ANALYSIS: BRAND BUILDING; BT gives its answer to a question of ethics

Any company worth its salt knows that ethics are the latest consumer

‘want’ and BT is no exception. It is now communicating its caring face

by committing itself to a social audit

When chirpy cockney Bob Hoskins - or his stand-in Rory McGrath - tells

us ‘It’s Good to Talk’ we lend him our ears. Following BT’s ad campaign,

the average person spends 77 seconds a day longer on the phone. And now

it seems BT is after our hearts and minds as well.

Last week BT emerged as the first mainstream UK business to commit

itself to a social audit, which the company claims will give an

independent assessment of how it treats staff, customers and other

‘stakeholder’ groups. How should we receive such news? Is it a genuine

attempt to behave more responsibly or merely a cynical attempt by a

near-monopoly to jump on the ‘ethical’ bandwagon?

Interestingly BT chairman Sir Iain Vallance admitted that the rationale

was ‘not from altruistic motives’ but that it makes ‘sound business

sense’ to improve its reputation in the tough telecoms market.

Director of corporate relations Ian Ash says regular BT customer

research stimulated the move: ‘Previously customers were mainly

concerned with price and delivery, but over the past five years there

has been growing concern about ethics.’ He also says a key factor was

the ‘stakeholder’ theory expounded by the book Tomorrow’s Company.

Could BT really be the first large company to follow the example of The

Body Shop and the Co-Op in making ethics a central business tenet?

Roger Cowe, business journalist on the Guardian with a special interest

in ethical and social issues, believes the initiative is more than just

window dressing. ‘It’s the culmination of a process that goes back to

privatisation, looking at reputation and particularly customer service.

This is a formalisation of Vallance’s argument that in a commodity

business the only way to improve sales is by reputation,’ he says.

He adds: ‘One is right to be cynical but the proof of the pudding is an

independent report and this is what BT’s offering. Other companies are

likely to follow suit.’

There is certainly evidence that BT has undergone a significant

transformation in becoming more customer-facing. A decade ago, after

privatisation, it was associated with broken telephone boxes and poor

service. But in November this year BT took home the Grand Prix at the

IPA Advertising Effectiveness Awards for its ‘Good to Talk’ campaign.

And last week emerged as the UK’s strongest brand in Marketing’s brand

equity survey.

As for community relations, Ash says BT ‘puts back’ pounds 50 million

through Business in the Community, as well as charity projects including

Childline and the Samaritans.

He also refers to its ‘good shape’ on environment issues: ‘For the past

two years our environmental report has been audited externally. We’ve

found this empowering as people award it more attention and credibility.

This is one of the reasons we’re now considering extending this work to

broader social responsibility.’

Sally Costerton, managing director of the Abacus agency, is more

sceptical: ‘I’m right behind them in principle. A good reputation is a

strong asset, but what does it actually do for me, the consumer?’

Costerton believes Sir Iain Vallance’s statements are fine for a

sophisticated marketing audience but the relationship with customers is

more basic: ‘He may be going too far in admitting there is no sense of

altruism. BT still has the problem of consumers asking what happens to

its huge profits as a near-monopoly.’

Indeed one could ask why a company with 90 per cent of domestic users

connected to its services even need worry about its reputation. Has the

customer any real choice?

But Ash prefers the term market leader to monopoly: ‘Two thirds of

people now have alternatives,’ he says, ‘And even if we aren’t losing

market share, the regulator will ensure we do, so we need to grow the

market in new areas.’

But wouldn’t the proposed merger with MCI strengthen its position

further? ‘If we’re going into new markets, our reputation becomes even

more important and our set of values needs to be right from the long

term point of view,’ Ash replies.

He says it is early days and the extent of the work means an audited

social statement is unlikely to be produced until at least 1998.

Meanwhile BT will concentrate on existing policies, involving the whole

company and with ‘more focus’.

Adrian Hodges, head of corporate communications at The Body Shop

declined to comment on BT specifically but fails to agree with the

implications behind Sir Iain Vallance’s statement: that altruism, and

success through reputation, are mutually exclusive. Hodges says: ‘It’s

exciting that more and more businesses are undertaking social and

ethical audits, but we see them as an intrinsic part of running our

business well, not as a marketing policy.’ He adds: ‘It needs willpower

and dedication to follow through the findings of the audit.’

The PR industry may welcome the social audit as an admirable and

inspired move by the telecoms giant, but can BT now put its money where

its mouthpiece is?

Ringing the changes for BT’s PR

1984 Reorganises following privatisation

1991 Spends a reported pounds 50 million on a new corporate identity

1992 Launches Putting Customers on the Agenda - a book about its face-to

face customer communication strategy

1993 Group managing director, Michael Hepher affirms strategic

commitment to public relations at board level in PR Week

1994 Appoints Burson-Marsteller to back its ‘It’s good to talk’ campaign

1995 Lobbying to free up telecoms market throughout EU finally pays off

1996 Announces total ethical audit