My regular readers will remember that in the first article of my three-part mini-series on Telus (TSX:T), I explained why its positioning as a social capital company is a strategic masterstroke.
In the second article, I talked about the secret “growth” weapon Telus has in the form of its international division.
In this final article of the Telus mini-series, I will talk about how Telus is focused on creating an emotional connection with Canadian consumers, which should ensure that it remains an industry leader for decades to come.
Telus is attracting the right crowd
Telus realizes better than most companies that it needs to make an emotional connection with its existing and potential customers to ensure that a mobile device or a wireless plan isn’t just seen as a commodity. Customers in today’s highly competitive environment need a bigger purpose and a better reason to stay with a company, especially when there are so many choices available at our fingertips.
This is where Telus truly shines. For example, the company is leading the charge when it comes to empowering Canadians to stay safe in an ever-evolving digital world through its Telus Wise program. In essence, Telus Wise offers interactive and informative workshops and resources to help empower Canadians of all ages to have a positive experience online.
Parents of teenagers understand this topic really well, especially given all the negative social media influences in the world right now. Telus has aligned itself side by side, shoulder to shoulder with concerned parents. When these parents think about their mobile devices and plans, where do you think they are headed? I’ll tell you – straight to the Telus store because they feel that Telus is aligned with the things that matter to them in their lives.
This alignment translates into loyal, sticky customers and sticky customers tend to have the highest average revenue per user (ARPU) rates. Telus’ wireless ARPU is industry-leading at $60, higher than many of its competitors. This ARPU has a very direct correlation to cash flow and ensures that acquiring new customers is a profitable endeavor for the company.
Enabling other sectors to be successful
Telus realizes that not only can it be a successful company but it can also help other Canadian companies and industries succeed. Shared success is super-charged because as other Canadian industries grow, Canada as a whole becomes more prosperous, leading to an ever-greater number of Telus customers that can afford to pay more for better service. Telus has cracked the code on this “digital circle of virtue.”
An important example of Telus’ involvement with other industries is its initiatives in the agriculture technology space. Many Canadians don’t realize that Canada is poised to be a top food producer in the world – according to the Canada Food Brand Project initiative, Canada will be a top-five global supplier of safe, sustainable, high-quality agri-food products for the global consumer by 2025.
By leveraging technology and artificial intelligence, Telus is helping Canadian farmers and ranchers produce food for the world’s ever-expanding population more efficiently, safely, and in an environmentally friendly manner. In addition, Telus is at the forefront of “food traceability” to ensure consumers can actually trust that a cut of beef tenderloin actually came from the environmentally friendly ranch in Alberta that the packaging says it did.
It is very hard today for me to go to a grocery store and verify precisely where the product is coming from. If it says it is coming from Mexico or Guatemala, I have no further information on who is producing it and whether it is produced in an environmentally friendly way. I just have to trust that all the right things are happening in the supply chain, but we know often that is not the case.
Telus’ initiative in agricultural technology aims to change that for agricultural products being farmed in Canada.
The final verdict
The wireless wars are not over and Telus, Rogers, and Bell will continue to duke it out for supremacy. The good news is that as Canada’s population grows and 5G advances are made, this will translate into greater ARPU for each of these cash flow giants.
Telus is trading hands at $47, which is a great price level for long-term investors to start nibbling at the stock and accumulating a position to benefit from Telus’ position at the centre of the lives of consumers and other Canadian industries.
