New Vodafone CMO takes fight to rivals in bid to break ‘monopolistic’ Australian market

Screen Shot 2015-05-28 at 1.11.30 PMNewly minted Vodafone marketing chief Loo Fun Chee has vowed to take the fight to Telstra and disrupt the “monopolistic” Australian market after insisting the telco has entered a new era of reliable service.

But Chee, who is five months into the role, admitted Vodafone still has work to do to convince a sceptical consumer that it has solved its network issues that dogged the company for so long.

In her first sit-down trade interview since taking over as CMO from Kim Clarke in January, Chee said she recognised not only the issues Vodafone had faced, and the challenges of rebuilding trust, but also the opportunities presented by a market dominated by one player.

She told Mumbrella consumers have effectively been “ripped off” with prices far more expensive than overseas territories.

Chee also flagged a continuing focus on digital marketing, an area which has increased “tremendously” over the past 12 months, with the company in the midst of reviewing its digital strategy. The appointment of a specialist digital agency has not been ruled out.

Creative agency Cummins & Partners and media agency Bohemia handle the digital work for Vodafone with the Present Company running its content-driven, non-paid social strategy.

Chee, who joined Vodafone from Philippines-based Globe Telecom, where she was head of consumer marketing, said the telco was “back to growth” after spending $3bn fixing its network issues.

“We have momentum, we can be bolder and we are very confident now about our network,” she said.

The Power to You marketing campaign launched last weekend, which promotes Vodafone’s 4G network and its partnerships with streaming businesses Stan and Spotify, illustrates such new-found optimism, Chee said.

Moving on

While internally Chee said Vodafone has “moved on” from the crisis, customers who left in droves may not feel so confident. The campaign, its first from Cummins, is designed to go some way to addressing such deep-rooted doubt, she said.

Chee said it signalled the beginning of a concerted push to sell its offers “to the world” after a period where Vodafone was simply unable to go to the market with any degree of confidence.

“Some of the projects we have not talked about above the line or in the media,” she explained. “At the beginning of the year we launched unlimited weekends, share plans and Stan and Spotify. But it’s only now that you are starting to see us talk about them.

“It was very important for us to make sure the product worked and it was important that the first people we talked to were our own customers, and when you do that you don’t use TV, you talk to them directly.

“We let our customers trial our products to make sure they were having a good experience and have then follow with communications.

“With unlimited data weekends and IDD (international calling) we were making sure that our network has enough room before we actually rolled it out. And we are constantly monitoring that our customers are having a good experience.”

Moving forward, Chee said TV will “always be relevant” as a way of reaching customers but, unsurprisingly, flagged digital marketing as an increasing focus.

“I can’t tell you the budget split but we have over-weighted on digital and increased that tremendously over the past year,” she said. “We are continually thinking about our digital strategy and it’s not just about paid and earned – but the full experience right up to fulfilment.

“We are looking at the full digital strategy and are looking at how we can be stronger in that area.”


Turning to the business turnaround which has occupied much of Vodafone’s time since 2013, Chee said it initially spent “a lot of time” talking to staff and inviting them to trial Stan and Spotify in a bid to restore faith internally. While that has been achieved the wider public will still need convincing, she said.

“Confidence has to come from the inside,” she said. “And now we are telling the world. But we do recognise that like or not there is still this network perception that customers have about Vodafone.

“Existing customers know it is working because they have been using it, but there are other consumer who have this lingering view of  ‘I thought they are no good’.

“Our Power to You campaign is solely to demonstrate to the customer that our 4G network is built for most things that customers are using it for, which is streaming.

“Customers watch a lot of movies and videos and listen to music and these activities are the ones that put a strain on any network. So for us to be able to demonstrate that you can use our network shows the confidence that we have.”

She added: “It [Vodafone’s issues] are behind us and we are moving forward and the fact we putting double data on top of that so that the customer has a better experience is demonstrating that our network is back and doing extremely well.”

In addition to rolling out the campaign to demonstrate the strength of the network, Chee said Vodafone is offering trials to consumers so they can test the robust nature of the network.


