How Virgin manages to stand out from the crowd in the cluttered and cut-throat quad-play sector
Meadhbh Quinn of Virgin Media tells John McGee how a lack of emotional resonance in the UPC brand sealed its fate
In the cut-throat market for phone, TV and broadband services in Ireland, standing out from your competition is crucial. With four main players all slogging it for a slice of a pie that is worth in excess of €3bn a year, the ability to deliver quality services that people want, good customer experiences, as well as innovation, can make all the difference to the bottom line.
It's a tough battle, but one that's worth fighting, says Meadhbh Quinn, head of brand and marketing with Virgin Media, which is owned by the telecommunications giant Liberty Global.
"There is a real pressure on us to ensure that what we go to the market with is different to what our competitors are doing and that what we are offering is compelling from a customer's perspective," she says.
Known as UPC up until October 2015 (and NTL before that), Virgin Media has a reach into households in the areas it serves with 311,000 pay-TV as well as 371,000 broadband subscribers. In addition, another 365,000 are landline subscribers, while it has also managed to persuade over 10,000 existing customers to take up its recently launched mobile phone offering.
The competitive challenges in the marketplace in recent years, however, was accompanied by an erosion in its pay-TV subscriber base. In addition, the company struggled to shake off what Quinn says was the "functional utility" image UPC had amongst fickle customers. With the competition nibbling away at its market share, it ultimately led to a decision to rebrand and reposition the company as a "disrupter".
"UPC had a good offering, but in the minds of the consumer, it was a utility company and it was hard to detect any emotional resonance in it. We looked at what was going on in the UK, where Liberty had bought Virgin Media, and it was clear that there was an opportunity to bring the Virgin brand to Ireland. We did quite a bit of research and customers really liked the idea of the disruptive, challenger and innovative nature of the Virgin brand.
"But it also set us challenges in terms of how we think and act and how we can innovate in a cluttered market. It almost demands that we think differently," she says.
"From the outside looking in, the industry can look somewhat commoditised, so it's important that we innovate and challenge ourselves all the time," she adds.
While it trails Sky in the pay-TV market here - Sky has over 700,000 customers - it is also being chased by the likes of eir and Vodafone, the other two companies operating in the so-called 'quad-play' space.
"Within our footprint, we've got over 750,000 homes, which is about half the household population in Ireland, and we would dominate the broadband, home phone and TV service within that footprint we service. But we are always conscious of what the competition is up to and it's up to us to ensure that we differentiate ourselves from them," she says. "Sometimes it's not always about out-spending your rivals, it's also about out-smarting them, and we would like to think that we are good at this."
In terms of its strengths, Quinn says Virgin Media currently has the fastest home broadband on the market - and this is an important consideration for many households, where multiple devices could be online at any one time.
"We see broadband as being essential to people's lives and, given the atomised nature of content consumption habits in many households, there is a need for speed. So, we've been focusing on areas like Wi-Fi and trying to improve the overall experience of Wi-Fi around the home and ensuring that it delivers on customers' expectations. Our broadband is also one of the big differentiators between us and our competitors," she says.
So far this year, one of the big successes the company has met with has been the introduction of a mobile service for its customers. Essentially an MVNO using Three Mobile's network, Virgin Mobile now has over 10,000 customers, and the offering will be expanded later this year to include the retail network.
"We've been targeting our existing customer base with what we think are very generous offers that are half the price of our rivals. At the moment, it's a SIM-only offering but over the coming months we will be stepping this up with the introduction of a full range of handsets which can be bought online, from Carphone Warehouse or one of our franchised outlets around the country," says Quinn.
"It's still early days for Virgin Mobile but we are happy with the way it's going and there is considerable scope to develop this into a sizeable business over the next few years," she says.
Arguably the biggest challenge facing all of the companies operating in the market, lies in their poor track-record, perceived or otherwise, when it comes to customer service and customer experience. For most people, dealing with the customer service department of a utility provider often ends up as a frustrating and pointless experience. In the age of the so-called "prosumer," one good experience can build a fanbase, one bad experience is likely to be shared with anyone who will listen.
"Unfortunately, the industry is not renowned for the quality of customer service and customer experience," admits Quinn. "But it's something that we're always actively looking at because it's becoming more of a differentiator in markets where there is a lot of competition. Overall, I think the industry is getting better, and that can only be good for customers."
Sunday Indo Business