Beauty Contest
By : Roseanne Gerin
Maybe looks aren't everything. But they are important as a part of attitude, style and price.
Savvy individuals and corporations have known about the importance of image for years. But nowhere is the need for image building more indispensable than in industries where one player has enjoyed decades-long domination but now finds itself confronted by a bevy of small but fast-growing competitors popping up in areas it used to dominate.
Poland's telecom sector is one such industry. Telekomunikacja Polska (TPSA), the national monopolist that controls about 95% of the country's fixed-line telephone market, retained its stronghold on customers until the late 1990s. Now the company finds itself in the midst of nascent but increasing competition from eager up-and-comers such as Netia, Szeptel, Telefonia Lokalna and El-Net.
Thanks to the recent loosening of market regulations, these small, fixed-line contenders have been granted operating licenses by the government and have set up shop alongside TPSA. But given TPSA's dominant position in the market, new operators have had to focus on creating a corporate image based on quality customer service to win over clients.
"They can fight only with services," said Miroslaw Wolowik, vice president of Grupa A5, a Gdansk-based corporate identity company. "The (corporate) image will be connected to the relationship between companies and consumers."
With the gradual opening of Poland's tightly regulated telecom market has come the realization that customers can make or break a business. Market competition has prompted companies, including TPSA, to build or rebuild their images based on customer service so that clients can be won over, a battle that will intensify when the domestic telecoms market is fully liberalized at the beginning of 2003, industry professionals said.
Customer is king
To compete against TPSA, which has about 10 million customers nationwide and controls about 95% of all fixed-line telephony services, new companies have formed their lines of attack on the corporate image front. Their main weapon has been the creation of an aura of dedication to customers through quick and friendly service and the delivery of a better product, thanks to fiber-optic telephone switches and cables for clearer and more rapid transmission of calls.
"What's important for consumers is the quality of service," Wolowik said. "The consumer very quickly discovers the tariffs are all the same."
A market report on telephony tariffs issued last June by Pentor Institute, a Warsaw-based market research company, stated that prices were only one of the factors in an operator's offer and that they were evaluated as part of the entire package proffered by telephone companies. The potential client's final decision is not based on tariffs alone, but also on coverage, quality of service, offers of extra service and their opinion of the operator, the report said.
Now that companies, including TPSA, have introduced lower tariffs for their services or offer different service packages with competitive pricing, they are increasingly focusing on sprucing up their images. And likewise, prospective and existing clients are looking for a telecom company whose image is built on quality service.
"You might buy a Seiko watch because it's on sale and has a competitive price," said Robert Narojek, Netia's marketing manager. "But you might also buy a cheap Hong Kong watch. The first one has the aspect of communicating the user's expectations and fashion sense, while the other one only tells the time."
Improving and implementing customer service runs the gamut from installing fixed-line phone service quickly to beefing up response time to customer inquiries as well as giving advice to clients about the operator's services. Netia and Szeptel, for example, have 24-hour customer call centers where their clients can contact a service representative free of charge.
"Netia's focus is on the client and quality, and we are always trying to show people we are the young up-and-coming company on the market that is redefining expectations of customers by raising the bar," Narojek said.
Netia has also had a "quality service guarantee" for its 300,000 subscribers in Krakow, Poznan, Gdansk, Lublin, Katowice, and the Warsaw suburbs ever since the company began its operations in November 1998. The company promises to restore phone service within 24 hours or customers receive a refund. At the end of 1999, Netia's average response time to problems was 4.5 hours, Narojek said. He estimated TPSA's response time to service restoration at 38-45 hours. And the company's customer-is-king mantra contributes to Netia's image as a "strong, reputable and trustworthy" company, Narojek said.
Corporate customers have special needs for additional services. If equipment malfunctions or needs to be replaced, or if the company wants new lines installed, it wants its needs met within two to three days to prevent a disruption of its business, said Piotr Oleksiak, director general of Monogram, a Warsaw-based corporate identity consulting firm that develops all aspects of corporate image from creating logos to standardizing advertising. And because of this, companies unlike some individual residential customers cannot sacrifice service for price, according to industry professionals and telecom operators.
"The name, position and brand is very important for customers," said Jarek Pawlak, research director responsible for telecom studies at marketing research firm Taylor Nelson Sofres. "It's more important for the business sector than price. A company with a strong brand and corporate image has easier access to the Polish business sector in the market than an unknown company."
Many industry observes agree that TPSA has realized the onset of market competition and has been busy sprucing up its own image during the last two years.