Chee declined to be drawn on Ogilvy’s controversial and much maligned Kidults advertising campaign that attempted to haul Vodafone off its knees in late 2013. It became one of the most complained about TV ads of the year and, if anything, set the brand further back.

“What I would say is that commercials are all very subjective and everyone from kids to mums had something to say about that commercial,” she said. “The reasons for doing it were right at the time but the main thing is that Vodafone listened and responded to their customers [and pulled the campaign].

“The ability to listen and understand the voice of the customer is critical.”

Vodafone lost two million customers at the height of its network meltdown, falling to fewer than five mission customers, and has crept back to around 5.3m.

Although work remains to be done to claw back lost customers, Chee said she was happy with the “quality” of its customers, pointing out that 40 per cent were born overseas.

Such customers are on “high value” plans, she said. That, coupled with the launch of its $5 per day roaming deal, has seen overseas data usage soar, she said.

“Australians travel a lot but we noticed half of them switch off their phones when overseas. But since we introduced $5 roaming we have seen a 650 per cent increase in data usage,” Chee said.

The launch of the roaming deal has been symptomatic of Vodafone’s approach of driving down prices, Malaysian-born Chee continued, as she described Telstra as holding a virtual monopoly in Australia.

Such a market dynamic inevitably leads to higher prices which Vodafone has been keen to address, she said.

“Even though Australia has multiple players it was clearly quite a monopolistic market where your biggest player has a disproportionate share of the marketplace. It is incredible,” Chee said. “On the other hand, customers are extremely savvy, handset penetration is high and they know what they are looking for.

Vodafone“I looked at that and thought here was a huge opportunity in terms of how Vodafone can play a stronger role.”

‘Ripped off’

The $5 roaming was one such example of innovation to provide better value, she said, a move Chee claimed forced competitors to slash their own prices.

“What we did was absolutely right to disrupt the marketplace,” she said. “Because we did that, they had no choice but to compete and they slashed prices by 80 per cent.

“I believe there is a great opportunity for Vodafone to be a true alternative in this marketplace.

“All our plans are starting to include IDD – international calling. And data was the other areas where I saw a huge opportunity for us. It was clearly something that our customers wanted and so for Vodafone this is a clear space that we can play a big role in.”

Chee went so far as to say Australian consumers have been “ripped off” in the past, and said commentators are wrong to have branded recent data offers from the telcos as “crazy” – and Vodafone’s “the craziest of all”.

“In a way, when you compare it to different markets this is not crazy. It is fair value,” she said. “For a long time the Australian consumer has been, to be honest, ripped off.

“It’s about giving what is a fair value to the customer and it’s difficult when you are in a close-to-monopolistic position because they can do anything and customers will stay. By showing our network is up and going really we are saying there is true choice for the customer.

“For a long time the Australian market has been paying a huge premium given the structure of the market so when you look at the prices now this is really fair value for the customer.”

The Power to You campaign strapline also plays on that dynamic, Chee said, explaining how there can often be a “fear” of moving away from such a strong and dominant market leader.

“There is a feeling that ‘I know I am paying a premium but I had better stick with it’, because of the fear of not having sufficient coverage,” she said. “So we want to give the consumer power of choice and provide them with an alternative”.

‘The telco playbook’

Chee said Vodafone was also making a bid to simplify its messaging after agreeing that telco marketing can be complex and confusing. She added that data will remain a key battleground in Australia, just as it is across the globe.

“The telco playbook is the same everywhere,” she said. “If you look at different markets, content and data is a strong play. The difference is who executes it well.”

Returning to the business turnaround, Chee said the answer to Vodafone’s woes was, to some extent, relatively simple. Rebuild the network and listen to the customer.

“Based on what I have seen, it was clearly the network that was the problem but also the mindset of the organisation of how we approached the customer,” she said.

“But we have flipped that round. In order for the company to survive and take it forward we really need to focus on the customer and that is what every company says, right?

“It is the very fundamental of doing business.”

Steve Jones

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