How Vonage's CMO shifted its marketing strategy to reach consumers in new ways

Vonage’s Ted Gilvar speaks to Lindsay Stein about the brand’s shift in its marketing strategy and plans to reach consumers in new, engaging ways

How Vonage's CMO shifted its marketing strategy to reach consumers in new ways

How are marketing and communications structured at Vonage?
The way we have it structured is the same as my last job [at Monster], where PR and corporate comms report into marketing and social sits within the communications team. 

It works a lot better when everything is connected and under one roof. Earned and social media are more important than paid media and, as we are embarking on new work, I want to make sure everything is
really integrated.

You joined the company in April. What made you decide to move to Vonage?
It’s a unique time at the organization. We’re transitioning from having strong brand awareness and heritage within the consumer business and migrating that toward the business audience. We’re transforming from someone who used cloud communications to reinvent the home phone and international market to attacking the fast-growing business segment.

Are you moving away from the consumer business then?
Absolutely not. The business side of the market is fast growing as companies of all sizes move to the cloud. The consumer side is key to our success as well, so we’re continuing to support the areas we’re in and we have some new product developments in mobile to bring more features and functionality to that space.

Any consumer campaigns coming up?
We have individual efforts against different businesses. We have some work supporting our international market and some for our domestic phone market. We will continue to do more work to drive that success.

What’s the best strategy to engage business audiences?
We have great brand awareness, so we start from a good place. The challenge is making sure they understand that our cloud comms and strong tech base means we can deliver products and services that meet the needs of businesses. We’re working on an integrated campaign that will address the business audience. It will be across traditional advertising, PR, and all forms of communications.

In the last 18 months, we’ve accelerated that business by about 50%, acquired three companies, and brought them under the Vonage umbrella. The job now is to continue to accelerate it.

Recent articles talk about the drop in Vonage’s subscribers. What are the most up-to-date numbers associated with these losses?
We have made a conscious effort to focus on acquiring customers that have a greater lifetime value. We’ve made a shift in our marketing approach and efficiency to improve the quality of customers we acquire, driving lower churn [subscriber loss], and generating increased profitability for the business. This has resulted in fewer, but more profitable customers, which was expected.

We have also made the decision to reallocate marketing dollars to business services as we continue to invest for growth in business markets. That approach is working. EBITDA for Q1 2015 were $38 million, the highest in 13 quarters. Account churn for the quarter was 2.4%, down from 2.6% for the same period
last year. We also see an opportunity to cross sell our residential and business products.

How will Vonage keep more subscribers from jumping ship?
We’ve accelerated the introduction of new products. Recent developments include customers’ ability to use their home phone plan to make and receive calls on smartphones anywhere there is Wi-Fi or data with the Vonage extensions app. More than half of our subscriber base has downloaded the app.

We also launched selective call block, a feature that allows customers to block unwanted calls to their home numbers in real time.

What are your goals for the rest of the year?
We want to sharpen the meaning behind the Vonage brand. We have a proud history of breaking down barriers, being disruptive, and finding a better way for people to communicate. I want to bring some of that disruption back with the way we communicate.

 We want to find new and interesting ways to connect with consumers where they’re consuming content, whether on social or mobile. We have to be more engaging and create some affinity for consumers to choose us against the sea of competitors we’re up against.

How did your previous experience at Monster and at agencies ready you for Vonage?
Monster and Vonage are both Internet-based technology businesses that apply tech to drive value for consumers. Both have b-to-b and b-to-c components. I spent the last six and a half years [at Monster] thinking about both audiences and making sure we’re successful in each, so that’s helpful at Vonage.

My agency time [most recently at BBDO] taught me about understanding consumer needs and finding creative ways to connect with people. Ultimately, any marketing is successful if you stand out from the competition and make true connections with customers.

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