The new Telstra: Boosting staff morale or "morals"?

When you set about transforming an under-performing services marketer, so the thinking goes, often the most important and hardest thing to change is its culture. Organisations like banks and telecoms perform best when the beliefs and behaviours of customer service personnel are aligned with corporate mission and values, and when everyone in the organisation understands his or her role in creating value for both customers and shareholders.

Employees of Telstra, and especially those in "front-line" functions like call centres, have doubtless had a hard time keeping the faith through recent years of struggle, uncertainty and unpopularity. But it looks like Sol Trujillo and Phil Burgess, experts in organisational change, may have succeeded in turning around the culture and boosting staff confidence.

Never mind the broadband technology, I met one of the "Next G" of Telstra employees over the weekend. She was proud of the company, apparently certain of the corporate mission and vision, and unshakeable in her dedication to ensuring Telstra targets the right customers… it’s just that I clearly wasn’t one of them!

My daughter won a mobile phone on Saturday. It came with a Telstra Pre-Paid "bundle". She already has a hand-me-down phone with a pre-paid account, currently with Optus – Telstra had previously been sopping up her unused credit every few weeks, leaving the phone useless in the occasional “emergency” situations for which it is intended.

So we set about switching her over to the funky new handset. Optus told me I needed to call Telstra to "unlock" the new phone so it could be used on another provider’s network.

"You’ll have to pay an unlocking fee," explained the Telstra customer service officer to whom I eventually got through. "For a new phone, that will probably be around $200."

When I said I thought that was a bit steep, especially for a pre-paid phone won by a 12-year-old, she disagreed. Anyway, she said, “I wouldn’t be giving a phone to a 12-year-old.”

Introducing Telstra’s new positioning in mobile telephony: the responsible, adults-only, service provider that knows better than you do whether your child should have a phone. If Telstra intends to put morals ahead of revenue and no longer sell mobile service to parents on behalf of their kids, shouldn’t we have seen some kind of announcement to the ASX?

Not that I got a chance to ask this newly-aligned and empowered Telstra advocate about the company’s strategy. "I actually work for Telstra and I won’t sit here and listen to you criticising them," she said. And there, by mutual consent, the call ended.

Reply to Karl Treacher on "brand deceit"

I really appreciate Karl Treacher’s reply to my blog on his description of an "audit" that judged Vodafone to be "top of the bad brand behaviour list" because of "brand deceit" (as quoted in B&T magazine, 9 February 2007). However, I’m afraid Karl’s reply simply raises a lot more questions than it answers.

"Deceit" is a very strong word with a very specific meaning. The Macquarie Dictionary defines deceit unambiguously as "the act or practice of deceiving; concealment or perversion of the truth for the purpose of misleading; fraud; cheating".

The B&T story suggested that consumers had rated Vodafone highest on "deceit", but included absolutely no information about the study. In particular, in my original piece, I wondered about the methodology. Well, it was "sound", says Karl: "A 9 month study – man on the street Qual. 7 stores, 10 people / store".

So how were these qual respondents selected? What stores? Was there randomisation? What level of knowledge and experience had the respondents had with each of the categories and brands? In other words, how representative was the sample of the bulk of Australian consumers?

To make a judgment that Vodafone was "top of the list" of badly-behaved brands clearly implies some kind of quantitative assessment and measurement, beyond the findings of qualitative research. Was there any statistical analysis of the positions on the list? For example, how many respondents with a positive view of Vodafone would it have taken to knock them off the top? Two out of the 70? Ten out of 70? Fifty?

And where did deceit come into it? Was this the actual word used by consumers spontaneously (very uncommon in my experience as a qual researcher) to describe a disappointing brand experience, or a term offered to them by the qual interviewers, or was it added in post-fieldwork analysis by the folks at Brand Behaviour? Was the degree of deceit scored and compared by respondents on some kind of scale (in order to arrive at a list of the worst)? Were respondents asked to rank brands (put them in order) in terms of "deceit"? Which brands?

The point is, when you say a brand was "top of the list", then we expect that there’s a list somewhere and an explanation of how they got in that order. Karl’s use of the term "audit" also implies a structured measurement (quantitative methodologies) against some kind of benchmarks, rather than exploration and investigation (qualitative methodologies).

There’s a very big difference between – on the one hand – a brand that lets customers down and fails to deliver on its stated brand promise, and – on the other hand – a marketer that sets out deliberately to conceal or pervert the truth, and to cheat and mislead customers (as per the accepted definition of "deceit"). If consumers really believe that Vodafone has practised deceit, then the ACCC should sue them under sections 52 or 53 of the Trade Practices Act, which deal with misleading or deceptive conduct and false or misleading representations in trade or commerce.

