If Your Telecom Brand Is Broken, Don't Fix It?
An interesting study from TNS Telecoms looked at how important brand was for consumers considering purchasing telecom services as part of a triple-play. The interesting study revealed only slight preferences by consumers for one brand over another, but then TNS lost me… TNS concluded that since consumers don’t care about brand, providers should “focus less on brand” and compete on service and pricing. I couldn’t disagree more. For better of for worse, consumers repeatedly prove in countless markets that they will pay a premium for a trusted brand. TNS is advising providers to lower prices and squeeze their margins, instead of the better idea of investing in building up their brand, which would provide long-term ROI. I know of what I speak: In 1996, I worked for a baby-bell. AT&T had just entered our market for local phone service, a market in which we had been a monopoly. Three years prior, we had amalgamated a few regional Bells, and re-launched under a new name, which we printed on the bills of every customer, on phone booths, etc. AT&T, of course, had years of brand-building and marketing for Long Distance business. We lost many local customers to AT&T, so we organized a program to survey customers and ask them why they left. When we asked, “Why did you leave my employer for AT&T?” They replied, “Leave who for AT&T?” They didn’t even recognize our brand, and that’s why they left for AT&T. An intensive brand-building effort ended up greatly reducing our churn. So, the TNS research data is interesting, but their tactical advise is poor.
