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O2 Experiences Its Own Blackberry Moment

Posted by: Freddie Blackett on July 18, 2012

O2 

O2 is probably the UK brand success story over the last 10 years. A spin-off of BTCellnet, it was initially scoffed at by the FT for being “BT’s unwanted orphan.” It has since built a clearly differentiated brand that has torn up the industry rule book.

O2 has become synonymous with live music through The O2, O2Academy and O2Wireless; being the first and, initially, exclusive provider of the iPhone in the UK; and for transforming the future of transactions with their up-and-coming innovation, O2 Money. Thanks to these and many more, O2 is the UK market leader, with a Net Promoter Score (NPS - measured in June ’10) of 24%, leading an industry where the average is 3%.

Expect that number to plummet, however, as a result of their recent service outage. Heed the lesson of Blackberry, whose NPS fell from 15% to -6% after their service failure late last year. A myvouchercodes.co.uk survey published today finds that out of 894 O2 customers, 34% say they plan to leave the network and 83% expect a reduced bill or credits as compensation for the outage.

All this reminds me of a quote from the O2 CEO, Ronan Dunne:

When we started we weren’t the best voice provider or text provider. In fact we were average, in a market which was becoming more and more commoditised. Our hypothesis was that we could differentiate in a commoditised market by looking at the experience we delivered as opposed to the technology.

O2 PromoWith so many brands preoccupied by the wider brand experience, there’s a concern that it’s becoming the new advertising, through which so many brands preach their benefits but then later fail to deliver. In other words, it’s as Interbrand London CEO, Graham Hales often likes to put it – "lipstick on a pig." It’s easy for brands to get carried away and forget the reason their customer signed up to the brand in the first place – their product.

Could we see a consumer backlash against the "Experience Economy" in a return to simpler, more focused product-led branding? For true customer loyalty brands will need to draw their brand experience closer to their core product and service and ensure that this core product is the best it can be.

To totally corrupt an Ogilvy quote, “Can a pair of tickets to Jay Z at the O2 foist an inferior product on the consumer? Bitter experience has taught me that it cannot.”

 

Freddie Blackett is a Brand Strategy Analyst at Interbrand London.




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