When Orange chief Tom Alexander outlined his strategy for the com-pany, it came as no surprise that customer service was at the forefront of his plans.
Retail, another area of strategic growth, is already being utilised by brands such as O2 – which is all too aware of how easy it is for companies to become commoditised in such a competitive market.
Similar to the challenge faced by the utilities market, mobile operators offer similar services and tariffs and face a saturated market of almost 100% penetration in the UK. Mobile broadband is becoming the new battleground, with each operator rushing out packages and “dongles” – mobile devices which link to laptops, allowing high-speed surfing on the go.
Rival O2 is already selling a whole package offering – including telephony and broadband – under its “better connected” positioning, one that France Telecom-owned Orange looks set to ape under a “togetherness” banner. And, according to analysts, while O2 and Vodafone lead the retail charge, Orange and 3 lag in comparison. Both have responded by expanding into the sector, but each needs to find its own way to stand out as a brand.
An industry insider says: “You get a sense that a lot of drive is going out of the retail side. The interesting thing will be what happens from a marketing point of view. How do you both cut costs and keep yourself differentiated and customer-focused?”Dan Bobby, managing director of brand consultancy Dave, suggests that Orange has struggled in recent years to differentiate itself, despite its radical launch in 1994, which won plaudits for its different and emotive stance. He says: “For the last eight years, there’s been a cigarette paper’s difference between the brands.” Yet the Orange brand is still powerful, he adds, suggesting France Telecom rebranding itself to the moniker “speaks for itself”.
Orange has already made it clear that it wants customer service to define its brand. Alexander says he will cut 450 jobs across the company’s management and administration teams in favour of 500 more customer-facing roles in its UK customer centres and its shops. The mobile company will also introduce branded laptops, just one indication that it is about more than just mobiles. Alexander says this will include a small lightweight laptop-phone hybrid.
Strategy Analytics director of global wireless practice Phil Kendall says: “My view of Orange is that ten years ago it stood out as a brand – it didn’t follow everyone else. Anything that can improve customer care will now be the building blocks.”
However, he says that Orange is “very local” in its nature and suffers by being owned by France Telecom. He adds: “It’s very aggressive in France, but it’s yet to push the French model to any level of success. It is more of a fast follower than an innovative player.”
He adds: “It’s hard to see outside of France. What they’ve struggled with in the UK is Carphone Warehouse’s pricing regime. It’s positioned itself as a high-quality player, but it needs to put more into the broadband package.”
However, chief executive Tom Alexander says its strategy and ambition revolve around differentiation, “investing in the network, investing in technology, investing in service”.
Reliving the launch
Alexander, who was previously the founder and chief executive of Virgin Mobile, says that people were “stunned by the iconic brand of Orange” at launch. He adds: “I saw the birth of Orange and you could not help but be impressed.”
Now he sees it as the mobile operator’s duty to win “the hearts and minds” of its customers.
Alexander insists that Orange’s strategy is as much about retaining its customers as gaining new ones. However, he adds that the company will concentrate on encouraging its current customers to recommend the brand to others.
Orange’s future may still be bright, but it must ensure that the company’s branded products and top-notch customer service are the right tools to make it stand out among arguably more advanced competitors.