Vodafone, the world's largest mobile operator, has been experiencing mixed fortunes over the past two months, with our local Vodafone (VHA) in Australia in a predicament which is in stark contrast with its fortune overseas.
The irony of the recent Vodafone network issues in Australia is that Vodafone as a larger global mobile company has been intensely experiencing the two sides of the same coin.
In Australia, Vodafone is now a joint venture company with 3 Mobile (Hutchison Whampoa) called VHA (Vodafone Hutchison Australia) after a merger in 2009.
It has been a very tough two months for Vodafone in Australia, in stark contrast to the carrier's fortunes outside of Australia which has seen it enjoying an overwhelming flood of positivity - at levels almost close to Alan Greenspan's famous irrational exuberance.
Vodafone Australia's woes have included press reports exposing dodgy dealers who were rorting the dealer system, and less than perfect security on personal information within dealer stores. The company has responded to these issues with the sacking of the dodgy dealer, and a change in the security process, but the original story did show lack of awareness of security in the dealer channel.
Most well publicised though has been the intermittent network issues which came to a head in December when Vodafone acknowledged the problem, apologised, and asked affected customers to contact them so they could put things right. The network issues were pegged against software upgrades gone wrong. Yet, the most perplexing thing for customers was the delay in Vodafone's response considering the issues started in October. The the company was slow to go in to full swing to provide network status updates and communicate about the problems, although they now report that they are happy with the fixes.
The issues were, and still are, a time of great opportunity for Vodafone. Marketers have always counseled that customer problems / complaints are a chance to create loyal customers for life where these customers become your best brand advocates, depending on how the company deals with the problems. More on this below.
Yet, is Vodafone as a larger global entity, the one with the most mobile revenue and largest mobile phone footprint of any company in the world, that is actually streaking ahead in the US, all on the strength and reputation of its network. Vodafone's Australian operation only accounts for less than 5% of the total customer base, with the majority of Vodafone customers in Europe / UK / USA (under Verizon Wireless).
In stark contrast to the Australian situation, Vodafone's 45% owned Verizon Wireless is getting the exact opposite treatment in the press about its network and is held high as the premier network in the USA for coverage. The catalyst for the gushing love for Verizon's network has been the impending release of the Verizon's iPhone 4, a modified version of the iPhone 4 tailored to work on Verizon's CDMA network in the US.
In the US, the iPhone has been exclusive since 2007 with only one carrier, AT&T. The complaints about that network have been very vocal as the network struggled under the onslaught of data hungry iPhone customers. It has been working hard for years to fix this and has pointed out that network upgrades and new towers to add capacity in affected areas can take up to two years.
Then the rumours of an iPhone for Verizon Wireless started coming. For years these rumours did not stop as customers grew bored of berating AT&T, and began salivating at the thought of an alternative network to switch to.
The iPhone 4 launches on Verizon Wireless in two weeks and the internet is at fever pitch, celebrating the Verizon Network as the one place that will make their iPhone powerful again. Check out the 'there's a map for that' advertisement to show Verizon Wireless on the front foot.
Yet, even without the iPhone, customers had still been flocking to Verizon Wireless, with the company adding 872,000 new customers last year, and doubling profits.
So, whilst watching these events unfold, we've often discussed in the WhistleOut office what would the Vodafone Group CEO, Vittorio Colao, be thinking about these global ups and downs before shutting his eyes at night. His brand takes a hammering in Australia, but on the flip side his brand in the USA has been getting ten times the amount of press, and all of it organic, feverish and overwhelmingly positive.
In Australia, Vodafone have asked for affected customers to contact them directly for them to make things right, but we'd love to see them nail this issue completely with a large, well publicised offer to make good to any customers that were in or near any areas that experienced some network issues. Some sort of broad incentive to thank them for their patience. There are probably many who just rolled with the experience but are not the type to complain, so the broader the better.
There are some nice precedents on how to make good with customers. For instance, look at how Apple handled the premiere of the first iPhone (2G) back on June 30, 2007 in the US. They launched the phone at $599 upfront, yet after two months (and to drive sales further into the mainstream), they slashed the price by $200 to $399 upfront.
Early adopters who paid the higher price were furious. Apple then offered a $200 refund to customers who had purchased up to 14 days before the price change, and then offered all of the customers from the previous two months a $100 Apple voucher.
The logic - Apple relies on early adopters, the fans, to spread the word about Apple devices and share with friends who then become the major purchasing wave - the mainstream. The early adopters and Apple loyalists jumped on top of the very first iPhone and Apple needed to keep them on side to spread the phone fanatically to mainstream, which we all know they did.
What Next?
When Vodafone started experiencing these network issues, we're sure that the network guys were the ones that were called in for the urgent internal meetings and were pushed to provide a rapid response. However, at the same time, we hope the Vodafone marketing team were working just as diligently on the marketing problem it faced as a result of this physical network issue.
We're not smart enough to know exactly what Vodafone should do next but we would love to see them nail it. If we were in the marketing team, we'd be flipping open one of our marketing books to find inspiration. For example, just look at these gems from marketing vessel, Seth Godin.
What Every Good Marketer Knows:
- Making promises and keeping them is a great way to build a brand.
- Your best customers are worth far more than your average customers.
- Conversations among the members of your marketplace happen whether you like it or not. Good marketing encourages the right sort of conversations.
- Products that are remarkable get talked about.
- Marketing is the way your people answer the phone, the typesetting on your bills and your returns policy.
- What people want is the extra, the emotional bonus they get when they buy something they love.
- One disappointed customer is worth ten delighted ones.
and this post from his blog...
Getting unstuck: solving the perfect problem
The only problems you have left are the perfect ones. The imperfect ones, the ones with a clearly evident solution, well, if they were important, you've solved them already.
It's the perfect problems that keep us stuck.
Perfect because they have constraints, unbendable constraints, constraints that keep us trapped. I hate my job, I need this job, there's no way to quit, to get a promotion or to get a new boss, no way to move, my family is in town, etc.
We're human, that's what we do--we erect boundaries, constraints we can't ease, and we get trapped.
There's no way to solve the perfect problem because every solution involves breaking an unbreakable constraint.
And there's your solution.
If the only alternative is slow and painful failure, the way to get unstuck is to blow up a constraint, deal with the pain and then run forward. Fast.
The way to solve the perfect problem is to make it imperfect. Don't just bend one of the constraints, eliminate it. Shut down the factory. Walk away from the job. Change your product completely. Ignore the board.
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