Virgin duo to raise NT Hell

Richard Branson aims to transform the fortunes of floundering cable company NTL:Telewest. Rebranded as Virgin Media, and marketed by two of his most trusted lieutenants, it’s his chance to break into the entertainment business – and an enormous gamble, says Catherine Turner.

NTL:Telewest, which relaunches as Virgin Media in February next year (MW last week), states in its pre-rebrand advertising: “Cable. If you can, you should.” Ironically, the company’s new marketing chief James Kydd cannot, as the cable footprint does not reach his home address. But Kydd clearly believes the sentiment.

Parachuted in from Virgin Mobile following NTL’s £962m acquisition by the telecoms company, Kydd and fellow Virgin brand “lifer” Ashley Stockwell will have to convince a sceptical public that NTL, which earned the moniker “NT Hell” for its infamously poor customer service, has changed.

The weight of Virgin founder Richard Branson’s expectations rests on their shoulders but it appears to be a task both men are relishing. Branson’s long-held ambition to become a force in entertainment could become a reality after it emerged last week that NTL has approached ITV about a possible merger of the two ailing companies.

Virgin has had its share of failures. The launch of Virgin Trains was marred by poor service, while Virgin Vodka, Virgin Cola and Virgin Brides are not the success stories Branson had hoped. But the scale of the task with NTL mean the stakes have never been higher for Branson, who is the cable company’s biggest single shareholder, or his brand lieutenants.

“This is going to be the largest Virgin business in the world,” says Stockwell. “It is twice the size of Virgin Atlantic in terms of number of people. We have 900 buildings across the UK, 2,500 vans and more than 20,000 staff, so in terms of a rebrand it is much, much more than a new badge across the door.”

Kydd is even more explicit. He points to the revolving door at the cable company, which saw an “enormous” number of NTL management leave while the management at Telewest, regarded as having better customer service, emerged from the cull relatively unscathed.

“It was literally really badly managed,” he says. “However, it is good in one way because we’ve been pushing against an open door.”

Kydd continues: “Key things like putting more money into customer service have been done pretty much immediately. The City rationale was that NTL:Telewest was primarily about cost savings. But we recognise there is no point maximising cost savings if the customer service is shocking. We are not trying to say that we will forget all about the problems. We want to confront them and work out a way of dealing with them. That is the Virgin ethos rather than everything coming in on budget and on time.”

Happy Staff
Core to the Virgin brand, he says, is good customer service, delivered by “happy” staff. He points to Virgin Mobile, which he joined as marketing director, saying it is consistently voted among the best places to work despite a high proportion of staff working in call centres.

Kydd, perhaps better known than Stockwell in the marketing community, will continue to sell Virgin’s brand to consumers as managing director of marketing. Stockwell, most recently Virgin’s group brand and marketing director and a key player in acquisition talks, will oversee the rebrand internally. He will also concentrate on customer service and the look and feel of products as managing director of brand.

When Virgin Mobile became the fourth component of a “four-play” offering that also includes broadband, home telephony and television, it was expected that Virgin would have the final say over the appointment of a marketing director for the mobile brand.

However, the fact that Kydd and Stockwell were both appointed to senior roles at group level demonstrates both Branson’s respect for them and the task in hand.

Make or Break
“James and Ashley are Virgin to the bone,” says James Murphy, chief executive of Rainey Kelly Campbell Roalfe/Y&R, which handles the advertising account for Virgin Mobile. “This is probably the biggest launch and challenge that the brand has faced in a number of years. You can see why they would send those guys in to do it. They are uncompromising characters. They will have gone straight in saying what is wrong and where.”

The pair, who first worked together 15 years ago at Virgin Atlantic, are staking their reputations on turning an ailing business into a Virgin success story.

One insider says: “This really is make or break. If anyone can make a success of a Virgin cable company it is those guys, but don’t underestimate the weight of what they must do.”

Even as it unveiled the new brand identity, figures to the City showed that NTL had lost 37,000 customers in the third quarter, while its net loss widened to £96.1m from £52.1m last year.

“Culturally you cannot get more different than NTL and Virgin,” says another industry executive. “Both men have mammoth tasks. They are like a partnership of comedians. Like any strong partnership they have separate strengths but they are both extremely intuitive and are among the best marketing people at Virgin.”

Kydd says the rebranding is happening from the inside out. All staff will go through a Virgin “brand and culture experience”. He adds: “That is not chucking loads of values at people. It’s about letting their human qualities come out.”

They come, too, with a wealth of experience of the Virgin brand. While the average tenure of a marketing director is about 18 months, Kydd and Stockwell have long Virgin histories.

“I was involved in the rebranding of Virgin Trains,” says Stockwell. “We rebranded too quickly. We branded straight over from the beginning of the franchise. What we are deliberately doing here is not rebranding from the completion of the deal, which we could have done. We absolutely cannot over-promise and under-deliver.”

Kydd adds: “There’s lots of potential for the best of cable and the best of Virgin to come together and form something unique.”

David and Goliath
Yet Tim Hill, marketing and new business director of branding agency Futurebrand, worries that the business will be distracted by the ITV talks. “We know that Virgin loves to come in and play David to whichever Goliath is out there – in this case Sky,” he says. “But it should concentrate on bedding down its recent acquisitions before hunting for more.

“This is a perfect space for Virgin to move into – it’s about the brand being at the heart of people’s homes. But it is high risk. To further take on a monster like ITV with all its big, big problems is strange. I just think NTL would be crazy to do so.”

Virgin’s reputation as an innovative, marketing-led company seems certain to continue under the joint auspices of Kydd and Stockwell, with the new-look cable giant poised to offer serious competition to Sky for the first time. Yet doubts linger about whether cable, so ubiquitous in the US, can ever crack the UK. Getting rid of the “NT Hell” legacy will be a step in the right direction.•

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