Is the iPhone a PR Fiasco for Rogers?
Ever since Rogers came out with its 3G iPhone plans, it has taken a public relations pounding.
This has seen a wave of negative blog coverage, an online petition that has attracted more than 50,000 people, critical newspaper editorials, a lot of consumers dismissing plans to get an iPhone, and a temper tantrum from Apple, which has decided not to sell the iPhone at its Apple stores in Canada
In response, Rogers has done little. Sure, it’s had a spokesperson available to the media but this has come across as defensive rather than pro-active and creative.
Here’s question: does the criticism and Rogers’ tepid PR approach really matter?
At the end of the day, will the furor over the iPhone simply evaporate? Does Rogers just have to exercise patience until the vocal minority runs out of steam?
The answer is: probably.
In some respects, Rogers made some marketing mistakes about the iPhone, including comments by its CEO, Nadir Mohamed, that prices for smartphones such as the iPhone would “evolve” to take into account mobile Web browsing and multimedia services. Many people took these comments as a sign Rogers was going to offer reasonable iPhone packages.
Unfortunately, their expectations fell short.
In the short-term, Rogers has shot itself in the foot by tempering demand for the iPhone. In the long-term, however, its PR and pricing stumbles probably won’t matter much. People who really want an iPhone - and there are plenty of them - will get one sooner or later.
No doubt, it makes for an entertainment story right now it will likely disappear from the headlines as soon as the next big story comes along.
July 8th, 2008 at 1:49 pm
Two things from my point of view Mark:
1. It ain’t no iPhone, but the Blackberry Thunder is a pretty decent device from what I’ve seen. The Samsung device to a lesser extent (from Bell), but will probably make a lot of people happy too.
2. The winner of the upcoming wireless spectrum will deploy GSM and bring new competition to the market early in 2009.
I think you’re right… people will run out of steam and cave. But Rogers is building a lot of ill will in the marketplace and in the official words of the Quebec motto and license plates all over the province: “Je Me Souviens.”
Dear Rogers, people will remember how Rogers treated their customers when there was no GSM competition and they will not reward them for that behaviour. Apple knows this, it’s too bad you can’t see it.
July 8th, 2008 at 2:40 pm
Rogers is probably in the top 5 most disliked brands in the country. Loathed may actually be a better word.
But as infuriated as I am with their iPhone pricing (or customer service, torrent throttling, gouging, billing and awful advertising) I don’t see how this will have a lasting impact. Even 50k people is too small a sample.
This particular bad PR doesn’t hit them (immediately) in the wallet and so there is no need for a knee-jerk reaction. It’s not how Rogers does things anyhow.
But it’s still a small part of an endemic PR/customer service issue…I think you’ll see the public’s chronic low-level frustration with Rogers bear fruit when the new carriers appear and there is an alternative that’s not Ma Bell.
Churn, karma, churn.
July 8th, 2008 at 4:13 pm
as i said on twitter, i see this as being an operational issue, rather than a PR issue. the PR department can only communicate what the organization is doing - it’s very rare that it can affect change or set policies. if they had hired an actor of ill-repute to be their front man for the campaign, that would be a PR disaster.
although, as noted, the deafening silence from the communications department would suggest that it doesn’t relate to its public as well as one may hope.
July 8th, 2008 at 4:53 pm
Rogers doesn’t have to do anything besides wait out the vocal minority. I’d be surprised if 1000 people who signed the petition would have bought an iPhone. Rogers isn’t going to sacrifice their Blackberry revenue for the iPhone. Any other GSM carrier that might come along isn’t going to grossly undercut Roger’s prices because they don’t have to.
July 8th, 2008 at 4:54 pm
Wayne - I think you’re right on the mark.
July 8th, 2008 at 4:57 pm
So, this leaves me with a question. As a Canadian, where do I buy my iPhone on the 11th?
July 8th, 2008 at 5:01 pm
I’ve been railing against Rogers iPhone plans for over a week now, and yes I will move onto some other injustice sometime after July 11th passes.
I am in that very vocal minority, but I have influence over a portion of the silent minority that look to me as an early adopter of gadgets. These people are curious why my Facebook status read “Mark is NOT buying an iPhone” for the past week and why I’m noisily canceling my Rogers Cable service on Friday, July 11th.
Ben is right, competition is on its way and while masses may have short memories, passionate fans like us surely do not. We will remind our friends of the cynical way that Rogers’ thinks of its customers at every opportunity in the future. Monopolies can ignore market pressure until they can’t. Then the question is the brand equity and trust that they have developed in the minds of customers.
There is a short-term cost and a long-term cost - and these appear to be reflected in Rogers recent stock price decline. Calling it a PR disaster narrows it to an issue of issues management and spin. This is worse. This is a marketing disaster and a strategic blunder with big potential long-term impacts.
July 8th, 2008 at 5:16 pm
Almost every stock on the TSX is down at least 6% in the past weak. I don’t think the Rogers stock price drop has anything to do with bad PR or the iPhone.
