Telecom's new logo loses its gloss

Dr Paul Reynolds has been I'm sure reluctantly dragged in front of the media to try to stem the current Telecom reputation hemorrhage. The significance of the damage the XT problem has caused is highlighted by his on camera presence. This is not a small issue, in fact it has and will do Telecom severe long term damage. But let's have a quick look at why they are or at least should be in panic mode.

Telecom is an oligopoly and as such can do pretty much what it likes without suffering any immediate major fallout even in an instance like this. Everyone just gets grumpy; Telecom tells everyone they are sorry, in fact if they use the CEO that should let everyone know they are really, really sorry. It is what I call 'brand chauvinism'. Other large institutions such as banks often display this same attitude. If everyone in the business (and let's face it there are only a few) all behave in a similar way then what options do consumers really have; bugger all!
The effort required to switch and the prospect of really getting a better deal creates a kind of 'brand atrophy'; "better the devil you know than the one you don't".
In effect Telecom has 'brand frenemys' rather than brand loyalists. Now Telecom know this and they can leverage the fact to their advantage

They will just try to see this one through and wait for the dust to settle, let it blow over. So what's the problem?
It is two-fold. The damage that has been done is not that apparent at this stage. It is a type of internal market hemorrhage, no one at this point can see it. What has happened is that no one trusts Telecom any more and trust is a vital component in a brand relationship. We have all seen evidence of this phenomenon in our own human relationships. Some one lets us down...they say they are sorry and we tell them it is OK and doesn't really matter, but inside we are angry and disappointed. That feeling stays with us and colours future decisions we make relating to this person.
Telecom have just made a lot of people angry and they won't forget it. Telecom's apology is weak and will be perceived as insincere.
Consumer's future decision making about all Telecom's products and service has now been compromised.

The other problem Telecom has is politicians. Telecom is dependant on 'other important relationships' if it is to have a secure and profitable future. Politicians are swayed hugely by public opinion. They will see this market disaffection and when the time is right they will leverage this to maximum effect. When it happens Telecom will be gob smacked...wondering why no one likes them.

Telecom is struggling now on three fronts:

1) It has an aggressive 'advertising strategy' but no 'brand strategy'...now why might that be? One look at the board structure and you will have your answer. Telecom director and Saatchi & Saathci CEO Kevin Roberts in his recent book 'Lovemarks' only emphasised how much he is addicted to advertising and how little he understands branding. Mass advertising has built consumer expectation (expensive, excessive skiting) and it is not a good look. So it is no wonder there is a back lash particularly from the media...anyone who skites can expect the same treatment.

2) Telecom has handled the network failure appallingly. There was a chance had they done a good job at fixing the problem (and I don't mean just the technology) then they may even have won over some advocates but they have failed.

3) No evident brand strategy. With their new paintwork seriously dented they have made their future just that bit more fragile and uncertain, something no doubt they will expect consumers will simply pick up and pay for. What they will find however is that things are different and chauvinism is a burden not an attribute. They will need to shift their efforts from peddling products to building customer relationships. How will they do that?...they should go and ask Steve Jobs.

Maybe it is time for a brandnew new logo?