Cellco Partnership

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Cellco Partnership

180 Washington Valley Road
Bedminster, New Jersey 07921
USA
Telephone: (800) 214-3555
Fax: (908) 306-6927
Web site: www.verizonwireless.com

CAN YOU HEAR ME NOW? CAMPAIGN

OVERVIEW

Cellco Partnership, which operated under the name Verizon Wireless, was the largest mobile-phone service provider in America during 2002. Rated best by consumers in customer satisfaction, Verizon was spending an estimated $1 billion every 90 days to improve service quality and to expand its coverage "footprint" (the term given to a mobile-phone reception area). Although its smaller competitors, such as Sprint PCS Group and Cingular Wireless LLC, began price wars using lower-priced calling plans, their footprints and sustained-call rates were lacking. Subscribers using Cingular were four times more likely to drop (lose service during) a call than Verizon's customers. Avoiding the price wars completely and rebranding itself as a premium service provider, Verizon launched its "Can You Hear Me Now?" campaign on January 14, 2002.

"Can You Hear Me Now?" was created by Bozell, a New York-based ad agency that operated as part of the Interpublic Group of Companies. The television spots starred actor Paul Marcarelli as a Verizon field tester who dropped in on locations ranging from the outlandish to the mundane. In each spot he asked, "Can you hear me now?" into a mobile phone. After hearing an affirmation, Testman, as Marcarelli's character was dubbed, replied, "Good!" By 2003 Verizon was spending $300 to $400 million annually on the "Can You Hear Me Now?" campaign, with an additional $700 to $800 million on direct mail and in-store promotions. Only 10 percent of the campaign's budget went into print advertising.

Although the "Can You Hear Me Now?" campaign did not receive many advertising awards, it did help establish higher-ground branding for Verizon during intense industry competition. The number of Verizon subscribers increased from 32.5 million at the campaign's launch to 37.5 million in 2003. By the start of 2004 the number of subscribers was 43.8 million, which indicated that quality was indeed a strong selling point for cellphone consumers. Verizon remained the number one wireless provider in America until February 2004, when Cingular purchased AT&T Wireless Services for $41 billion.

HISTORICAL CONTEXT

Cellco Partnership, doing business under the name Verizon Wireless, formed in 2000 when Bell Atlantic merged with Vodafone, the world's largest mobile-phone service provider. Together the partnership had 32 million subscribers, making Verizon an overnight industry leader. Starting in August of 2000 Verizon Wireless began the largest renaming campaign in history. Print ads featured Verizon employees promising customers that they would receive the same dependable and reliable service they had experienced with Bell Atlantic and Vodafone. The campaign was created by four separate advertising agencies working together: the Lord Group, Burrell Communications, Temerlin McClain, and La Agencia de Orcí & Asociados.

After conducting an analysis of its own quality and that of its competition, Verizon realized that its network provided the most dependable coverage in the industry. It quickly positioned itself as the reliable alternative and continued pouring capitol into improving its already reliable network. In 2003 the Federal Communications Commission (FCC) mandated "number portability," allowing subscribers to keep their phone numbers when they changed wireless providers. Soon afterward many new subscribers turned to Verizon.

"We're not the low-cost provider. We're not the most aggressive with promotional deals and headset giveaways," Marvin Davis, vice president of advertising for Verizon Wireless, told USA Today. "Our brand message is important, because the market recognizes it's a higher-quality service. People are willing to pay more to get more." $4 million was spent improving Verizon's network in 2004, and $5 million was spent in 2005. According to Consumers Union (a publisher of consumer reports), Verizon was receiving the least amount of customer complaints in the industry. Cingular, the market leader since 2004, garnered the most, with 289 complaints per million subscribers.

TARGET MARKET

The campaign targeted 25- to 54-year-olds who treasured their phone's ability to place calls anytime and anyplace. To reach this target, every "Can You Hear Me Now?" spot featured 34-year-old actor Paul Marcarelli as a technician who was always validating Verizon's superior network. At the beginning of the campaign neither Verizon nor Bozell would identify the actor playing Testman. Verizon even denied the press interviews with Marcarelli. The reticence was an attempt to make the spokesman seem as if he lived only inside commercials and to encourage the target audience's perception of Testman as a one-dimensional character.