The PR from the iPhone has underscored the ridiculous wireless prices that we pay as Canadians. “Joe Canadian” now realizes that they pay a lot more than Americans or Brits.
I don’t really see how any of the PR from the iPhone can be good for Rogers in the long run. They lost a lot of good will in the last 2 weeks, particularly from technically inclined Canadians.
July 8th, 2008 at 5:20 pm
Here is an email I sent to Rogers Executives
This is an example of what happens when innovative companies listen to their customers.
When Apple first released the iPhone, they stated that they would not allow any third party developed applications on the iPhone. After an outcry from customers, they changed their minds and came up with the SDK and AppStore.
Subsequently, Kleiner Perkins created the $100Million iFund to put money into applications developed for the iPhone. This turned into a win-win situation for everyone. Customers get more applications for the iPhone platform in a secure and easy way, carriers get to offer a platform with much more functionality at no cost to them, the vendor Apple gets a huge boost in revenue with limited overhead and a significant differentiator in the market, and a thriving developer community for the iPhone platform is created.
Will Rogers choose the innovative path to deal with customer dissatisfaction, or will they continue to issue press releases stating in essence that customers don’t know what they are talking about? Highly doubtful.
Here are some projected numbers
http://fortuneapple20.files.wordpress.com/2008/06/picture-12.png
Update: Munster took a closer look at the App Store on Wednesday. Based on the health of the iPhone developer community (evidenced by the sell-out crowd of 5,200 at 2008 WWDC and his own informal survey of 20 programmers there) he reiterates his contention that the App Store could make a “material contribution” to Apple’s upside.
“Based on our scenario analysis, we believe the App Store could be a $1billion+ market (aggressive case), and add 1%-3% to operating income in CY09.”
He lays out his three scenarios (conservative, neutral, aggressive) in the following chart:
Part of Munster’s enthusiasm for the App Store stems from the applications demoed at WWDC. “Mobile users haven’t seen apps like this before,” he writes. Sacconaghi thinks the assumption that users will buy two apps each is “generous.” Munster thinks it’s conservative, given that 70% of the apps he discussed with developers are unique to the iPhone, and will not be available on other platforms.
http://apple20.blogs.fortune.cnn.com/2008/06/10/is-the-app-store-a-cash-cow-for-apple/
July 8th, 2008 at 9:04 pm
[...] Is the iPhone a PR Fiasco for Rogers? [...]
July 8th, 2008 at 10:29 pm
I’m wondering… Mark, will you buy an iPhone?
July 9th, 2008 at 6:41 am
Kimberly,
I was really stoked about getting one but the high cost of running an iPhone makes it a non-starter. I’m probably going to get a iPod Touch soon.
July 9th, 2008 at 7:06 am
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July 9th, 2008 at 1:37 pm
[...] feedback”. Yeah, I guess 50,000 names on an online petition and a wave of critical blog and media coverage falls into the “customer feedback” [...]
July 10th, 2008 at 4:03 pm
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July 11th, 2008 at 4:00 pm
Mark Evens,
Generally speaking you may be right but…
You got to ask your self why would someone like me (likes the toys, really wants an iphone n has allot of spare cash)would still say no to Rogers iphone release and walk away. (And how many more like me are out there). It doesn’t matter if its a million or 5 cents its the point and Canadians are being screwed period. Yes, If more people had integrity and a back bone this revolt would succeed. But alas people are like sheep with an average IQ that make average decisions.(i.e.: housing boom n crash)Any half brain saw that one coming a mile away. So people can only do there best.
But in the end no matter what this iphone release may very well be portrayed as a success but it definitely fell short of the financial potential it could have garnered for Rogers. And that is business 101 and the point! Plain and simple, the leaders of Rogers failed in fully realising the monetary gain potential in the release of this iphone.
I would like to update for the general population this…
ROGERS LIED ABOUT CONTRACT!
Existing customers beware!!!
We were told that this new data plan can be used with existing voice plan but what they didn’t say is your existing voice plan must also then be locked into a new 3 year contract also.
ROGERS MISS LEAD US AGAIN !!!!!
July 14th, 2008 at 6:28 pm
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July 22nd, 2008 at 1:13 am
OK I get the iPhone and they tell me because of my credit I have to put down a $200 deposit??? OK sure (bell never did that with my Blackberry) so I got the $30 data and $45 voice and $20 extras thing. 7 days later after the phone comes out they cut it off. WTF!!! so I wait on hold for 30min and the Rogers rep says you have reached your $200 limit and they canceled my service… Why? Because the first bill is Pro-rated and that comes to $209. I have had the figgen phone for 9 days!!!! I gave them such shit and the turned it back on and they asked me for $9… 9 fucking dollars!!! My clients can’t get a hold of me for $9?
Roger’s policy’s stink and I want to go back to bell.