Nigerians Are Loyal to Brands with Strong Equities – Spectranet boss

Mr. David Venn is the Chief Executive Officer of Spectranet, Nigeria’s leading 4G LTE service provider. In this interview by AMOS OLADELE, he speaks on the company’s brand building efforts and their impact on the Spectranet brand in the market place.

What was your brand’s performance like, last year?

Two years ago, we started a whole brand change for the business and repositioning of Spectranet. We did our research before we started the exercise and we discovered that two years ago, not many people had heard about Spectranet. When you asked on the streets what the company did which was what we did, most people didn’t know. We found out that some of the people who knew about Spectranet were really not very sure of what it does. But, then, there were customers who were patronising us already and they loved it. But they were a very small set of people. What works well in this market is word of mouth; recommendations by friends to friends. But not much of that was happening to Spectranet at that time. Hence, we saw a need to start getting the brand out there, re-position the brand and clearly define where we wanted to fit in the market because there were and still are a lot of telecoms companies here, in Nigeria, and people use them in one form or the other. We wanted to carve out our section of the market, where we belong. We want to be known as a brand that is providing really good and affordable broadband data service. And that’s what we decided to focus on.

Secondly, if you look at the market and who we should be addressing, it falls into two camps. The first one is what I will describe as professional middle class Nigerian families. We fit very well into that market. Those people want broadband, good internet connectivity in their homes and wherever they are as well. These are not necessarily mobile, but they are what I would call nomadic; they take it with them in their cars, offices, etc. The second is Small and Medium Enterprises. They are not very well addressed in terms of internet service in Nigeria like the corporate firms are. If you are a big corporate company, a lot of suppliers go after you with sales teams trying to sell you stuff, but the SMEs, about 17 million of them in Nigeria, are not well addressed at all. So, we felt our product and service will fit quite well with them.

What we also found out was that in this market, there’s a big overlap between middle-class Nigerian families and SMEs; it’s the same people in a lot of places. It’s either a professional who has his business by the side, or his wife has a business. Thus, we felt that’s a perfect market and quite important in terms of building our brand equity. As we focused on it more, it became clear that this was our market. If you use internet at home, it is different from using it on your mobile phone, moving about. On your mobile, it’s only you using it, but at home, you have different people logging to the Wi-Fi at the same time. What people do is that when they get home, their phone automatically latches on to the Wi-Fi because it’s cheaper and faster. What you tend to do at home is use internet for entertainment, for things like Skype, music videos, comedies for hours. Netflix just came in and a lot of people are switching to it. You need a good broadband connection for that. That’s really for the home. Thus, our typical user is the same person but not the same usage as a person on the phone is using.

We did a lot of work to understand who our customer actually is and what he does. We never used to do TV or radio adverts, but in the past year as part of brand building, if you look at our TV ad, it shows a family environment; the kids in their rooms playing online games, the father in the lounge or wherever watching football but all of them streaming. Gaming is a big thing around the world now. My son plays with his friends around the world. It’s a live game and you need good connection for it. So, what we found is that the biggest issue we have is trying to get people to come on our network and try it. Once they come on, they love it and use it more. It builds up and they can’t do without it. Taking it away is like taking their TV away. So, we got a lot of people in that category in 2016. We really focused on those types of people and that is where our brand fits in now.

You have mentioned in passing that SMEs are about 17 million and they overlap with the middle class family. Do you have a picture of the size of the market in Nigeria that you are targeting in figure and geography and how much of that market has Spectranet attracted to itself?

At the moment, we have service in Lagos, Abuja, Ibadan and Port Harcourt. Our target with the SMEs is around the 10 million mark. And the penetration at this very moment is very low because most people in this country have their internet experience only on the mobile phone. There are 100 million people using internet here according to NCC, probably less than a million of that figure uses broadband. So that’s about 1%. The penetration is very low but it’s growing quickly.

What brand building effort is Spectranet making to increase the penetration and market share?

We are doing a lot in brand building. The focus is narrowing down. We are not an MTN. We don’t have the budget or marketing spend. What we have to do is focus on our target market, make sure our product fits there and face that with our limited marketing spend.

We went through three stages of brand building last year. The first was announcing the name: who is Spectranet? The second was what do we actually do. For people who know the name, they should understand what we do. The third is much more of emotional attachment; to say we are the good guys. We’ve got good packages. It’s great and it works. This is why you need us.

When we first approached people on the streets, they thought we were a sports brand. Some took us for a TV company because of the old logo. Our branding effort has corrected all that. In terms of getting people on board, we tried as much as we can to make people try us out because we know that once they try us out, they stay. And we just launched our unlimited plan and it is very popular. We are always trying to be innovative because it’s a crowded market place. We’ve got the big guys advertising heavily, but we are actually not the same as them. To an average consumer, we seem to have fallen into that category. We are in there with all the noise going on. So, when you have a limited marketing budget, you have to be very focused. We also spent a lot of money on social media advertising because almost all our potential customers are already on the internet. They won’t come to us if they haven’t used internet before. What they are coming to us for is a much better experience. The advertising we do on TV, radio and print helps to build credibility and stature.

