Wireless penetration is at 63% in the U.S. and 75% in the northeast, according to Stacia Goddard, executive vice president/managing director, Hill Holliday/New York. For her client Verizon Wireless, that means that the “land grab” is over. When a wireless carrier gets a new customer now, they’re likely stealing that person from another provider.
“It’s hard to do,” she said at the New England Direct Marketing Association’s annual conference last week in Waltham, MA. “It’s like saying ‘I need to switch you from being a Red Sox fan to a Yankees fan.'”
Making it even harder is the fact that much wireless phone advertising is confusing to the consumer, who often can’t fathom which offer is the best. To illustrate her point, she played a montage of television spots from various carriers. The offers – with price points ranging from 99 cents to $199 – came fast and furious.
Verizon Wireless spends more than any other single brand that advertises in the United States, close to $1 billion annually, said Goddard.
Indeed, the sheer volume of adverting Verizon Wireless has done is a bit staggering, according to the statistics Goddard shared: 47,079 print ads, 258 free standing inserts, 534 radio ads, 114 custom T.V. spots, 338 unique mail pieces (and 7,372 custom variations on those pieces), 102 banners and countless e-mail campaigns.
For Verizon Wireless, every communication is about generating response. The company lives and dies not by simple leads, but by sales every day.
The company’s marketing approach is to look closely at what is the most effective medium in each market. While newspaper ads might be heavy in the northeast, in Los Angeles – where everyone is in their car all the time – billboards are more important.
In the wireless phone world, consumers want to know the big numbers, such as how many minutes are in the plan, the price and the features of the phone offered. Verizon Wireless saw that stressing the reliability of their network was the way they could differentiate themselves.
This led to the well known “Can you hear me now?” campaign, which included regional taglines such as “Works in all 4 NYC tunnels.” Creative across different media and regions is integrated but not identical, an approach Goddard described as “unity, not uniformity.”
When judging return on investment, the carrier looks at spending and the conversion rate, as well as the cost of each media, said Goddard.
The purchase of AT&T Wireless by Cingular presented a challenge to Verizon, in that Verizon Wireless was no longer the largest cellular carrier. They knew that the new larger Cingular would not hesitate to promote itself as the widest network.
Verizon Wireless decided that it had to not only promote its network but also the whole Verizon experience.
The approach is working. Churn is below one percent, and in its major market, Verizon Wireless is at over 30% penetration. The company is also seeing that direct marketing communications are generating a 10% to 25% lift in response.
