Our broadband future may not be a wasteland after all
Last week, I sat down to talk shop with three TekSavvy execs who are breathing new life into the indie ISP sector. At the table were Marc Gaudrault, co-founder and CEO; Tina Furlan, Director of Communications & Marketing; and Pierre Aubé, Chief Operating Officer. They were wrapping up a visit to the Toronto ISP Summit, where the keynote speaker was CRTC chair Jean-Pierre Blais.
We discussed the broadband market in Canada, including the continuing enthusiasm over J-P Blais. We also talked about TekSavvy's cool rebranding campaign and how it reflects the company's approach to growing its subscriber base, now at 180,000. If you haven't seen the new creative, here's what one of the ad banners looks like...
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This one has proven so popular in the Toronto subway that riders are actually stealing them as souvenirs.
What follows here is a much-shortened version of our 45-minute conversation, edited for clarity. If you want to read what Marc had to say in his speech to the Summit, it's on his blog: The Evolution of Access and the TekSavvy Story. We started by discussing highlights of the Summit. The big news seemed to be about the CRTC Chair.
MG -- I really appreciated the fact Blais came here to talk to us. That in and of itself is validating. It's nice, a fresh change. I think it's fair to say there's a bit of a shift afoot here.
DE -- Did Blais talk to the audience in a way that felt comfortable?
MG -- I think he probably sounds a little more radical to some than to others. For me, it certainly feels like somebody finally gets it. It seems Blais is saying, let's hold the stakeholders accountable. And if consumers are saying, hey, something's wrong over here, well, odds are there is something wrong. So we should go look at it and do something. And if the incumbents say, we have something wrong here, Blais will look at that, and if it's legitimate, he'll do something about it. The first step is acknowledgement. That right there -- wow -- that's good!
DE -- Blais seems to have the right attitude. He's also got problems to address. Which ones worry you most?
MG -- The recent decision on confidentiality of information was great. However, as I highlighted in my speech, the biggest obstacle we currently face is the wholesale pricing for Internet access set in November 2011. Since then, a tsunami of review-and-vary applications has been launched. Nobody is happy. Oddly enough, though, some have been making a ton of money, yet they're still not happy (laughs).
We didn't get the transparency we needed on the rates file. Arguably, that's the most important issue. Transparency won't be too useful if we're not around any more (laughs). On the other hand, we've now seen a filing from Telus, about power in colocation facilities, and the new transparency rules have been applied to that. Telus was required to show a lot more detail than they would have in the past. The rules are in effect, they're being used, and more data is already out there. (The Chair's speech is on the CRTC site.)
DE -- Let's talk about TekSavvy. Can you tell us how the re-branding came about?
TF -- Our industry is very regulatory-heavy. We were missing a focus on the consumer. What do they want to see? Who do they think TekSavvy is? And let's put that into practice and give it a life. What we came up with was something very edgy, engaging, cheeky. It really represents the personalities at TekSavvy. And I think everybody can relate to it.
DE -- To what extent did this re-branding grow out of your existing base, as opposed to you pulling in new customers?
TF -- I think a lot of it was born from our existing base. We looked at who we had: very techie at the time, plus very passionate, very aware of the issues. But if you look at those people now, they were our heavy users -- today everybody's a heavy user. So going forward our marketing concepts will resonate with new customer segments.
DE -- You use terms like "300 gigs" in your new ads. Do you think there's awareness among your customers of what a gigabyte is?
TF -- I think everybody's aware of it if they have a cap with their existing provider. You look at your monthly bill and you get charged overage, you make yourself aware of what a gig is. And having 300 of them is something everybody wants -- if not more than 300. I think our customers are much more knowledgeable than we give them credit for. By the way, that particular poster (the hunk in the ad above with the 300 gigs) has been stolen off the subway many times.
DE -- Woah, people are stealing them?!
TF -- Yes (laughs).
DE -- What are your goals now that you've launched this campaign?
TF -- I think we've just started to scratch the surface of the potential we have. Since we launched the campaign with this creative, we've grown significantly. Obviously we want to continue that, and we want to be able to take this campaign in many directions and into many new markets. If you look at our subscriber base right now, they're primarily 19-to-35 year-old males. But there's so many characters within this campaign, it will work for many different demographics. It's very versatile.
DE -- Did you hear negative feedback about the company's marketing prior to the re-branding?
TF -- Yes we did. It wasn't overly negative. We had general comments like, "Oh your marketing could really use some help." But I think from a marketing perspective, as long as people are talking about it, you've done your job.
MG -- It was born out of who we are. When you take that approach, how can you go wrong? We're proud of who we are. We care what our customers say and think, and we try to respond to their needs.
DE -- But you are interested in going after new customer segments, that's built into the plan?
TF -- It is built into the plan, yes. If I thought all our customers were 19-to-35 year-old males, we'd be missing a whole other demographic. Right now, there seems to be a shift going on to a more "feminine" type of decision-maker, taking place at the purchasing level within the household. I'm sure there are lots of women who'd like to be TekSavvy customers.
DE -- Are you focusing on customers who've never been connected or on switchers?
MG -- Well, about 80 per cent of the population, certainly in urban areas, are already connected one way or the other. So to a degree I think we're all switchers.
TF -- We are very interested in taking switchers. If you look at the 300-gig line in the poster, that's targeted directly at the low-cap plans most people are on.
DE -- What are the barriers to switching when that means taking customers from Bell or Rogers?
MG -- A big part of that is just dealing with setup costs, sending techs back out a second time, dealing with customer premises equipment like modems and stuff like that. These all affect costs, especially with students. As for perceptions, as I think you highlighted on your blog, TekSavvy's the unknown, the untested...
DE -- And people say they'd rather put up with abuse from Bell than take a chance on TekSavvy. How do you respond to that?
MG -- It's education, getting out there, being ourselves, pushing the barriers, doing what we've always done. You could have said, five years ago, who knew TekSavvy? Now arguably a lot more people know about us.
TF -- A lot of our very early customers are really big advocates of our brand, of who we are and what we stand for. That has carried TekSavvy a long way. And with social media, and the relationship-based digital age, that offers us a great opportunity.
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PS: One of the most interesting things I heard in our discussion was how the broadband demographic is changing. Remember all that talk from the Commission and the incumbents about bandwidth hogs, the small gang of heavy users who were spoiling the "customer experience" for everyone else? Well, as Tina put it, today everybody's a heavy user, the very outcome some of us were predicting two years ago.
Datapoint: Internet access gearmaker Sandvine reported just last week that 33% of all peak-time, residential downstream bandwidth in North America is accounted for by one firm: Netflix.
Oh yeah, and one other thing that resonated: TekSavvy's insistence on putting the customer first. How's that for cautious optimism?