EXTREME MAKEOVER

No one was more surprised than Alltel CEO Scott Ford when a J.D. Power & Associates survey published last July ranked his company seventh in terms of wireless network quality while Verizon Wireless topped the list. What Ford found most peculiar about those results was that Alltel and Verizon share their networks through a nationwide roaming agreement.

“It's the exact same network,” Ford told investors at the Smith Barney Citigroup conference in January. Actually, he's overstating it somewhat. Alltel customers use Alltel's network most of the time, and Verizon customers use Verizon's network most of the time. But the discrepancy between the two rankings (Verizon scored a 104, Alltel a 93) didn't add up to Ford.

Alltel hired a team of Ph.D.s to exterminate the bugs in its network, measuring not only the standard metrics of blocks and drops but also static levels and other criteria. They couldn't find the problem.

“We determined that — guess what? — it's not in the network,” Ford said. “Then we hired Ph.D.s to come and look inside people's brains. We had to change the way we talk about our network.”

Alltel's conclusion was that a perception problem was to blame, so it hired an advertising firm it had never worked with before to re-engineer its image. Specifically, Alltel hired the Chicago office of DDB, the advertising firm that created “Dude, you're getting a Dell” and bears the blame, along with Anheuser-Busch, for the “Whassup!” deluge of 2001. With DDB, Alltel decided its previous ads were too focused on price, plans and product features to forge a personal emotional connection among consumers.

“An old ad would simply be the price and where to call us,” said Alltel executive vice president of marketing Phillip Junker. (He, too, is overstating it somewhat. One example of an ad from Alltel's previous “minutes” campaign detailed the cell phone use of a young couple about to be married. They use 10 minutes to call the florist, five minutes to cancel the band, etc. “How will you use your minutes?” the ad asked.) Alltel and DDB designed its new campaign to forge a personal bond with consumers, and it appears to be working.

“Basically it was a move from an intellectual conversation to an emotional conversation, which struck me as ridiculous,” Ford said. “Why would you do that? Then I started thinking about the other people in my life and how successful I am when I'm talking to their heads versus their heart.”

In May, Alltel launched a new brand campaign centered around “making things right” for customers, a promise encapsulated in the tag line, “You got that right.” The ads all give a voice to wireless customers frustrated with the common shortcomings of the industry. In one TV spot, a fictitious wireless company is filming a commercial featuring a fictitious (and presumably high-priced) boy band. A wireless customer in the wings mutters, “Why don't they just spend the money on making my phone work better?” Alltel responds with a disembodied voice, “Do we think alike or what?”

To those who remember Alltel's previous campaign, which featured country singer Faith Hill, the anti-celebrity-spokesperson dig might seem like hypocrisy or back-pedaling. To Alltel, it was an unabashed about-face.

“In a way, that was meant to send a signal not only to the public but to Alltel's employees that they're not going to do business as usual anymore,” said Paul Tilley, senior vice president and group creative director for DDB Chicago, the man who oversees all creative development for Alltel advertising. With regard to Faith Hill, he said, “Scott Ford told me directly, ‘We'll never go back to that kind of stuff. We've learned that there's more value in being smaller and humbler and investing the money where it matters to our customers.’”

(T-Mobile's spokesperson Katherine Zeta Jones did not reply to dozens of calls — and personal, heartfelt letters — seeking comment.)

Alltel's tactic appears to be working well already. The carrier's gross subscriber additions in the third quarter (the first full quarter after the launch of the new campaign) jumped nearly 7% sequentially to nearly 700,000 customers — the highest in its history. And the numbers held solid in the fourth quarter at about 697,000.

Analysts say it's tough to determine how much of those numbers are attributable to the new ad campaign, but Alltel's Junker is convinced the ads made all the difference. Junker conducted benchmark brand perception surveys before and after the campaign was launched, and saw marked increases in Alltel's brand awareness among consumers and in the fraction of respondents who said they'd consider becoming an Alltel customer.

The onset of local number portability last year may have nudged wireless carriers throughout the industry to brush up their brands, though few of them will admit it. Cingular Wireless puts the topic front and center, touting portable numbers in ads featuring Tommy Tutone's 1982 hit “Jenny (867-5309).” AT&T Wireless, however, denies that portability played a big part in the new campaign it launched last October.

Like Alltel, AT&T Wireless switched from a focus on features (in its mLife campaign) to a focus on feelings. And like Alltel, it solicited an ad firm it had never worked with before to make the transition — Goodby Silverstein, which is best known for its ubiquitous “Got Milk” series for California Milk Processors. Ironically, the new tag line Goodby Silverstein created for AT&T Wireless was one the carrier had already owned since 1979.

Its new “Reach out” campaign — meant to evoke the classic, tear-jerking “Reach out and touch someone” long-distance ads of 1979 — took Alltel's emphasis on emotions to the extreme in a clear vote for drama over comedy.

But although the smaller print of the tag line, “…on the wireless service America trusts,” seeks to differentiate the carrier on the grounds of its reliable name, critics say the emotional focus of the ads — the value of interpersonal communication — is one that promotes all carriers, not just AT&T Wireless.

“If you don't have a lot to say, you sell the category,” Tilley said. “Let AT&T sell the category. [Consumers] still have to make a decision about who they trust.”

That characterization of AT&T Wireless was echoed by Cincinnati Bell CEO Jack Cassidy in his company's third-quarter 2003 earnings call. Though 20% of the company's wireless business is owned by AT&T Wireless, Cincinnati Bell handles its own marketing, largely due to differences in the two firms' advertising philosophies. “I'm not into advertising the category,” Cassidy said. “I'm interested in telling customers, ‘Why me?’”

Mark Siegel, vice president of national brand and marketing media relations for AT&T Wireless, said the new campaign is performing well but that it's too soon to quantify its effectiveness.

Though tugging at heartstrings can leave a lasting impression, overly dramatic ads run the risk of being parodied by competitors that use humor as their weapon of choice. For example, Alltel takes a swipe at competitors' claims of integrity in another new ad seemingly aimed at lampooning the high-visibility ads Tommy Lee Jones intoned for SBC. In the Alltel ad, an austere phone company worker atop a telephone pole rambles on about the spirit of commitment to which the company is dedicated without really saying anything. Eventually he describes the company's virtues, risibly, as “a spirit, a commitment-a spir-mitment!”

With its irreverent, tongue-in-cheek style, Alltel seems to be veering more into branding territory well traveled by Verizon Wireless — whose “Can you hear me now?” ads may be the industry's most successful — and Sprint, whose trench-coated spokesman personifies a contrarian alternative to the status quo. Both campaigns use humor to spotlight differentiating features (in Sprint's case, recent ads showcase its earlier “evening” rates). But by now the differentiating power of the Sprint tag line has gone stale, according to Yankee Group analyst Roger Entner, who otherwise admires the trench coat man but thinks Sprint could benefit from an Alltel-style makeover. “‘The clear alternative to cellular?’ There is no more cellular,” Entner said. “PCS and cellular are the same now. You won. Wake up.”

David Dess, vice president of brand development and communications for Sprint PCS, argued that the average consumer doesn't hear the line with the same ears that an industry analyst does. But he admitted, “Frankly, that's not one of my favorite tag lines. Every year we look at changing it. This year we're looking at changing it as well.”

To wireless analysts who may have become more frustrated with carriers than even wireless customers have, change is good and long overdue. And the lesson that Alltel's Scott Ford learned lately is a valuable one for the entire industry.

“It's nice that we're getting away from price competition, even in advertising,” said Yankee Group's Entner. “We've been preaching to [carriers] long enough that you can't differentiate when every one of your ads has a dollar sign in it.”