vodafone. Here are my personal thoughts on #2 to #6

2. Coverage & Availability
Tesco is forever working on improving its’ coverage, whether it is buying convenience stores and hoarding sites with planning permission. Tesco is also quite innovative, for instance investing in the Internet Based Home Delivery with a different business model when all around them were retreating. Even today, Tesco are in the news for lobbying to increase the Sunday Trading Hours.

I’m sure Vodafone have loads of road testing going on and they are continually improving the network, but the problem is that you never hear of them. Verizon Wireless, the US Joint Venture, is forever harping on about their coverage and the attempts to improve it - VZW have turned this into a real competitive advantage. This is not just a competitive advantage in Voice, they also promote their 3G Data Cards mocking the coverage and usability of WiFi Hotspots. I believe Vodafone could do a lot more in terms of improving coverage, especially indoor 3G and also should be promoting this as a competitive advantage.

3. Think Local
The products that Tesco sell in a UK, Polish and Thai Store are radically different. It doesn’t matter to Tesco what you want to spent your money on – they will have a product to fulfil your desires. Vodafone famously made a complete mess in Japan by trying to force a global view on product & services. They claim to putting this right. I feel that this aspect of being a multinational is the most difficult to great right, but if Vodafone doesn’t get it right they might as well break themselves up because they will never outperform the competition. I believe they need to sell themselves as the Communications Expert - form, content and mode of delivery will vary from country to country, but Vodafone will have deploy the right solution from its' toolbox.

4. New Ventures
Tesco is never frightened to move into new areas to gain a larger slice of their customers spending. We saw it start in the UK with expansion into non-food and now they are moving into the service area with banking and telco offerings with JVs. You hear any critism of them having partners to deliver these services.

O2 have successfully diversified into Emergency Services communications which is proving to a nice earner and BT is doing the same partnering with local councils building metropolitan wireless networks. I feel Vodafone UK is missing the boat here. It should be looking at perhaps leveraging its’ payment skills similar to DoCoMo launching credit / debit cards or even just something simple by extending the reach of the prepay cards to cover other products / services. There are lots of lots of opportunities some not costing a lot more money but all aimed at imcreasing traffic on the network.

5. Every little Helps
I love Tesco’s tagline and the fact that its’ been rammed home into most people’s mindset. To me, it creates a image of company continually improving itself: working for the customers by bring down prices and most importantly, continually working for its’ shareholders by continually improving market share, moving into new product areas and new geographic areas.

Vodafone would love a message like that which is believed to both customers and shareholders.

6. Stick to your Guns
Another thing that the Vodafone board should draw heart from is that despite being one of the UKs great business success stories, Tesco is probably loved and hated in equal measure. Tesco actually understand that people continually throw stones at the Goliaths of this world, but it doesn’t make them change direction or strategy. They just plough on and prove people wrong. However, Vodafone recently seem to vacillate with whatever the direction the wind is blowing on a particular day. They end up pleasing no-one and appearing to have no strategy. This may be a particulary harsh view, but all I hope is that Sir John Bond can turn this around before another great British company is ruined.