Creates a springboard for push into convergence and new services
Yesterday, BT confirmed it had begun plans to make EE the company’s principal brand in the consumer market.
The decision was shared in a blog post by Marc Allera, CEO of BT’s Consumer division. Although presented in an understated fashion — positioned as little more than the next stage in the unit’s evolution — I believe it’s a significant development that will be closely monitored by competitors.
After acquiring EE in 2016, BT initially decided to retain both brands, rightly concluding that a major name change would prove an unnecessary distraction in the complex process of integration. Instead, it focussed on fixing a poor reputation for customer service — particularly for the BT brand — and it should be applauded for a turnaround that’s led to record-high net promoter scores.
But I’ve always said that running two major brands couldn’t continue indefinitely. As Mr Allera highlights, it brings additional cost and complexity both internally and for customers: two accounts, two apps, two product road maps and multiple systems. This isn’t an approach that aligns with strategic efforts to streamline BT, improve simplicity and achieve bold cost-saving targets.
I’ve recently observed a greater focus on the EE brand for home broadband, an area traditionally synonymous with BT. This included a high-profile marketing campaign to promote EE Full Fibre Max. This built on EE’s already strong standing in mobile, where it’s benefited from significant marketing spending and regularly won awards for network leadership from RootMetrics. EE has steadily become more prominent, so the decision to install it as the flagship consumer brand isn’t a surprise.
For the BT brand, the announcement represents a failure to resonate with the UK’s increasingly technology-savvy customers. It’s clear that EE is best equipped to spearhead Mr Allera’s vision for the next chapter of BT’s Consumer business, which he said will focus on innovation, convergence and services beyond connectivity. Further details will be announced later in the year.
It’s important to note that the BT brand will remain in the consumer market, albeit with a reduced focus, to offer landlines and standalone broadband. This makes sense, given a disproportionate skew among its customers toward older people more likely to subscribe to these services. Still, BT must manage its messaging carefully to reassure these groups that their service will remain unimpeded.
We agree with BT’s branding decisions but recognize this would have been a highly charged and emotional choice. It will not be universally welcomed; many older customers have an enduring affinity for the BT brand, and internally so do some long-serving BT employees.
Since BT acquired EE in 2016, the sensitive topic of branding has hung over the company’s efforts to integrate the businesses. This announcement should be considered part of the next chapter for BT’s Consumer business, creating a springboard for the unit to push harder into convergence and new services while removing some of the cost and complexity of running duplicate brands.
About seven years after first agreeing to buy EE and following extensive work to fix the fundamentals of the Consumer group in areas such as service, reputation and brand, BT finally appears ready to focus on reaping the true benefits of the acquisition.
This article is an abridged version of an Instant Insight published by CCS Insight on 27 April (see Instant Insight: BT Announces Consumer Branding Shift). For more information on this service, contact us here.
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