By 2003 half of all Americans owned cell phones. Price wars continued among most wireless providers besides Verizon, which held its stance on service quality. Verizon averaged $49 per month on calling plans, targeting users with higher incomes. USA Today surveyed the audience reaction to the "Can You Hear Me Now?" ads in its regular Ad Track feature. Results showed that 20 percent of viewers liked the ads "a lot." Although this was lower than Ad Track's average of 21 percent, the campaign scored higher than any other wireless ad for the two years prior.

CONTAGIOUS QUESTIONS

With its "Can You Hear Me Now?" campaign, Verizon joined other advertising campaigns that had reached iconic status by asking questions not always meant to be answered. Wendy's International, Inc., achieved similar contagiousness with its "Where's the Beef?" campaign in the 1980s. Anheuser-Busch had everyone asking "Whassup?" after the 2000 Super Bowl. In 1997 the McDonald's Corporation also made ad history with its question, "Did somebody say McDonald's?"

COMPETITION

Cingular was formed in 2000 with the union of SBC Communications and BellSouth. Early ad efforts for Cingular focused on "Jack," the company's X-shaped, orange mascot, who never spoke yet stood for "self-expression." Using the tagline "Cingular fits you best," its campaign promoted services such as Family Talk and Rollover minutes. "We're seeing very strong results, and I think 'Cingular fits you best' is a big contributor," Daryl Evans, Cingular's vice president of advertising and marketing communications, told USA Today. "Cingular recognizes that people use wireless in all kinds of different ways."

By 2002 Cingular was spending $428 million on advertising. Two years later Cingular acquired AT&T, giving Cingular enough subscribers to emerge as the industry leader. AT&T's infrastructure allowed Cingular to increase its coverage "footprint" instantly. The new leader began targeting Verizon's market in October 2004 with its "Raising the Bar" campaign, which referred to the "bars" on a cell phone's signal-strength meter. Nevertheless, when the broadcast-monitoring group TNS Media Intelligence/CMR conducted customer-loyalty testing in early 2005, asking random cell-phone users to compare their service with that of an ideal wireless provider, Verizon customers proved to be the most loyal, followed by Sprint PCS and T-Mobile. Cingular ranked fourth, with four times as many service complaints as Verizon.

Sprint spent $481 million on advertising in 2002, with a campaign that starred a spokesman referred to as "Sprint guy." In television spots "Sprint guy," played by a tall, blue-eyed actor clad in a black trench coat, explained different Sprint services to people. One commercial featured him demonstrating Sprint's camera phone to a family on a beach. Another spot, hinging on deadpan humor, showed him consoling a support group of disgruntled wireless customers. "Sprint guy" appeared in more than 100 television spots, mostly promoting features such as no-roaming fees, Sprint's all-digital network, and high-speed wireless Internet service.

MARKETING STRATEGY

Before the "Can You Hear Me Now?" campaign began, Verizon discovered that consumers struggled to differentiate between wireless brands. The campaign's greatest challenge was to establish higher ground in an industry undergoing fierce price wars. Unable to lower subscriber fees, Verizon focused the campaign on Verizon's premium coverage. According to a statement released by Bozell, the campaign was intended "to position Verizon Wireless as a superior wireless company that relentlessly strives to be the most reliable national wireless provider in the country."

The campaign's first spot was launched on January 14, 2002. Over the course of the campaign more than 100 similarly themed "Can You Hear Me Now?" television spots were made. All featured the same spectacled man, dressed as a Verizon test engineer, traveling the country to validate Verizon's infrastructure. Testman, as his character was called, appeared in wheat fields, on snowy mountains, on the set of the TV show Jeopardy, and in airports. In most spots Testman quickly asked, "Can you hear me now?" After supposedly hearing an affirmation through his phone, he replied "Good!" Later spots varied. A 2004 commercial showed Testman standing nervously in an office-building lobby. A woman finally exited the women's restroom and handed Testman a mobile phone. "Works fine," she said. A voice-over then stated, "When you're testing the largest, most reliable network in the nation, you can't let anything stop you." The spot ended with Testman making one last call, asking, "Can you hear me now?"

