Having already established a strong foothold in the personal consumer market, 2degrees has now set its sights on business clients with an online and outdoor campaign via new account holders Special Group.
“The campaign … is about lifting awareness of our business offering among New Zealand business customers,” says the 2degrees chief marketing officer Malcolm Phillipps.
In terms of outdoor execution, Special Group's first major campaign for the mobile service provider consists of a series of billboards that feature the faces of Kiwi business owners Al Brown (Depot, Federal Deli, Best Ugly Bagels), Geoff Ross (42Below founder, Moa, Ecoya, Trilogy), Dion Nash (Triumph & Disaster) and fashion designer Kate Sylvester.
The outdoor advertising is designed to pique interest and encourage the target market to visit the 2degrees website, where there is a collection of 12 case studies on businesses that have recently switched to the network.
“We’ve made significant headway over the past two years, winning large scale clients like The University of Waikato, so the challenge now is to make sure we are top of mind when all business owners are evaluating their next step in the mobile space,” says Phillipps.
The 2degrees chief marketing officer adds that the network also holds the Victoria University and Summerset Homes accounts, and he believes that other business owners could be drawn to 2degrees’ offering.
In addition to these wins, the company has also been sitting above the one million-customer threshold since August 2012.
However, as discussed in a Herald article published in April last year, these numbers don't necessarily translate into high margins.
At the time of publication, the Herald’s article found that 2degrees’ 21 percent share of the market only resulted in a 12 percent revenue contribution, which in turn indicates that the company has a disproportionate number of low-value customers.
The reason for this lower profit margin has been attributed to that fact that 2degrees has thus far struggled to attract larger businesses to push up its ARPU (average revenue per user) statistics.
A Covec report released on behalf of 2degrees in November last year found that while 2degrees had successfully entered the market it was yet to make significant headway in the large enterprise or government segment.
“2degrees has effectively disrupted the pre-pay segment of retail mobile markets since launching in 2009, but is yet to make a material impact on the more valuable post-pay consumer and business segments. It has not yet entered the corporate market segment in any material way,” said authors Aaron Schiff, John Small and Emma Lanigan when commenting on the current state of the market.
Although the Covec report dealt specifically with the potential acquisition of spectrum rights in the 700MHz band by either Vodafone or Telecom, comments such as these provide relevant insights regarding the nature of mobile competition in the New Zealand market.
In another statement, the report comments on the need for the mobile company to be competitive across the board.
“As a matter of commercial reality the relatively small size of the New Zealand market dictates that an individual network needs to contest all customer segments in order to gain sufficient scale to be a viable competitor,” says the report.
But the other two players in the mobile industry aren’t simply going to relinquish their hold on the business market.
In October, Vodafone dug in its heels by launching the ‘mobility’ TVC, which still continues to receive airtime.
The business section of the Vodafone website also seems to be playing to the service provider’s strengths by focusing on its landline-based office packages (something which 2degrees doesn’t offer).
Once users click on one of the packages, they can customise the features and then receive an instant quote based on selections made. This user-friendly approach not only provides an instant price guideline but also allows prospective customers to gauge how much they can save by switching.
Similar movement can also be seen with Telecom, which, in addition to announcing a name change, recently launched a TVC that emphasises the speed of its range of services.
And the Telecom banner is also being flown on YouTube, where a recently uploaded seven-minute video elaborates on all the changes – personal and business – the company is incorporating.