Carriers lament consumer confusion, Brand management and marketing new keys to telecom success

Despite carriers' pitched publicity battles, a new survey shows that end users are no better informed about their telecom choices. In fact, recent publicity about megamergers and new technologies has caused even more perplexity.

Indeed, consumers are more confused and less educated about market offerings than ever before, say researchers at Framingham, Mass.-based International Data Corp. "What we concluded is that trying to sell the wrong services to the wrong household is a waste of time," says Iain Gillott, IDC's director of wireless and broadband networking who was responsible for the survey of 4900 U.S. households.

The survey, conducted in March and April, analyzed the communications services that the households use, customer satisfaction and customer awareness of and affinity for specific telecom brands.

As the industry moves from being technology-driven to being market-driven, presenting the corporate message in the right way to the right audiences has emerged as a new competitive imperative.

"When everybody is able to do the same thing, the only difference between them will be the nature of the brand and the style in which they bring things to market," said Allan Brew, a partner with San Francisco-based design firm Addison, Seefeld, & Brew. "Pricing and product bundling will be fairly similar, so the only thing left will be brand positioning. It's all style and perceptions.

In conducting what it calls its cluster analysis, IDC came up with nine groups of households ranging from the "basics," who use only local and long-distance services, to the "road runners," who use a variety of electronic communications devices wherever they go. The bundles of services each group wants to buy were then matched with who they wanted to buy them from.

As evidence of the confusion surrounding branding, industry insiders frequently say that loyalty to AT&T is dying out quickly. But a recent Economist poll showed that more than 30% of consumers named AT&T as their local phone service provider more than a decade after its breakup.

The IDC/Link survey attempted to clear up the matter. "AT&T does very well [as a brand], and the [Bell regional holding companies] do very well in their own territories," Gillott said. "Sprint and MCI do well in certain demographic groups but do not do well overall." However, 9% of consumers were unaware that they had long-distance service.

"It's utter confusion," Gillott said. "We in the industry assume that everyone understands what's happening, and we've got people who don't know they make long-distance phone calls.

As evidence, AT&T and SBC - the subjects of rumored and short-lived merger talks - share nothing in the public's opinion.

Another finding indicates that consumer electronics brands such as RCA, Sony and Motorola appear to have strong market power even with respect to telecom services.

"There are a lot of people out there who are very willing to buy telecom services from people like RCA or Sony," Gillott said. "There is a lot to be said for someone like AT&T partnering with a Sony or someone like that.

"It is my impression that our members would have interest in aligning themselves with a quality household name such as Sony," said James Smith, president of the Washington-based Competitive Telecommunications Association.

Consumers also showed a great willingness to buy telecom services from local gas and electric utilities, the survey revealed.

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