"What I see right now with TPSA is customer service that works better than it did two or three years ago because the company knows competitors are coming and it must create its name as one of the biggest and best in the country," Oleksiak said.
But the jury is divided on whether the incumbent has actually made headway in improving its service standards.
"TPSA has some negative things associated with it being the monopolist," said Jaroslaw Filipek, director of Codes, a Warsaw-based corporate identity consulting firm whose client is Netia. "It's not like Netia, which started with a tabula rasa. People remember bad (experiences) with TPSA, such as the quality of services and problems with getting phones. Many people still wait for phones. It's not easy to get a telephone line (in Poland) like it is in the United States where you can get one within 24 hours."
But Filipek pointed out that despite "heavy baggage connected with the past," TPSA retains its advantage of offering services nationwide. "It's the biggest benefit and the company will never lose it," he said. "It's possible people will be proud of this company in their country one day."
Nevertheless, image is just as important for TPSA. "People don't realize whether a company is state-owned or private, so image is important," Oleksiak said.
And opinions are divided on whether, given the ongoing privatization process, a strategic foreign investor for TPSA would boost the monopolist's image.
"A strategic partner would be an accelerator of TPSA's corporate image and identity (building)," said TNS' Pawlak, who counts the monopolist among his current clients. "It would be a good opportunity to further changes at TPSA."
Considering the growing number of small companies that offer fixed-line service, an image package will start to count more as soon as they have expanded their networks. At the moment, building a corporate identity package from logo creation to advertising standardization takes about 12 months and costs zl. 40,000-zl. 120,000, Oleksiak said.
For telecom companies, developing a corporate image entails building a package of elements that will convey the value of their commitment to good customer service. Telecoms also consider competitive pricing, additional services, logo design and corporate sponsorship of events as necessary factors.
"Building a corporate image is wider than just marketing or advertising the corporation," said Andrzej Binkowski, managing director of Szeptel, a Szepietowo-based telcom with more than 16,000 subscribers in Lomza, the single area for which it holds a license to provide service. "It's how investors, customers, competitors and the government sees you and it's how your employees see your company. Advertising is mostly done for something like (introducing) a service or offering new shares on the stock exchange. Image is a full package of different attachments."
Logo and colors
Corporate image gurus say that logo design is the first step in building a corporate image. For telecom companies in Poland, blue is a mandatory color, according to surveys conducted by market researchers for companies such as telecoms that depend heavily upon corporate clients. They said blue conveys professionalism and reliability values that appeal to corporate customers.
"Logo creates value," Oleksiak said. "It's the first element that makes you an individual on the market."
Some of the new telecom companies have followed the lead of TPSA, which has a blue "TP" logo. Netia, TPSA's biggest competitor, has a navy blue logo with a green diamond topping the letter "i" in Netia.
"Blue is a good color for business overall," Netia's Narojek said. "We must communicate that we are stable and business oriented and trustworthy."
He pointed out that the same green diamond "i" will be used for the company's internet portal. "The diamond is something that serves as an icon apart from the logo because it's different," he said.
Other telecom logos are harder to figure out. The logo of Telefonia Lokalna's fixed-line service Dialog two entwined boomerangs, one orange and one blue is not the best symbol for a telecom company because it resembles "two bananas," Monogram's Oleksiak said. While Oleksiak says market research has shown that orange is not an appropriate color for a telecom company, he commends Telefonia Lokalna for its service's brand name, which is short and memorable, and appropriately conveys the essence of two-way communication.
Sponsorship
Corporate sponsorship of events, another element that defines and enhances corporate image, has caught on in Poland, with the larger telecom companies such as TPSA and Netia sponsoring concerts and sporting competitions as well as professional fairs and seminars. Later this year, for instance, TPSA will start its summer concert series.
Events must be geared to the company's target group, corporate image makers said. And for telecom companies, the most effective way of reaching their corporate clients is by sponsoring professional fairs and seminars. "We have to think to whom the corporate image is (directed)," Oleksiak said. "If you want to concentrate on the corporate customer you have to think of who makes the decision in a company to sign a contract with a telecom firm, so there are different ways of communicating to individuals and corporate customers in sponsoring an event."
Polish telecoms are also looking west to their big European and American counterparts for examples of how to bang out an indelible impression and win more customers. Those telecom giants are years ahead of Poland in terms of image building, and have grown up under a free-market system with intense competition, according to industry experts.
"Foreign companies especially pay attention to customer service," said Pawlak. "It's a tradition brought here from western companies ... where it's difficult to fight for the customer and retention of customers is crucial. Polish telecom companies will have to respond to their foreign competitors and follow this policy. Our market is very young and inexperienced."
