Lumen Technologies reported their growth in Q4 2021 was weak, and their projections for 2022 don’t look like things will improve. This concern raises an interesting and important question. Why is Lumen having trouble with growth in an industry that is transforming and growing so rapidly?

First, we must understand the company. It started out as CenturyLink before splitting into three companies.

·      Lumen focuses on large business, enterprise and government customers.

·      CenturyLink focuses on small business and residential customers.

·      The third company is called Quantum Fiber.

Lumen is a business services company and provides a fiber network, cloud and edge cloud, security and assorted communications.

This is forward thinking and should create growth opportunities for the company.

Lumen must focus on building strong brand relationship

In fact, we are seeing larger competitors like AT&T, Verizon and others all focusing more on the business market for these very reasons.

The marketplace is changing. Going forward, growth is in these new services.

So, if Lumen is focusing on the right areas, why are they struggling to find growth opportunities?

Simply put, they have not focused on building their brand relationship with their customers and the investors.

This does not happen automatically, yet this is vital to success.

Lumen has not focused on creating a compelling branding story. They don’t give the customers the chance to know them… to understand them… to connect with them.

You see, so much of success today can be tied to the way a company relates to the customer on a brand level. That means on an emotional level.

This is critical for Lumen Technologies, CenturyLink and so many other companies as well.

Apple brand connected with users, investors on emotional level

Let me give you an example.

Apple does a great job of building their brand relationship with the customer, worker and investor. They are an emotional company. Especially, under Steve Jobs, but it still is under Tim Cook to a lesser degree.

The larger and more successful a company gets the harder this is to achieve. However, it is still so important.

Years ago, Apple was the smaller and young fighter. They were the smaller competitor to Microsoft and other competitors.

Apple users loved them. They didn’t just like them. They didn’t just prefer them. They loved Apple.

Users and investors loved the fighting spirit. The same spirit Microsoft showed years earlier when they were starting their growth curve.

That’s what let Apple grow into such a successful powerhouse. They connected with the customer on an emotional level, and they grew rapidly.

Lumen and CenturyLink are not emotional. They are static in the minds of the customer. That is a lost opportunity.

That means every step forward is a hard job for the company without their customers, workers and investors standing behind them.

Lumen should use marketing, advertising and PR to build brand

So, how does a company get the customer and investor and the entire marketplace to love them?

This is done in a variety of ways including marketing, advertising, public relations and more. Lumen must be successful with media relations, analyst relations, investor relations and more.

As I have followed this company over the years, I believe this is one key area they are missing the mark. And that is one important reason they are still struggling to show real and rapid growth.

Lumen seems to have all the pieces of the puzzle, except brand and growth.

Lumen, CenturyLink, AT&T, Verizon all wrestle with brand and growth

Part of the problem Lumen and CenturyLink face is also faced by every competitor industrywide. AT&T and Verizon also deal with this same set of problems surrounding growth and brand building.

That’s why AT&T, Verizon and T-Mobile tried to expand over the last decade into areas like pay TV, entertainment and the like.

AT&T went deepest into this new area by acquiring DirecTV and WarnerMedia assets like CNN and Warner Brothers.

Verizon went into this area as well with FiOS and acquisitions of AOL and Yahoo.

Even T-Mobile tried with their wireless pay TV offerings.

All these companies failed at this new area and are rushing to get back to business as usual with wireless, telecom, Internet and more for the business and consumer marketplace.

Lumen, CenturyLink must create next growth engine like wireless

You see, to make shareholders happy, every company must continue to grow. They must create the next growth engine to ride for the next several years.

This is what Comcast did by getting into wireless with Xfinity Mobile. The same for Charter with Spectrum Mobile and Altice Mobile.

They failed with their first version a decade ago. But they relaunched and that has been successful for them.

This gave these companies a new avenue for growth. This created another growth engine for them.

It also created another let on the stool to make sure they can hang onto their traditional Internet, streaming services, cable TV and pay TV customers.

Comcast Xfinity, Charter Spectrum, Altice move forward into wireless

So, why is it that some companies are more successful moving into new areas while other companies struggle?

It comes down to the brand relationship they have with the marketplace.

This is the path that must be taken in order to show continued growth going forward.

The most successful companies are always coming up with new ideas and throwing them against the wall. Some ideas drop off. The ideas that stick, are built and are what the company focuses on.

That’s why Lumen needs to start throwing new ideas for new business growth engines against the wall. Whatever falls away they can ignore, but whatever sticks they can build on.

That’s how successful growth companies see the world. And that is how Lumen and CenturyLink need to see the world as well if they want to be a growth-oriented player going forward.

A company is either moving forward or backward.

To move forward, they must expand and grow. They must be like a caterpillar turning into a butterfly. If not, they will not grow. And if they do not grow, they will struggle with decline going forward.

I like Lumen and Century Link executive management. However, I don’t know if they have thought about what I am recommending. I hope so. I hope they can think in this brand-building way.

If not, they must bring someone in who is wired to think this way. In my opinion, this is the way they can once again start their growth engines and become a successful and growing player moving forward.

The post Kagan: Why Lumen Technologies is still struggling to find growth appeared first on RCR Wireless News.

Categories Analyst Angle