Analysis - Out with the old: 3’s brand refresh

Analysis - Out with the old: 3’s brand refresh

The times of huge handsets and failed connections may be long gone, but for 3, the legacy has been difficult to shake off.

The operator is planning to double its customer base over the next five years, propelled by a brand refresh and marketing campaign launched last week. The refresh will centre on 3’s strength in internet, with Three.co.uk stamped on everything it does.

And with the Orange and T-Mobile merger looming, 3 needs to act fast. It has changed its logo to black and white, aligned its retail and online channels, and launched an advertising campaign to rival its more sizable competitors.

‘We want to double the size of the business in the next three to five years,’ says 3 sales and marketing director Marc Allera, who at the same time acknowledges that ‘the advertising alone is not going to do it’.

He says: ‘Internet is linking people together – internet is the opportunity growth area, and it gives us confidence. All our tariffs come with internet options in PAYG. Contract voice is an opportunity, as well as the number of devices to access internet on the move, such as the iPad.’

But will it work? CCS Insight analyst Shaun Collins says: ‘In a marketplace where Vodafone are becoming more aggressive and O2 are very powerful, you have a strong number three and number two.

‘In the newly merged T-Mobile and Orange company, there will be a powerhouse and then there will be MVNOs. I think it will be a Herculean effort for 3 to double its customer base.’

Allera believes 3 can grow more aggressively than in the past because of Ofcom’s recent termination rate decision. He says: ‘The rate comes right down. We can now offer unlimited voice with tariffs coming down to £35 per month. Look at the States and Hong Kong. That’s what they’ve got.’

Allera adds: ‘We are the challenger brand. The role of 3 is ever more important in the market, competition for consumers is high on the agenda. We are small in relation to these guys [the other networks] – we have had success but competition is much higher up on the agenda.’

But for 3, the past few years have been about mobile broadband, and this is where they are ‘very strong’, Collins concedes. He adds: ‘They knew that if they were to embrace the internet, they needed smartphones as well. They needed to re-engineer 3G, as subscribers now understand the need for speed (see box) – which they didn’t understand a few years ago.’

3 saw 3G early. It is trying to establish in people’s minds the opportunities a 3G network can provide. The network also has its network share agreement with T-Mobile – MBNL – giving it 13,000 base stations by the end of this year.

With its ever-improving customer experience in mind, 3 will now focus on the benefits of a deal, rather than the price as it had previously done.

‘3 is being prudent in what it does, says Collins. ‘What is 3 known for? The best value for your pound. But there is a reason – coverage was not as good as the others. Now 3 is more confident that it can be an experience leader, but will it succeed?’

The network may be small, but Kevin Russell has put it ‘on an upper curve at the moment’, Collins adds.

3 may not become a giant overnight, but it is a business that is gradually turning the corner, in one of the most competitive market places in the world.

Will Vodafone merge with 3?

Some have speculated that 3’s refresh may be a sign of the operator gearing itself up for a sale, with Vodafone the most likely buyer.

One distributor source says: ‘The undercurrent is about whether they will be bought by Vodafone or O2. I think they are gearing up to sell – it’s not if, it is when.’

Meanwhile, CCS Insight’s Shaun Collins says: ‘What are Vodafone’s options? We have to assume they are not happy to be number three.
I can only see a merger – not a takeover. Vodafone and 3 merged in Australia, it is inconceivable that they haven’t had the conversation.’

 

The need for speed

Consumers are becoming more savvy when it comes to technology such as 3G, with speed of optimum importance when choosing a network.

Collins says: ‘There is no question in our minds that as people understand the need for speed, the experience is not being disconnected.

‘The conversation between our industry and the consumer has changed completely over the last 18 months,’ says Collins. ‘We are not talking about talking anymore – it’s all about the internet.

Most people use their phones mainly for talking but is this the reason people think about what they are buying? No – it becomes a commodity. People no longer buy just for minutes – it’s the complete package.’

 

The new campaign

A new ad campaign started on 8 May. The campaign has two phases: the first is TV, cinema and outdoor, the second press and online (pictured, left). ‘It’s in the style of a film showing the people at 3 who go into making the network,’ says Allera. ‘It will introduce people and make people smile.’

Allera adds: ‘It’s a big campaign and the first chapter in the story we are going to talk about. We are going to show all the effort that is going into the network. We have a legacy – big handsets, a bad experience. We have a different experience now, we have been doubling the size of the network.’

All activity is centred around 3 being the ‘best network for internet’ on the move, with Mi-Fi and 3 chips for embedded devices featuring in the push.

The campaign and rebrand met a positive response from dealers last week.

One distributor source says: ‘I like the way they’ve done it. I liked the new look and feel and the consistency of the internet pitch. They’re giving the right support for dealers.’

He adds: ‘Retail dealers don’t have a lot to sell – 3 is giving them something to sell.’

 

Retail changes

Retail staff have been given a guide on a new way of selling the network to customers. They will now educate customers on the benefits of 3G vs 2G, telling them the top three things the network has achieved over the last year.

The top three things delivered are: increased coverage to 3.1 million people, a 25% reduction in dropped calls, and doubled speed of mobile broadband.

Allera says: ‘With retail we are selling the strength of the network and the network rollout programme. It used to be a technical project, but now it’s a sales and marketing project.’

3’s in-store magazine has also been rebranded and will be called ‘Instore’ rather than the ‘Buyer’s Guide’.

Allera says: ‘We have 10,500 base stations and we’ll have 13,000 by the end of the year. The impact it is having is huge – it is improving internet experience, there are less dropped calls, lower churn and lower returns.’

The times of huge handsets and failed connections may

Written by Mobile Today
Mobile Today

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