O2 resurgence is down to good PR

One of the most astonishing turnarounds in business in the last couple of years has been the loss of position by Orange and the resurgence of O2. Throughout the 1990s, Orange was the cool brand, and the network of choice among the young.

That positioning, so carefully built up by CEO Hans Snook, survived barely 12 months of French ownership before it began a ‘hard-nosed’ ad campaign which not only failed to appeal to its target business audience, but was a total switch-off to the existing customer base.

The contrast with O2 could not be more marked. What the soon to be ex-chairman David Varney inherited was Cellnet, which for most of its life had been owned by Securicor and British Telecom, and had been given the attention it deserved by neither. It was the brand to avoid.

Varney transformed this by the deft use of public relations. He changed the name to O2 – as in oxygen – and he hit lucky with a couple of sponsorships at Arsenal and with the England rugby team. But the rest was the projection of an image and the living of that image within the company. As Orange wobbled, he identified and began to espouse the values young people cared about – being open, transparent, fun to work for, treating its customers with integrity and admitting its mistakes. It even took the lead on environmental issues, such as the extraction of minerals for manufacture, said to be threatening the habitat of a rare species of gorilla.

It worked. Late last month Dutch company KPN made an approach to buy the business but was scared off by the high asking price – made possible by the success of PR. The Dutch may come back with a bigger cheque, but it is obvious they do not understand what they were trying to buy any more than the French did when they went for Orange. Their talk was all of consolidation, rationalisation and new technology. But customers want style as well as substance.

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