Telecom’s burden is marketing: Spark

What does Telecom do?

For me it’s simple – as a telco (leaving aside Gen-i) it provides reliable internet and voice connectivity. That connectivity is accessed over the air and via copper and fibre, and there is a strong switch towards demand for pure data access, rather than voice, txt or other services.

When Telecom wins it delivers simplicity, and three recent changes were great to see. The first was the removal of cripplingly expensive data roaming costs so that we don’t have to do the SIM dance when travelling across the pond and to other frequent destinations. The second was the rollout of the iOS (and Android I suspect) application for mobile customers, an application that allows easy addition of data packs for relatively reasonable costs. It’s not perfect – I’ve heard about delays and the incessant texts are annoying – but it’s worlds away from the past. The third is a new system for in-store staff, which makes their work, and ability to deliver great customer service, lot simpler than before, though I suspect there is plenty more to do.

So the proposed name change to Spark is disturbing, and for three reasons.

The first is that the old name is strong, while the new one is appalling. We are incredibly dependant upon our telecommunication providers and demand similar levels of dependability and reliability from them as we do banks. “Telecom” is a name rich in history, not all of it bad, and can be relied upon as a NZ institution to deliver a good service. “Spark” is a small thing that is liable to disappear very quickly.

The second is that this rebranding is a distraction. Telecom’s transformation, like Air New Zealand’s before it, is a long, slow gradual process. It means a return to simplicity of offerings, delivering outstanding customer interactions, and relentless focus on delivering  fast unrestricted data pipes over a variety of mediums. This is happening, but changing the name has nothing to do with these activities, and will cause staff and customers to wonder what the heck is going on. I’d much prefer that the focus remains on the changes, and allow our increasingly positive interactions with Telecom improve their brand equity.

Thirdly this feels like an expensive capture by marketing folks, internally and externally. Telecom has long had an issue with the strange belief that they are a marketing company rather than a product or services company. This has meant wildly expensive spending on television and other advertisements, constant rebranding of the company and products (XT as an example) and a vast and complex series of products that makes doing business incredibly difficult. At issue is not just the cost, but the energy of staff and senior management that goes into “marketing” rather than into delivering great products and services.

Overall
The change happens on April 1, so there is a chance it’s all a joke. Please [Sorry Lance, it's actually an un-specified time around mid-year - Editor]

For me the rebranding is a critically poor decision, a distraction and a reason to question what is happening at the board and senior executive level.

Perhaps it’s happening because the marketing department has little ability to create impact at the product level, and they need something to do. A lot of the delivery of Telecom’s products is outsourced (e.g. to Alcatel Lucent), but external marketing websites, TV and billboard advertisements and rebrandings are relatively easy for the marketing team to do. This means vast budgets and numbers of people internally and externally are focused on marketing overhead rather than the core issues like products, pricing and customer interactions.

If I were a board member this would be simple – I’d be strongly advocating that this is evidence of marketing over-reach, and that the budget be stripped and the existing team reduced almost to zero. What a sad waste.

Lance Wiggs is an independent consultant providing management, strategy, growth and valuation consulting to industrial, media and internet based businesses. He blogs at Lancewiggs.com