RSS

Why Claro Failed to Beat Digicel

14 Mar

So by now everyone should have gotten the news that Claro has sold their Jamaican division to Digicel Jamaica. I do not know the real reason why Carlos Slim decided to sell, since I wasn’t in presence of the negotiations as it happened. Furthermore, I do not know why he decided to enter the Jamaican market in the first place. Some say it was to prove a point as Digicel Group had entered their territory after an informal agreement not to, so they simply decided to return the favour by coming to Jamaica…or so it said at least.

However, I’m not here to discuss why Carlos Slim decided to establish Claro in Jamaica or why he sold, I’m here to discuss why Claro failed to beat Digicel. To be honest I can’t say that I’m surprised at this action.  I have been observing Claro from the very beginning when they entered the Jamaican market, and they were doing things wrong from the very beginning in so many areas. They entered the market under the impression that Digicel’s success was merely due to great marketing, and therefore if they could enter the Jamaican market and ‘outmarket’ Digicel then they could take Digicel’s dominance in the marketplace. Sure Claro can easily outmarket Digicel in terms of  dollars and cents, I mean it is owned by the richest man in the world. Therefore, this not only means more money-spend on better marketing, I reiterate: in terms of dollars and cents, but also a lot could be spent on R&D for the latest technology that Digicel may not have access to, and also they could offer lower rates than Digicel could, I mean they could afford it.  So the plan was simple, outspend DIgicel. Sounds like a fairly reasonable and logical plan, more money for marketing and better tech, and lower rates. Business over the years has taught us that if you offer a better product at a lower price then you’re sure to beat the competition. Except they left out the fundamental, core, at the heart reason why Digicel was successful in Jamaica in the first place…the people.

Let’s not take into consideration the other guys that had a monopoly once upon time who digged their own grave in the past, making it all too easy for competition to set in and take over the market. Let’s ignore the fact people wanted a change, and like Obama Digicel brought that change…let’s ignore that fact. That only made it easier for Digicel to successfully penetrate the market, but it is its connection to the people that made them successful, more importantly the young people. The young people who are pretty much the ones who spend the most on the latest tech in the first place.

Digicel came to Jamaica during a time when it was next to impossible for young adults, especially those just leaving university, to get a job. There was always the painstaking fact that no one wanted to hire employees with no prior experience (but then you ask how are they suppose to get experience if they have no job to begin with? But that’s something for another time). Digicel took in all those unemployed university graduates and said “Hey come work for us, we can relate to what you’re going through.” Not only that, Digicel pretty much made it look cool to work for somebody else back in the day, everybody wanted to work at Digicel. It was overrun with university graduates which added an element of fun and hipness to the work scene. So then the virality effect took over, a friend told another friend who told another friend and soon enough Digicel was the had more than their share of university graduates working for them. Digicel was where it was at. Digicel went a bit further to offer exceptional customer service, something that was/is pretty much non-existent in most Jamaican businesses. So through that mere act they were able to differentiate from every other Jamaican business. Then guess what, not only were the staff talking but now the customers were talking, and Digicel’s snowball effect grew even more instantly propelling them to dominant market share and to being the Bigger Better Network (I’ve been waiting for the chance to put that in).

Digicel made a connection with the Jamaican people, and I think that is what Claro missed out on and failed to realize. They tried to buy out the people instead of making an emotional connection with them. Instead of first trying to build their brand into something that everyone wanted to be associated with, which is what Digicel did. They tried the traditional, bully tactics thinking it would work and it failed. Why did it fail? Because today the power is with the people not the brand. The people decide who they want as their representative, not the other way around. I only hope Digicel recognizes this and does not become too complacent and comfortable in their possession of success to realize they need to maintain that connection if they want to continue having the success they currently are.

This only proves in today’s marketplace, Jamaican or otherwise, it is not about who has the bigger budget but who can make the greater connection. Digicel made that, established it, and put their stamp of approval on it, the Marketing simply helped to reinforce their brand and remind the people why they chose Digicel in the first place.

Take a page all you other competitors out there, Digicel is here to stay.

The Ranter.

Advertisements
 
 

Tags: , , , , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

 
%d bloggers like this: