It’s good to talk – but what next for BT?

Matthew Dearden’s exit from the nation’s leading telecoms provider to become CEO of Clear Channel Outdoor will leave a tough legacy for his replacement to follow. He spoke to Marketing Week about what’s still to come from the telecoms firm.

Adam and Jane, BT campaign
Adam and Jane, BT campaign

Having merged the company’s television, broadband, fixed line phones and devices together under one marketing team earlier last year, his replacement faces a tough challenge to retain existing customers with tempting new offers and lure back those who have switched to a competitor’s service.

Dearden has successfully adapted the brand’s marketing over recent years, moving away from the brand’s infamous “It’s good to talk” ads, fronted by celebrities including Bob Hoskins and switching to a more family focus under the current “Adam and Jane” sketches, fronted by My Family actor Kris Marshall and Spooks actress Esther Hall.

Here he tells Marketing Week what his successor can come to expect from being in charge of leading the central marketing team and taking on overall budgetary responsibility for the BT Retail division’s marketing.

“Over the years, what’s become more noticeable is that BT operates in a highly competitive environment where our core markets are converging and prices continue to fall. It’s essential that we get closer to the customer, aligning our resources to deliver increased brand perception and better integrated consumer campaigns. We’ve done this by focusing on consumer insight led marketing and this will be pivotal going forward,” he says.

Whilst BT struggled to make headways in the mobile sector, it is the leading brand in the telecoms market. According to its latest figures, it currently has 13 million consumers renting lines from the brand (though not all are actually paying BT for calls).

Dearden acknowledges that fixed lines are the company’s main brand asset, which is why the Adam and Jane ads have focused on promoting these the most. BT’s latest figures reveal it has 61% share of lines and 49% of calls.

“Regulatory changes have given our competitors a helping hand in trying to sign up some of our customers, so it’s important that we focus on our best brand benefits in our marketing. The Adam and Jane ads have really been created to reflect what our customers tell us they love about our services and make home telephone calls a much more emotional and resonant service. At times, we’ll showcase other products like the HomeHub, but it’s always about connecting with audiences and helping them to appreciate the benefits our products can bring to their home lifestyles.”

Dearden says research shows that the ads are recognised as BT within three seconds of airing, with viewers often contacting the company to express their views. Most recently, the company has used Facebook to debut its ads and it is now inviting the public to choose a conclusion for the storyline..

“What’s great about Adam and Jane is that they always have sentiment behind them. So in this way, it’s great to see such online buzz surrounding it. For us this is our opportunity to experiment with that and give fans a chance to interact with the brand. We have a real dialogue going with these fans – they are even playing virtual wedding planners to the happy couple!”

Yet, despite the positive reception for its traditional fixed line services, Dearden’s replacement will face a more competitive push when promoting its other services. Its broadband service seems to be gaining momentum, with an extra 134,000 consumers added in the last quarter, though its TV audiences are still miniscule compared to its competitors. The service has yet to break the one million mark.

Dearden admits this is an area where marketing remains a challenge. “On one side, you have rival media companies like Sky and Virgin Media looking to offer alluring bundles, and on the other you have the mobile networks offering subsidised contract deals. It’s something that is a constant challenge, and the pressure is on to stand out amongst this crowded marketplace.”

Most recetly, Dearden and his team have been promoting the future nationwide launch of fibre-optic broadband. BT’s Infinity ads played on the “instant internet” theme given the advertised download speeds of the service, and aimed to boost interest from consumers and businesses alike. The company claims to be the market leader in broadband with a 27% share of the consumer market and says it also leads the market in terms of trust and reliability.

“We are facing increased competition in the broadband market, but our customers continue to tell us how pleased they are with the service. We’re determined to continue to promote all the benefits of our service, and not just speed. Our customers are our lifeline, so we must always be servicing what they want to know, as well as enhancing the performance of their broadband and offering better customer service and lower fees where possible.”

BT’s next big challenge is maximising the usage of its BT Vision television service amongst its broadband customers. The company recognises this as one of its strategic priorities for the future and says it will “build a scale TV network eploiting BT’s broadband network.”

Dearden admits this has been difficult in the past, but new opportunities will help make the service a more “sellable service”.

“It’s been early days for BT Vision to date, and it’s a relatively immature service. But things are changing and we are investing in the network to make things much better and make the sevice much more appealing to our customers. Sky Sports channels being available at low costs and new all-in-one communication hubs will help to make BT the main communication and entertainment partner in everyday homes.”

BT says it is heralding a new era of competition in pay-TV by launching the UK’s best value deal for Sky Sports 1 and Sky Sports 2 for just £16.99 a month, which it has backed with a £30m aggressive marketing push.

BT Vision customers can add the channels for the simple monthly price on a month-by-month contract. If they only want to add either one of Sky Sports 1 or Sky Sports 2 they can do so for only £11.99 or with a bundle of broadband and calls for 24 months, packages start from just £6.99. It has also partnered with OnLive to offer online gaming.

The additional channels join the company’s current promises to offer Freeview, on-demand films and HD Downloads. In the future, it will also offer access to the BBC iPlayer, on-demand television through Project Canvas and premium pay-TV.

Dearden says: “We’re definitely in a better place for BT Vision now and we will be much more aggressive in marketing the channels and promoting bundles to get people to sign up to our broadband service and enjoy the best in television. Entry prices as low as £6.99 will welcome in a huge number of extra customers who’d love to enjoy these channels, but thought they were too expensive. More pushes like this are bound to follow.”

Sport is also an area where the new marketing director will have more room to maneouver. Although it can’t compete on Sky HD’s recent marketing blitz, the brand is a tier one sponsor of the London 2012 Olympics and is the official communications partner of the England 2018 bid. Dearden won’t be too far away from the 2012 work, with CBS being the official outdoor advertising supplier of the Games. He says BT will play heavily on sponsorship activation in the future, by “utilising these ideal fits for a national brand”.

Analysts say a new marketing approach could help to improve the number of customers taking up BT’s various offerings, especially with its new sports and on-demand deals. Ovum analyst Annelise Berendt explains: “The problem BT faces is that more people are interested in Freeview and only paying for internet services. However, the continued expansion of programme offerings and interactive services could help BT give its competition a run for its money. This and its trusted status in the fixed line and broadband markets means any successor has a solid foundation to build on when it comes to marketing the next big advances.”

Dearden leaves BT at the end of July. BT says that until a successor is appointed David James, BT director of customer insight & intelligence will serve as interim marketing director.

Dearden is clearly leaving the BT brand in good shape. Yet, it hasn’t all been plain sailing. The brand hit the headlines yesterday (14 Juy) for announcing it was raising the cost of payphone calls, and recent threats of a mass employee strike could have cost the brand its customer service status,. had BT not agreed on a 39 month deal that will take both sides through until March 2013.

The big challenge for Dearden’s successor will be finding new ways to invigorate an already thriving brand, and add new fire to a fledgling TV service that is about to become more competitive.

The chsosen successor will have the tough challenge of maintaing the good to talk sentiments, but also focus on pushing the surf and view opportunities – while all the time thinking of how to avoid sounding like Sky who have used the “surf, speak, see” tagline for so many years.

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