When the incentives are broken, the results will eventually face the same fate. Eagerness to close sales at the expense of customer quali...
Over the last three years, Vodafone Hutchison Australia has experienced what every marketer dreads: Consumer backlash on a grand, public scale.
Faced with losses of 700,000 customers in 2011 and 2012, years of pessimism in the market place and widespread social criticism – not to mention the wavering threat of a lawsuit from disgruntled former contract holders – the brand has been beaten, battered and bruised. But with adversity comes the opportunity to learn, and for Vodafone’s recently installed senior executive team, the basis for its efforts to regain consumer trust.
Vodafone’s director of consumer business, Kim Clarke, is at the coalface of the telco’s efforts to shore up customer attrition and improve its brand image with the Australian public. She admits the business lost its focus as it battled poor network product and services and an inconsistent customer approach. Vodafone Hutchison Australia is a 50:50 joint venture formed between Vodafone and Hutchison in June 2009.
Clarke was appointed to her post last October by then new CEO Bill Morrow, and is part of a transformation team tasked with changing the business’ course. She endeavours to meet this challenge through a blend of product improvements, internal realignment, stronger customer engagement, consistency in communication, and brand smarts.
“From a business transformation perspective, the root of our problem is we lost focus in terms of the customer,” Clarke told CMO. “We had been navel gazing instead of being focused on what was happening externally.”
Clarke highlighted two core issues Vodafone is striving to overcome as part of its brand transformation. The first is network connectivity and the need to improve reliability across products and services, something Vodafone is now addressing with a $1bn injection into network upgrades over a two-year period.
The other is improving customers' experience by ensuring consistent and relevant engagement at all times, cross-channel. Vodafone has commenced on this journey with a comprehensive review of customer touchpoints as well as technology investment.
Clarke’s interest in the network is unsurprising given her professional background. She started her career as an engineer at Telstra before switching to product marketing, then rising up the ranks at Vodafone until she was managing global business from the UK. Following roles with start-up services business Mobile Mentor, and software developer White Rabbit, she joined Salesforce.com as vice-president of marketing for Asia-Pacific, where she met Morrow.
“Bill’s remit for me here is to firstly help out the network team because customers should be informing where we’re prioritising our investments,” she said. “The other focus is around engagement. This includes having our hearts and minds around the brand internally, and making sure our people have the information and confidence to engage in appropriate conversations with the customer.”
Repairing the brand
With any brand transformation challenge, it is important to start with the root cause of the problem. At the same time, Clarke has strived to identify Vodafone’s strengths and elevate those to the top of its re-engagement strategy. These form the basis for a comprehensive change program.
“For me, this brand will be transformed one conversation at a time,” she continued. “I use the analogy ‘you build brands from the outside in’, but you transform brands from the inside out. The transformation comes from your people, your existing customers, and then your new customers.
“The narrative out there has been one of pessimism, and we get a reasonable amount of bashing, which the team cops too. I have to make sure our employees have the truths that enable them to work through that and start having positive conversations about what is going on.
“It’s not about one big campaign… that is just the punctuation.”
An example of how things are being realigned internally is the re-engineering of distribution channels so that third-party owned, Vodafone branded retail stores have a direct relationship with the corporate team. These 17,000 points of presence were previously managed by a middleman. “We are managing that communication chain more closely so it’s consistent,” Clarke said.
Making sure the narrative and voice of the brand is clear is also critical, whether it’s through the call centre, the website portal or social media. “If I’m having a conversation with you about re-signing to Vodafone, and the next thing I do is talk about an outage, it’s inconsistent,” Clarke said.
Social media is crucial as the channel of choice for many of Vodafone’s customers. The business now has 35 agents in Hobart dedicated to managing its social environment using the Radian 6 platform.
“One of the things we found while going through this crisis was that we weren’t managing engagement effectively and how it manifests most is through social,” Clarke explained. “Social has now emerged as one of our strengths. It doesn’t mean every conversation is a positive one – it’s not about that.
