Column: An insider’s look at telco’s ‘Fair’ campaign
September 04, 2013 | Will Novosedlik | Comments
I’ve always had some difficulty with the saying “perception is reality.” It suggests that the way things appear is the way they really are. It devalues evidence-based truths and elevates subjectivity above objectivity (if the latter can be said to exist in the post-postmodern era). It undermines the authority we assign to empiricism, the basis for science and law.
But the laws in the world of branding are different. In this world, your customer’s perception is your reality. The world of branding and marketing is therefore all about perception management and that’s the problem facing the Big Three Canadian wireless operators today. And each one of them is in complete denial about it. Their response to the recent threat of wireless giant Verizon’s entry into the Canadian market has made this abundantly clear.
When it came to light that the Canadian government was opening its arms to the American mobile behemoth, investors punished the Big Three swiftly and deeply, wiping billions from their collective market value. The short-term threat may have passed as Verizon has now indicated it is not interested in the Canadian market at this point. But if not now, maybe later. And if not Verizon, it could and should be someone else.
A big takeaway was that the reaction of Canada’s major telcos predictably missed the point. In lockstep, all three went into defense mode by lecturing Canadians on how unfair the whole thing was. Acting like the victims of political chicanery, they pleaded for sympathy, waving the flag against the threat of foreign attack.
The big complaint is that it is not a level playing field. On some points, that is correct. Verizon has annual revenues of $115 billion. The Big Three combined have annual wireless revenues of $20 billion. So when it comes to the capital investment required to purchase spectrum, the Big Three are right to cower in fear, especially when in the upcoming auction, two of the four blocks of spectrum on offer will be out of bounds to them. That part of the playing field is indeed uneven.
But despite their efforts to win over the consumer, it was pretty obvious there is little sympathy for the Big Three.
Canadian wireless customers are among the most dissatisfied in the world. Survey after online survey shows that the majority of Canadians support Verizon’s entry. Yet, instead of reaching out to customers, the Big Three chose a devil-you-know approach, lecturing us on the dire consequences, hectoring us with threats of job and privacy loss and increased surveillance. Way to win our hearts.
The Big Three have always been more intensely focused on each other than on their customers. And they are much better at talking than listening. The fact that you tend to hear George Cope, Darren Entwistle or Nadir Mohamed speak directly to the customer only when they have a beef says plenty. They’re like that schoolyard bully who busts your chops day after day, but cries when another bully kicks sand in his face.
So what should they do? Let’s say Verizon — or someone else now — gets in. At any given time in this market, 15% of the customer base is in churn. A certain percentage of those customers will go to the shiny new guy. (As an example, half the new customers at Wind Mobile in its first year were from Rogers.) To stem defection, the incumbents will need to shift their focus from customer acquisition to customer retention. But will they?
Investing broadly or significantly in customer experience would require a major cultural change. If the past is any guide, they will likely appeal to customers through advertising, offers and promotions, and ad hoc deals with any who threaten to leave. It will be good times for their marketing services firms and boom times for their lawyers.
Will it be good for customers? As a way of showing discontent in the short term, yes. And it’s already forcing incumbents to drop their prices a wee bit. But Verizon or another foreign player is not likely to enter the market at much of a discount, if any, so a price war is unlikely.
In the long run, customers may not be that much further ahead. Which is sad. The right way to do this is to throw the door open to all foreign competitors. Then there would be real competition and players would be forced to consider the value of the customer. Until then, our perception will never be their reality.
Will Novosedlik is head of brand experience at Idea Couture and a past vice-president of brand and communications at Wind Mobile.
PR Filter weighed in on this topic yesterday. See what senior public relations executives had to say about “Fair For Canadians.”