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12/06/2007

Marketing Implications of an Open Verizon

Today's poorly reported USA Today article on AT&T "flinging open" its network (effective immediately) is a sign of the wireless times. The article/announcement/PR coup follows recent news from Verizon Wireless that it would both open its wireless network to "any app, any device" and that it would embrace Google's Android platform.

Google couldn't have hoped for more frenzied carrier responses to Android and the Open Handset Alliance.

Whatever the validity of AT&T's claims in USA Today, the Verizon announcement remains the more interesting and potentially transformative of the two. While the pundits are right to be cynical --predicting that this is either a ploy to conjure some goodwill before next month's 700 MHz auction, to gain an edge for the lonely CDMA standard or to simply dupe the market--Verizon's announcement is on record. They will have to do something to demonstrably change the way they do buisness and open the gates to their prized network.

From a marketer's perspective, there are 3 major implications and opportunities:

1. Verizon will need to become an endorser brand.

No more "Can you hear me now?" advertising, Verizon will need to extend its "network excellence" positioning as a driver market innovation. The challenge for Verizon will be to use its brand to endorse these innovations rather than trying to create them from scratch and own them outright.

VCAST's MTV/Rhapsody deal, while a little late, will be the shape of things to come. Like any good idea, timing is they major success factor. Verizon should bring back the MVNO model but with a stronger role for its brand in endorsing private label products and services. Some potential cost-savings here as Verizon can rely on partners to shoulder more of the marketing costs.

2. Fix (or kill) retail.

Verizon's retail experience is broken. Until now, this has not mattered because all the carriers have terrible retail experiences. However, if Verizon is going to send a clear signal to the market that they are offering something better nothing will be more important than retail. At the very least, they will need to devise a strategy for including a wider range of partners in their retail stores; effectively turning them into malls of products and services. If this is too much to pull off, Verizon should re-think its channel strategy entirely and enlist new channel partners who can do what is needed.

3. Let the market define itself.

Marketers all share a nervous tick: the need to constantly do enough research to draw an accurate picture of the market. If Verizon's marketers attempt to do this, they will drive themselves mad. Unlike the days of the 7 o'clock news, today's market is only what it says it is. Part of being open is being willing to give over control. This is as true for marketing as it is for anything else. Give people as much (or as little) choice as they want and let them create their own value props.


Additionally Verizon will need to address both its pricing model and its relationship with handset manufacturers. In the case pricing, things are going to have to become a lot simpler and more transparent (and cheaper too). In the second, Verizon will need to have its own line of private label (or semi-private label) devices based on innovative handsets. To do so it should look to build strong relationships with manufacturers a la AT&T's relationship with HTC. Seems like LG would make the most sense here.

December 6, 2007 in Branding, News, Telecom | Permalink

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