Talking brands, you must have challenges. For you to have done the unlimited plan, that means you know what your consumers want. With the unlimited plan, are you on a pricing strategy drive? If yes, do you have an understanding with the NCC on the price floor which it introduced?

We didn’t just launch the unlimited plan. We did a lot of research and we got feedback, particularly because we are always on the social media. We found out that unlimited is what people think they want. They don’t know how much they use in terms of data, but they say ‘unlimited sounds good to me’. The main benefit of unlimited really is not that you’ve got unlimited data; it’s that you are not going to be disconnected. So, in instances where you’ve used so much, it slows down, but you still will use it. We launched that recently and it has been hugely successful. We don’t believe the numbers. We’ve only had it for a month and so many people signed for it. Our main plan in Lagos is N18,000 for unlimited. And we felt it will only appeal to the top end of our customer base, but it has actually appealed to all types of customers. But our customers using unlimited will have more than those using unlimited on our competitors networks. The speed of most other unlimited packages on mobiles is restricted. With the restricted speed, you can’t watch a movie. Ours is normal speed.

On the data floor, there was a big issue last month when the NCC tried to re-introduce the floor price for data. I think it was misunderstood in the press. We are very much in favour of that because some of the telecommunications companies have driven the price down to way below their cost, so they are certainly offering data at a loss. They are doing it intentionally to try and tempt people across. We are not looking to see if we can compete on price with them. Our underlying costs are much because we are more efficient than telecommunications companies. In a normal competitive world, we can charge less. But they are selling way below cost trying to bring in customers. The problem with that is that it does two things: over time it will kill competition. Secondly, no one in his/her right mind will invest in rolling out a broadband data network if the price you can charge is below cost. There’s no incentive to do it. That was why the NCC stepped in to say you are charging way below cost. Nigeria used to have a price floor way higher than the one they proposed. All they said was we were going to a new price floor and it’s going to be lower than it was just to bring sanity to the industry. I’m very much in favour of that because without the price floor, there will be unfair competition and there won’t be a roll-out of broadband across the country.

And the NCC is talking about broadband penetration?

The country sees the need to roll out broadband and make it available throughout the country as soon as possible. We are doing part of that. We have rolled out 4G more than anybody in the country in terms of broadband. We are the market leader. It is part of the drive to modernise Nigeria. The NCC believes that if they get connectivity across the country, it would help make the country more efficient; open up more industries and new opportunities. Unfortunately, the government doesn’t have its own broadband company. So, instead they encourage and push the private companies and part of that is the price floor to ensure that investors get returns on their investment. This is a good market for internet. If you do a study across the world of internet usage, Nigeria should be a lot higher than it is because you’ve got education, and you are English speaking which is important for the internet. Nigeria should be a lot higher but it’s not because of unavailability. It’s not available to everyone in remote areas and also at the right price. The world has moved on in terms of internet usage and Nigeria will get left behind if things don’t happen as they should.

What are your projections for the new year and lastly, as the chief brand builder, how inspiring and challenging has the work been for you?

In 2017, we want to push to 10 more cities. It’s difficult because you can’t get forex to bring in equipment, so there’s a barrier there. In times of recession, you either withdraw or cut your costs and try to survive. Or you take it as an opportunity to expand fast. We are really looking at what we can do to move ahead in 2017.

In terms of how inspiring the job has been, this is my first time in Nigeria. I’ve worked a lot in emerging markets. I’ve been in Africa for quite some time. I worked in Zambia for seven years and Ghana for two years. I’ve also been in Asia; Indonesia, Malaysia, Pakistan, Bangladesh and now I’m in Nigeria. This is definitely the biggest and most vibrant market I’ve ever worked in. When it comes to applying good marketing techniques and experience in brand building, it works here. People are very brand conscious in Nigeria. They wear it on their sleeves as wrist watches and all that. You don’t see that in the other markets I’ve worked in. People appreciate top brands and also the building of brands and what we stand for. In other markets, people often don’t understand the brands. They just want what’s the cheapest not necessarily mindful of the quality. Here, people want quality. And what I’ve found is if people have a service or a product that they like and it works, they don’t look elsewhere. I think that’s part of the Nigerian culture although I’m still learning. It’s when you mess up that they start looking around for alternatives. It means they are very loyal to the brand as long as you look after them. So, we are trying to fit in there, rendering good services at affordable rates. As long as we get people in and we provide good services, they will stick with us. It has been quite interesting. This is one market I think with decent and proper brand building, you can see the result quickly. I think it’s fair to say now in the markets that we are targeting, Spectranet is a household name and we got the awards to show in recognition of what we have achieved. We have come a long way and that’s purely brand equity. We are not the same as the telecoms brands and people don’t see us as such. We are not an alternative to them, rather we are different as we’ve been focused with our message.

What’s the message for the customers in 2017?

We are trying very hard to make sure we satisfy our customers. It’s a competitive market and we need to make sure they are happy. Our role is to make sure we provide them with what they need now and in the future and in doing that we are pushing the market to deliver more. We are trying to make sure we stay ahead of the game.