When telcos change their clothes: comparing Telecom and Vodafone's rebrands

  • Brand
  • August 7, 2014
  • Damien Venuto
When telcos change their clothes: comparing Telecom and Vodafone's rebrands

As Telecom poises to jettison its three-syllable moniker for the punchier Spark title, it's worth looking at Vodafone's 1998 rebrand that saw the company change its nationwide identity almost overnight, a move that is today considered by some as one of the best examples of rebranding in the nation's history.

The circumstances leading up to the respective rebrands of the two companies couldn't be more different. Today, Telecom has made the decision to rebrand entirely of its own volition in order freshen up its brand. But 16 years ago, Vodafone bought out Bellsouth in New Zealand, leaving the company with a tricky choice: rebrand all the stores in New Zealand, thereby losing brand awareness; or sacrifice multi-national uniformity by keeping a brand that Kiwis already recognised.

"Before it announced the deal, Vodafone toyed with the idea of retaining the BellSouth name in some way," said the Herald's Karen Sherer in an article published in 1999. The reason for this was because the Vodafone name was relatively unknown in the country. At the time of the rebrand, a survey showed that only two percent of Kiwis had ever heard of Vodafone, and this placed the the company in a very precarious position."

However, the public were quite accepting of the change, which did, after all, make sense for Vodafone given that it had spent around $750 million on the acquisition.

Comparatively, Telecom doesn't have as clear-cut a rationale underpinning its decision to rebrand. It thus comes as little surprise that the company made the decision to announce the change well in advance. Not only has this given Telecom a means by which retain brand awareness, it has also given the company time to weather the news and social media outrage before taking on the new name.     

Rather predictably, in the aftermath of the announcement that Telecom would be spending $20 million to rebrand as Spark, many voiced their incredulity on account of the fact that the money could've been better spent elsewhere. As chief operating officer Jason Paris explains, Telecom acted swiftly in order to reassure the public that this was more than a simple name change.    

“All of us were straight in there having a conversation with customers and listening to people who were a bit pissed off about it,” said Paris in an article published in the May/June edition of NZ Marketing. “We were just upfront and said ‘we understand how you feel, but this is our view on it. Hopefully we can prove you wrong over time and we are listening to you.’”

Vodafone similarly had to convince the public that a name change wasn't necessarily a bad thing, and did so with a tongue-in-cheek campaign, via then-creative agency Ammirati Puris Lintas, that played on famous name changes throughout history (Ammirati Puris Lintas was formed after a merger between Pearson Davis and Interpublic-owned Lintas, and international restructuring would later see the agency become Lowe New Zealand).

Dubbed ‘Great things happen when you change your name’, the campaign used examples of celebrities who had adopted stage names instead of using their birth monikers. In addition to featuring spots referencing Elton John and Marilyn Monroe, the campaign also depicted a still image of John Wayne shooting his slightly more effeminate original name, Marion Morrison.

When Vodafone rebranded, the mobile phone market looked quite different from how it does today. At the time of the acquisition, BellSouth had only 138,000 customers, and this made it easier for Vodafone to wrap the brand in some new red robes.

"The rebrand of every aspect (retail, signage, bills etc) was all done over a single weekend," says Vodafone spokesperson Michelle Baguley. Admittedly the company was much smaller than Telecom is now, but it was still a mammoth—and expensive—task to have absolutely every element rebranded over a weekend, including all of the franchise stores throughout New Zealand.

As rebrands go, this was the equivalent of on-stage wardrobe change by a magician. And the seamlessness of this update is still applauded as a great example of a business changing its identity in a market.      

Although impressive in terms of its speed, it is unlikely that Vodafone would be able to pull off a similar change in today's market. The company now has over 2.3 million customers nationwide and brands connect with their customers in many more ways now. Similarly, Telecom has over 1.5 million customers, which further explains why the company has taken the 'slow and steady' approach to its rebrand, starting first with a logo update, following this with the announcement of the new name and soon unveiling the whole new look.

Another aspect that is applauded in the Vodafone rebrand is also a key point of difference from Telecom's. As part of its rebrand efforts, and in an attempt to bring the red banner closer to the Kiwi public, Vodafone initiated a large stable of high-profile sports sponsorships. Deals included the original four-year contract with the Warriors; naming rights to the Silver Ferns, the Wellington Lions and the Dragon Boat Festival; and sponsorship of the Otago NPC team and the Canterbury Rugby Union First XV. 2000 Olympic hopefuls Sarah Ulmer and Hamish Carter, and what is now known as the Heineken Tennis Open (there were also deals struck with Variety Club Bash, the Hero Parade, and Auckland University's Summer Shakespeare and Auckland Museum).

In contrast, Telecom last year pulled the plug on its sponsorship agreement with the All Blacks due to frustration caused by a lack of exposure.

“For Telecom, the All Blacks sponsorship didn’t work,” said Kellie Nathan, the former general manager of Telecom at the time. “We didn’t feature strongly enough in our tracking as an All Blacks sponsor to get the attribution we needed to justify the investment. There are so many others involved who have done a lot of work to build up a presence. So rather than be one of many, we said let’s own something and develop it from the grassroots up.”

In place of the All Blacks sponsorship, Telecom has attempted to find clear air, so it has tried to find areas where youth are over-represented and is focusing on niche sports with big followings, like basketball. Further to this goal, the company has recently been involved with several digital-themed events, including Cut and Paste's Live Design and Digital Nationz.

Such steps indicate that Telecom is starting to undertake a major transformation of its corporate affairs, which extends beyond a simple name change. And if the company really intends to convince the public that this is more than a simple substitution of one name for another, it will find additional ways to show this.       

As Baguley says when talking about the success of Vodafone's rebrand: "A true rebrand must be backed up by an actual change – more than just a new logo – one which leads to a clear internal behaviour shift and is embraced across the entire company. It requires a consistent approach, attention to details and a fair amount of budget. Customers must see and feel that everything is different and better than before."

And should Telecom achieve this, then they'll be hoping its rebrand will be used as a new reference point 16 years from now.   

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