Consumers are growing increasingly apathetic to new phones as the devices get so good that fewer feel an urgent need to regularly upgrade. This was a particular challenge for O2 ahead of the launch of the iPhone 8.
The mobile operator found that increasing numbers of out-of-contract customers were holding on to their handsets rather than upgrading, with the percentage of customers out of contract increasing from 18.7% in 2016 to 21.1% in 2017.
At the same time, the mobile market was moving towards de-coupling and sim-only plans. And to make matters worse, O2’s share of voice in the market was coming under pressure as BT, Vodafone and EE upped their spend and Sky launched its mobile offering.
That led to a business challenge for O2. The market headwinds had led to a declining market share among iPhone customers, a significant issue given that a loss of one percentage point of market share can equate to £40m of value.
With the new iPhone about to launch, O2 needed a marketing approach that didn’t lean on the quality of new handsets or on price alone.
To do that, O2 engaged its agency VCCP to find a compelling new proposition that could get people excited about the new iPhone and buying it on O2. And the campaign it launched had such strong results that it won the Telecoms, Energy and Utilities award at the Marketing Week Masters Awards in 2018.
Market research revealed that while people didn’t necessarily want the latest phone anymore, they did want it to look and feel new for as long as possible and the biggest barrier to this was cracked screens.
Some 21 million people in the UK have experienced a cracked screen, while 5 million continued to use their phones when they were smashed, with half of those feeling the expense of fixing wasn’t worth it.
With that knowledge, O2 launched a proposition that would give new and upgrading customers of the highest value handsets (in this case the iPhone 8 and X) free screen replacement. They also needed to convince existing customers to move up the tariff table, for example from a 2GB to a 5GB mobile plan and ideally to the 20GB offering.
The campaign was kept simple by giving the impression of a cracked screen over O2’s signature blue along with the word ‘Oops’ as a playful way of dramatising the horror of cracking a phone screen. This creative was across media formats including TV, outdoor, video-on-demand, Snapchat and in retail.
It proved hugely successful. The creative itself had effective cut-through and was well-liked by consumers, outperforming on Millward Brown benchmarks on metrics including ‘new information’, ‘makes the brand appealing to iPhone customers’ and ‘branding’.
That flowed through to sales, which substantially outperformed targets. The campaign helped O2 sign up significantly more customers for a new iPhone than forecast and at a higher value, with many customers jumping not one but two or three tariff bands to qualify for the free screen replacement.
It also proved highly effective, with strong ROI numbers, and helped O2 rebuild its unit share of the iPhone market and exceed its previous value share.