“For me, social is about engagement. It doesn’t mean we don’t use it for care – we’ll go to where our customers are and if someone hashtags us, we’ll follow them and make sure we’re seeing to it. But if people are having issues, social is about us being there, engaging with them.
“You’ve got to go where your customers are. It doesn’t mean the other channels aren’t really important – care or digital for example. But with social it’s real-time – I have five seconds where I want to engage with you. It’s particularly important when you’re trying to move the brand from one point to the next.”
Crafting a message around Vodafone’s improvements is vital too, and the obvious starting point has been improvements in the service experience. The company has launched a series of above-the-line campaigns offering network guarantees and taking accountability for its service levels, all aimed at customer retention.
“Making sure customers are assured about that service level is the objective. It’s not the reason to choose us – our aim is to be the best and fairest with worry-free services – but it helps to establish ground-level capability,” Clarke said.
“In our social channels over the last three months I’ve been watching our customers weigh in on that and it is refreshing and invigorating. This is what I mean by changing the brand one conversation at a time.”
As with any marketer today, data and metrics are shaping the way Vodafone transitions its customer relationships and Clarke highlighted net promoter scores (NPS) around brand rejection and advocacy as key ways she is gauging her customer retention strategy. From NPS highs of +18 in June 2010, the brand plummeted to -27 against an industry average of zero but is now working its way back up.
“Our brand characterisation at the time was affordability, accessibility and fun. When you are seen to be fighting in the customer’s corner, and you let them down, it’s a long way to fall,” Clarke commented.
Vodafone is not out of the woods yet, losing 108,000 customers in the first quarter of this year. In a bid to arrest the slide, Vodafone has invested in more analytics resources, and now has 25 per cent of the marketing team dedicated to experiences which drive NPS, and learning what detracts from a good customer experience. These are leading to better financial outcomes for the business, Clarke said.
Customers that have signed up Vodafone since July 2012 have given the business an NPS score of +4. “It’s nowhere near where we need to be and I won’t rest on that, but I’m so proud of the team in delivering that type of result,” she added. “The fact is that if you’ve joined us in that time, the experience is fundamentally different and you’d actually promote us to your friends and family.”
Clarke stressed her long-term commitment to building a better experience for customers. One recent initiative is ‘audience basics’, which focuses on ensuring the start-up journey for new customers is consistent. Vodafone’s plans to rollout 4G services nationally from June this year also opens up a new dialogue and will be backed by local marketing efforts, she said.
Overall, Vodafone’s mantra is to earn back trust. “You can’t earn that back if you don’t acknowledge the relationship you currently have,” Clarke said. “We have to acknowledge what has been, then invite customers in to what it is like today.”
Changing role of the CMO
As Vodafone’s CMO, Clarke enjoys the support of her CEO and holds a strong position on the executive team, but she noted the different ways organisations look at the marketing role today.
“The way Vodafone see this position suits me in terms of my career because it’s a broader business remit,” she said. “Brand and marketing/communication are just one part – there’s also product, as well as P&L. Making sure you have products that are measured upon customer experience is something I’m incredibly passionate about at a personal level.”
Key attributes she claims modern marketing chiefs need today include resilience, optimism, a balance of art and science, and a healthy respect for what’s driving customer experience. “You also must have commercial nous,” she continued. “If you can’t talk turkey across the executive table, no one is going to take any notice of you.”
Another marketing game changer has been in relation to technology, Clarke said. “Being able to grasp big data en masse, how to process that information, dealing with systems and processes, then injecting that back into your performance is a different style of thinking,” she said.
“If you can’t tap into the role of your brand, and bring it to life with messaging and visual assets that stretch through every part of how it is presented, you should never be a CMO. But that’s table stakes almost.
“The world is moving on and you also need to know what your customers are experiencing. You need to be able to take that information – whether that’s being channelled via digital, social or mobile – and plug that into your thinking, how you communicate, as well as use it to inform the products and services you deliver.”