Mobile phone firms strive to counter fall in customer spend

MEDIA & MARKETING:'Back to basics' marketing is the order of the day for providers in a tougher environment, writes SIOBHÁN O'CONNELL

DECLINING MOBILE phone spend combined with a saturated market is creating challenges for the marketing departments in Vodafone, O2, Meteor and 3 as they strive to come up with ways of retaining existing customers and winning new ones.

According to telecoms watchdog Comreg, the average monthly spend by mobile phone users is now €41 compared with €46 a year ago. So the mobile phone companies need more customers if they are to maintain or grow their turnover.

While Vodafone (+6 per cent) and 3 (+9 per cent) increased their ad spends in the January to May 2009 period, Nielsen Media Research notes that O2 reduced its advertising spend by 5 per cent while Meteor halved its spend.

Vodafone is still the biggest mobile operator in the country with 2.13 million customers. But while Vodafone lost 45,000 customers in the three months to the end of June, O2 gained 6,000 customers when compared with the first quarter of this year to bring its total customer base to 1.72 million.

O2 is now the number one player in the bill-pay sector. Its growth in this market – a 12 per cent increase to 663,000 customers – is significant and means that the company has overtaken Vodafone in this segment for the first time.

The switch in focus for all mobile operators from pre-pay to bill-pay customers has been the big change in 2009, according to O2’s marketing director Damien Devaney. He added that the changed environment means a return to “back to basics” marketing.

Devaney explained: “It’s about understanding your customer better than the competition and meeting their needs. You also have to offer them control and flexibility and know what their passions are so you can select the right sponsorships. If you don’t do that you will lose them. If you do, you will keep them.”

O2 has responded to the recession with Spend Alert, a facility which allows bill-pay customers to identify what their spend is each month. Meanwhile, it has pulled the plug on golf sponsorships as it focuses more on its association with the Irish rugby team and the O2 music venue in Dublin.

As a challenger brand in a slowing market, Meteor’s marketing director Conor Carmody has high hopes for its sponsorship of a new series The Apprentice on TV3 in the autumn. To leverage its association, Meteor plans to offer its customers exclusive behind-the-scenes footage and encourage participation via competitions.

While Meteor’s primary marketing focus for the first half of 2009 has centred on the launch of its broadband network, the company recently launched a new product called Bill Pay Lite. Customers don’t have to sign a 12-month contract but they get the benefits of a bill-pay tariff. Press ads will run through August promoting the offering.

For 3 Mobile, with a 7 per cent share of the market, its challenge is to try to acquire customers. 3 recently moved its €10 million advertising account to McCann Erickson, and the agency’s brief is to lift 3’s market share to 15 per cent, according to sales and marketing director Elaine Carey.

She sees an opportunity in the recession for 3 because people are now reviewing their phone bills and shopping around. Carey points to another benefit of the recession being the increased value now available to advertisers on TV and national press.

“TV is one of the most effective ways to communicate to your customer but it wasn’t the most cost-effective medium. Now with TV becoming cheaper, we can go back on TV,” she said. Product differentiation is also crucial for this challenger brand. “We have to bring new propositions to the market,” said Carey. “One of our major initiatives this year has been the Best of Both offering, which is unique in the marketplace.”

Carolan Lennon, marketing director with Vodafone, said that the market leader has reacted to the changing market by making more effort to engage with its existing customers and introducing value offerings.

That means making more outbound calls in 2009 than in previous years to talk to its customers about the different tariffs and payment options, and staying in touch with them by e-mail instead of direct mail.

Cosying up to customers includes initiatives such as Vodafone Enjoy, a campaign which invites customers to register online to receive offers by text message or e-mail. This month’s offer is two main courses in Milano’s restaurant for the price of one and an entry pass to a greyhound track.

Also new is www.missionred.ie.

“Our research told us customers want dialogue and a say in what we are doing,” says Lennon. “We have created www.missionred.ie, where we give them five options to vote on and we promise to implement the idea that gets the most votes.

“The site has only been going a week and we have already had 100,000 page views. Doing the same old things and doing them louder just isn’t going to work anymore.”