It wasn’t too long ago that Spark was a company to be railed against; a monopolistic monolith using confusion as a marketing tactic to suck money out of consumers. One Spark staffer tells of a focus group attendee from South Auckland before the rebrand saying that if an 027 number came up on their phone they knew it was either telemarketers or debt collectors so they’d just ignore it, which is a good indication of the level of disdain for the brand in that part of the country. But since then, there’s been a lot more openness from those inside the company and a lot more love shown by consumers, and this change in approach manifested itself in the Be Counted campaign, which was created by Touchcast and managed to get over 50,000 New Zealanders interested in regulatory process.
Spark’s head of public affairs Conor Roberts says because Chorus has a monopoly, the Commerce Commission sets what it can charge all service providers to connect their phone and internet customers to the network (while Ultra Fast Broadband is on the rise and there are now more services available for consumers to actually make use of it, approximately 95 percent of New Zealand broadband and landline connections are still on the copper network). And it’s set to release an interim decision in June with the final determination out in December.
“This is important because Chorus charges are the largest component of a customer’s bill, making up around half of the cost of each line, so any changes have a large impact on what people pay.” In February this year Spark put up most plans by $4, and other internet service providers followed suit on the back of the Commerce Commission’s decision in December to increase Chorus access charges by around $5.
The complex regulatory process for setting these charges has been ticking along for a few years now, but Roberts says Spark felt that the voice of the customer was absent from the debate.
“This campaign was a bit different for us. Spark New Zealand’s history has been to fight its regulatory and lobbying battles behind closed doors, especially back in Telecom days.”
But nothing gets customers riled up like price hikes, and, just as media coverage tends to get results, the power of an angry mob—or, as some call it, slacktivism—can too. So it launched a campaign to highlight the fact that the Commission’s proposed wholesale charges are up to 80 percent higher than the median of comparable countries, which is approximately $180 per connection per year, and asked punters to send a message saying they weren’t happy about it.
The value in broadband plans has improved enormously in the last few years. Consumers are getting more data and faster speeds at lower prices, and a big reason for that is increased competition, something that’s also evident in mobile and streaming services. According to Spark, what you get in a basic broadband plan today for $79 (phone and 40Gb data) would have cost $105 in December 2012, $129 five years ago, over $700 per month in 2005, and over $13,500 per month in 1999. Internet users can also get a $99 Unlimited data plan (or even cheaper unlimited plans from other providers), which was not even available when the Commission started the price setting process.
Given the extra value, some customers probably won’t mind a slight price increase. But Spark chief executive Simon Moutter said in a release that the Commerce Commission “needs to justify why higher internet charges are in the best interests of consumers”.
In keeping with Spark’s new marketing approach, the campaign was fully digital and featured a mix of digital marketing, social media engagement, electronic direct mail and public relations.
“This meant we were able to directly target our message to those people we felt would be most interested in the issue and likely to provide a submission, or who we wanted to reach as part of the general information campaign,” says Roberts.
He says going out to the public on this issue presented Spark with a number of risks: the campaign might be misunderstood, with people confusing a message about increases in charges as something Spark was pushing for; given its shared history with Chorus, it could have reflected badly on its brand; and there could have been cynicism about its motives, because wholesale price increases don’t just impact on consumers, they also impact on margins.
But he says the campaign, which was modelled on similar consumer-focused regulatory efforts such as Uber’s recent appeal for public support around transport regulations (Generation Zero’s SkyPath submission was also along similar galvanising lines), has paid off, driving awareness of the make-up of customer charges, putting Spark firmly on the side of its customers by showing it’s committed to giving them more value, and driving click-throughs to the website and submissions to ComCom.
“It’s fair to say we are extremely pleased with how the campaign has gone so far. We believe it has resulted in the largest number of submissions on a Commerce Commission regulatory process that has been seen in New Zealand, which means the voice of the customer has been heard loud and clear by those who will ultimately be making decisions about how much they pay for their broadband. Whether they listen is another story.”