Marketing Week Effectiveness Awards 06 Winners

Chief Executive Award For Marketing - Winner Peter Erksine

O2

After graduating from Liverpool University, Peter Erksine went into marketing. By his mid-20s he was a brand manager with Polycel before moving to Colgate-Palmolive, and then to Mars where he spent ten years before joining Unitel, a start-up mobile phone business. It was 1989 and mobile phones were just taking off. After planning the launch for Unitel, he was poached by BT to run Cellnet, its mobile arm, to become one of the first marketing figures to make it to chief executive. In 2001 Cellnet was demerged into a wholly separate listed company, O2, and Erksine remained ceo of the company, taking it from being the third-biggest UK mobile operator to the top spot. In 2005, as O2 was nearing its fifth birthday, Spanish company Telefonica saw its potential and moved in with a £17.7bn takeover deal. Erksine saw it as "an offer we didn’t think our shareholders could refuse" which was good for customers, offering "better international rates in time and better handsets" and good for the business, with "no overlap, no redundancies". O2 under Erksine has cut customer turnover by introducing loyalty campaigns designed to reduce the irritation shown by many long-term customers at seeing attractive offers made to newcomers from other networks. "We'll actually give you as good if not better deal. Others followed but we trailblazed on that," he has said. "So our UK business has now 16 million customers."

Technology & Telecoms - Winner O2

Telefonica

In 2004, the UK telecoms market underwent a transformation. Mobile penetration had levelled at 74%, the highest in Europe. Manufacturers and retailers were advertising handsets and repackaging airtime deals in a way that destroyed established network-customer relationships, strengthened consumer power and forced operators to increase payments to retailers. With the disappearance of functional variations between the networks, competition on price, service and brand affinity between the network operators – O2, 3, Orange, T-Mobile and Vodafone, together with the four virtual network operators – was fierce. All the operators became embroiled in a destructive spiral, directing their marketing at poaching each other’s customers with the result that consumers began to feel neglected and disaffected with all brands. O2 recognised that consumers were tired of increasingly empty promises and that there was no need to reward the loyalty of existing customers and improve relationships with them. This strategy was encapsulated in the launch of the "World That Revolves Around You" campaign, launched in April 2005. In all, 2,000 extra customer service staff were hired and new staff training programmes were implemented. Loyalty, rather than defection, was rewarded. Pre-pay customers were offered 10% of top-ups back every three months and contract customers given 50% extra airtime when connecting to an eligible 18-month tariff. A million disconnections were prevented between April and December 2005, and models suggest future disconnections have been forestalled. New customers joining O2 are expected to generate sufficient additional margin to repay the associated media budget 18 times over.

Financial Services - Winner ING Direct

ING

Ina mature, crowded market, with more than 150 products available, the savings sector is dominated by a few large brands. Most savers stay with the same savings provider for more than ten years due to confusion and apathy rather than satisfaction. A few years ago, banks such as the Halifax and Abbey were considered safe and trusted, but were also seen as being stuffy and unhelpful. While younger brands such as Egg and First Direct were perceived as more progressive, and had made some headway into the savings market, their madcap communications made people hesitate before placing their savings with niche operators.

ING Direct's "single rate for all" launch in 2003 was designed to be a breath of fresh air, shaking up the market and forcing the high-street banks to compete more actively. ING Direct’s audience is the mainstream, conservative 35-plus ABC1 saver with an average household income of over £25,000. These people make up an attractive audience because, although they are harder to attract, they have a greater propensity to save money. ING Direct's launch campaign did not include any hidden promotional rates or introductory offers: the positioning was simply "One great rate for everyone, with no catches or hidden penalties". By November 2003, ING Direct had attracted 1 million customers and £24.5bn in funds under management. As a new brand, ING Direct broke even by 2005 after only two years, compared with Egg's three years and First Direct's six years. By the end of 2005, ING Direct had become the fastest growing savings account in the UK.