Hugo Mackay, Marketing Strategy Lead at Virgin Media O2, explains the brand's approach to building customer relationships, the blurring lines between techcos and telcos, and more.
How do you set your marketing goals and the KPIs around them?
We work with a centralised strategy team that deals with marketing and products, so our goals are varied and a mix of marketing-related and commercial-related. Ultimately, they all ladder up to the same thing: acquiring customers. But it’s also about building great relationships with customers and doing the best for them throughout their lifetime with us. And of course, aiming to retain their custom for as long as we can.
There are lots of associated KPIs with these goals. Firstly, acquiring customers. However, we also want to ensure that once they join us, we give them the best in-life experience, ensuring they see the benefits of our services and hopefully take multiple products and services from us.
It’s also about the natural life cycle of a phone contract. We want to make sure that we're giving customers every good reason to not just stay with us, but also for them to continue renewing products and services.
How do you translate those goals into your selected media channels?
Different customer segments will experience different journeys. For instance, for a prospect who prefers to go digital the associated goals and measurement for them will be in the digital space. At the other end of the spectrum, we have an amazing suite of stores and customer service touchpoints for someone who likes the idea of face-to-face recommendations.
As a mass-market brand, we cater to a full range of needs. As for our media strategy, as a brand we see benefit and value going above-the-line to talk about and maintain trust and excitement in our brands and our product offerings.
We operate in a world where reaching certain audiences now requires using a full array of digital touchpoints that they will use on their purchase journey. It's not a linear process anymore; therefore, all our targeting and goals are set accordingly.
What do you see as the strengths and weaknesses of integrating audio digital channels into a broader media mix?
We know for sure that audio channels – whether it’s music or new, more popular audio content like podcasts or digital radio – are a critical part of the media mix to engage audiences. Music is universally loved and a powerful tool to help connect with audiences and associate your brand with.
The proliferation of the audio content types also means that we can target customers with the content that they associate with.
Audio – radio and music – is what people listen to while doing other things. So, in the attention economy, associating yourself with the right kind of audio content and having a media strategy that aligns with that is very powerful.
In our research, we saw that to some degree, telcos tend to struggle with driving brand distinctiveness. What are your thoughts?
Telco has scaled as a market. There are more options available to consumers than ever before but in essence we are all seen to do and offer the same thing. Consumers’ understanding of the category has also increased. People have more information at their fingertips now. These two opposing factors have put a real squeeze on differentiation in the telco market.
Nevertheless, there's still a significant need for trusted brands in this space. People are more reliant on connectivity now than ever before. The whole notion of having a ‘trusted provider’ that is going to offer you consistent speeds, a reliable service and a connection that’s the lifeblood of their lives, jobs and relationships, is important.
So, while there's a lot of pressure on it, I think it’s possible to differentiate for a particular, smaller, more targeted audience. Some of the newer players in the telco market have come up with very specific propositions and they've done very well.
We are seeing this shift from telco to techco. How do you see this playing out? And where will it lead in the future?
I don’t think anyone has the absolute answer to this. As connectivity is such an essential part of everyday life, we understand a lot of user behaviour that happens through connectivity – whether that's what people are using their mobiles for or what connectivity is being used for. That puts us in a very privileged position to understand what consumers’ needs might be at any moment.
This leads you to ask the question: going beyond just connectivity, are there other more targeted products and services we could offer?
As separate entities, Virgin Media and O2 have always offered a combination of connectivity and hardware, and the merger of the two companies last year means we are now even better equipped to meet customers’ needs. The more we can successfully partner with those tech players over time, the better it will be for our customers as we’ll be able to offer even more tailored products and services to suit them.
It feels like big tech, and we in the telco space are moving towards a converged centre. However, it’s very early days in this space.