I have no argument whatsoever with Karl over his conclusion that Vodafone hasn’t lived up to the promise of a couple of years ago – it has clearly slipped a long way from the position it held in 2004 - and that consumers may well feel the brand hasn't lived up to its promises. But in service markets like telecommunications, banking and insurance, there’s a 20-year stream of literature on "gaps" in service quality and service delivery that provides many suitable terms – with numerous published benchmarks – to describe under-performance against expectations (e.g. the Berry, Parasuraman and Zeithaml "negative disconfirmation" model). I just don’t think a term like "brand deceit" is necessary, illuminating or appropriate to describe what has happened to Vodafone.

Not that I want to sound like a grammar teacher, but "integrity" is also a pretty strong word.

The cover of B&T is a lot more public a forum than the QBrand QBlog. And clearly the Brand Behaviour report didn’t come into the possession of B&T off the back of a truck. Given that B&T claimed it as an "exclusive", I’m sure that Karl fully expected that it would get a run and generate publicity for Brand Behaviour in the process, with some quotes thrown in for good measure. He should also, therefore, have expected, and been prepared for, reasonable scrutiny.

Instead, Karl is being laughably unreasonable in questioning my integrity, apparently because I didn’t contact him personally to "get insight" before making public comment about the story. Does he seriously expect all 6000 readers of B&T to contact him directly if they have doubts, concerns or questions about his research, its apparent findings and Brand Behaviour’s interpretations?

Brands (or brand consultants) behaving badly?

Like a promo for Desperate Housewives, the front page lead on the 9 February issue of the advertising industry weekly B&T promises to dish the dirt on the "cheats and deceits" in the world of brands.

"Our worst brands" have "deceived" customers, according to the findings of "a new audit exclusively obtained by B&T". Vodafone, NRMA and St George are criticised as the "worst behaved" brands, apparently for having stood for something they then failed to live up to.

Is this the pot calling the kettle black? The story promises a lot but delivers very little. Maybe that’s because, as it turns out, there’s "more to come" in next week’s B&T. Or maybe it’s because there’s not much substance or rigour behind the analysis in the first place.

The "audit" cited in the article was conducted by the Sydney-based consultancy Brand Behaviour. Karl Treacher, CEO of Brand Behaviour, says "brand deceit" is at the top of the list of bad brand behaviour and "so is Vodafone". Strangely, given the emotive connotations of the word, there’s no clear definition of "deceit". Branding Vodafone a "deceiver" seems a bit risky when there’s no information about the methodology: how many consumers were asked, which consumers, and how confusion and deceit were measured.

Many ad agencies and consulting firms have invested massive resources developing proprietary names and definitions for concepts related to branding. Consequently, it’s getting harder to differentiate well-founded, well-researched and well-intentioned concepts that add value and understanding to the discipline from those that owe their origin purely – and often cynically – to commercial motives.

Concepts like brand personality, values, image and identity are well supported by scholarship and empirical research. But according to the agencies, brands may also have brand DNA, brand aesthetics, brand sense, brandstretch and brand manners. A brand may even be a "lovemark". And now a "brand deceiver", too.

In 2004, Professor Mark Ritson – now at the Melbourne Business School – noted this "confusing cornucopia of conceptualization" and warned that "the brand of brand is in crisis".

Interestingly, also back in 2004, Karl Treacher wrote an "exclusive" article for B&T in which he told of having "investigated the relationship between marketing promises and internal fulfillment (sic)" at Vodafone (reproduced here). "Our findings were nothing short of extraordinary," he wrote. The Vodafone brand "grew in a place where no telco has ever been before, in our hearts".

Given his earlier state of rapture, perhaps Treacher’s current perspective on Vodafone should be viewed as that of a jilted lover dissing his "ex"!

Comet McNugget: A lost marketing opportunity?

Given both its aggressive stance towards anyone or anything else using the prefix "Mc", and its knack for spotting an opportunity, it's perhaps surprising that McDonalds let recent astronomical events slip by without acknowledgment or intervention.

Comet McNaught put on an unexpectedly impressive show last week (you can see some pictures here), far more spectacular than the much-anticipated but underwhelming Halley's Comet in 1986.

A number of courses of action might have been open to the folks from the Golden Arches. For example, they could have sought a licensing deal to produce a "McNaught McNuggets" Happy Meal, with astronomical facts on the box and a toy comet (a lump of ice?). They might even have tried to buy the naming rights to the comet from the Australian astronomer who discovered it last August (you can read the story of it here).

But perhaps more true to form would have been legal action to try to restrict use of the "Mc" (leaving it as "Comet Naught"?), as McDonalds has taken against a number of other traders, viz. its current ham(burger)-fisted efforts in Victoria (see today's Herald-Sun), and even beyond food service markets (e.g. "McBrat" in clothing).

Action over the name of the comet would have raised an interesting legal question: just how far into the solar system do McDonalds' IP rights in "Mc" and "Mac" extend?