CAMPAIGNING A CULTURAL ICON

Testman, the character constantly asking "Can you hear me now?" into his Verizon phone, appeared in more than 100 spots, Some featured him on the sets of TV shows Jeopardy and Fear Factor. References to the character and his tagline became widespread. Saturday Night Live used the slogan to lampoon President Bush, showing him asking Israeli prime minister Ariel Sharon, "Can you hear me now?" The Tonight Show got on board by depicting Alexander Graham Bell repeating the question into one of his earliest telephones, Verizon pushed the Testman craze so far as to stage a Testman look-alike contest in Wisconsin.

"Can You Hear Me Now?" print ads (many, but not all of which featured Testman) appeared in magazines such as Entertainment Weekly, People, Sports Illustrated, and Rolling Stone. During the first year television spots were created by Bozell, but after Bozell merged with another Interpublic-affiliated agency, Lowe, in early 2003, the campaign was produced by Lowe & Partners Worldwide. It eventually moved into the hands of McCann-Erickson (also a division of Interpublic). One of Bozell's early challenges was casting the Testman character. "We were looking for someone memorable. Something that would cut through the advertising clutter," Melanie Vandervalk, vice president of marketing and sales for Verizon Wireless, told the Washington Post. Verizon settled on Paul Marcarelli, a 34-year-old actor from New York. At the campaign's onset, Verizon restricted the press' access to Marcarelli. Verizon would not answer questions about his identity or allow interviews. "He needs to stay one-dimensional and [Verizon] needs to control him. It turns from advertising to PR," Kristie Nordhielm, assistant professor of marketing at Northwestern University's Kellogg School of Management, explained to Advertising Age. "To expose him is a tradeoff between getting additional exposure for free and losing control of his image, but it's not because they don't want him to be an icon."

Some experts felt the campaign's tagline had been repeated ad nauseam. "'Can you hear me now?' [has become] annoying because of the repetition, but I think it drives home the point, and it works for that reason," Robin Hafitz, cochair of Mad Dogs & Englishmen, an advertising firm in New York, told the Washington Post. Verizon further catapulted Testman to the status of a cultural icon by sponsoring look-alike contests in Wisconsin. "I think the key to the Verizon [Wireless] guy is his understatement," Nordhielm continued in Advertising Age. "These things go in cycles and right now we seem to be in 'less is more' time with the Dell guy [Steven] being 'more is more.' To identify a cultural icon is like rolling the dice. It's the right place, right time, right icon."

OUTCOME

"Can You Hear Me Now?" was connected with some of Verizon's earliest and greatest successes, including reducing customer turnover to 1.8 percent, a 2.5 percent drop from 2000. "You can see that the commercials have really resonated with consumers," said Sue Marek, a former industry analyst who covered the wireless sector for Wireless Week, told the Baltimore Sun. "It's really paid off for them in a big way." While competitors had to drop prices to maintain market share, Verizon was able to maintain its average monthly service revenue per user at $49. During the first year of "Can You Hear Me Now?" Verizon sales grew 10 percent. Overall, Verizon achieved the campaign's two main goals: increasing the subscriber base and establishing itself as a premium service provider.

At the start of the campaign Verizon had 32.5 million subscribers; in 2003 it had 37.5 million, and at the beginning of 2004 Verizon subscribers numbered 43.8 million. The increases indicated that cell-phone consumers were just as concerned about quality as they were about price. Linda Barrabee of market research firm the Yankee Group said to USA Today, "If you only feed customers lower prices, that's all they are going to think of you as. If you give them something compelling, they'll consider staying with you."