Diego Scotti, chief marketing officer of Verizon, discusses transforming -- and sometimes even scrapping -- a brand name

By Ryan Knutson 

In just over two years as Verizon Communications Inc.'s chief marketing officer, Diego Scotti has overseen some big changes in how the company approaches consumers. Mr. Scotti, who previously served as the marketing chief for J. Crew, was Verizon's first outside hire ever for the CMO role. He spoke with The Wall Street Journal about how the more than 100-year-old company is trying to appeal to the next generation of consumers. Following are edited excerpts of the conversation.

Staying relevant

WSJ: Tell me about how you arrived at Verizon.

MR. SCOTTI: The first time that I talked to [Verizon CEO] Lowell McAdam I said, "I'm not a telco person, so why would you want somebody like me for this role?" His explanation was that our brand and our company are going to go through a big transformation. We really need to work on creating an emotional connection with our customers -- current and future ones. Because as our industry gets more commoditized, if we don't take that step, we won't be as successful. And in order to do that he wanted to bring in somebody who has other experiences, not only the telco industry.

WSJ: Tell me about some of the company's recent changes.

MR. SCOTTI: Part of Lowell's vision was that as we start thinking about the next-generation customers -- that being millennials or Gen Z and whatever is coming next -- we need to ensure that we are very relevant. And in order to do that, [being simple, personalizable and reliable] becomes really important.

So when we heard that our service plans were not simple, we got rid of all our plans, and decided to do small, medium, large and extra large. The same way you buy your T-shirts, now you can get your plan. That's something that people understand. A lot of people say that I did that because I came from J. Crew and all I do is think about T-shirts. That's a little simplistic, but whatever, it works.

The new My Verizon app was a tremendous innovation for us. Because we said we're going to take the current app that we have, and we're going to, like, burn it. And we're going to start from scratch. If you're going to create the remote control for your plan, what would it be? For these younger consumers who are dealing with brands like Uber -- you can't separate the app and the Uber service. The service and the app are the same thing.

What millennials want

WSJ: What do millennials look for in a cellphone carrier, and how does Verizon figure that out?

MR. SCOTTI: There is this misconception that millennials are this very homogeneous group. That they all look, feel and act the same way. I think you can't make that assertion about any group.

We know this based on analytics and customer data: that there are plenty of young people out there who want quality. For these folks, the phone has become an intrinsic part of their lives. They put their phone in the context of, "My phone is everything to me. My phone is the remote control for my life. The phone is my life." And because they are always on, they want to make sure that they have the best.

These folks say "I want the best. I want the fastest speed, I want the best video quality and I also want solid customer service." And I don't mean customer service in the sense of calling and talking to somebody, but, "I want the support that I need when I need it."

When you start talking about young consumers, or millennials, there seems to be this understanding that there's only one way of addressing the needs of millennials, and that is: Everything is free, everything is cheap, and everything is a bunch of young folks jumping around in a commercial with some type of very energetic music. And that's a gross oversimplification.

In our industry, that has caused a little bit of a race to the bottom: Let's see how free free can be. Let's not put emphasis on the quality or the experience, but on how free that experience is. But if somebody is looking for quality across a lot of aspects of their lives, then wireless is not different.

Tackling video

WSJ: Your go90 video app is in a totally different position in the market than Verizon. You've got something that's trying to appeal to young people and doesn't have much brand identity yet. How do you approach that?

MR. SCOTTI: You want to create brands that have strong appeal with consumers. So we do a lot of consumer research, talking a lot to consumers, and trying to understand the essence of those brands. So not just put a name on there and then launch it.

But second of all, what does it take to create a brand? I'm not just talking about putting a lot of advertising dollars to put a name out there. But especially in this day and age, it's how it's going to connect with consumers in their lives.

WSJ: So what is the pitch for go90 then, in its essence?

MR. SCOTTI: What go90 is trying to do is to be a distribution platform for amazing mobile-first content. And that's something that doesn't really exist in the marketplace. We talked about the short-form, bite-size content that every millennial loves on YouTube, for example -- what's the HBO-quality equivalent of that? That doesn't exist. So a lot of the work that we've been doing is to say, OK, let's bring that quality and appeal to this new generation.

WSJ: It doesn't carry the Verizon brand.

MR. SCOTTI: No, because we thought that it was a good way to create this separate brand that would carry its appeal on its own.

One stop, not one brand

WSJ: How does it all fit into the bigger challenge? You mentioned that one of the pressures coming on the telecommunications industry is the commoditization of it. It's been something that telecoms have always been struggling with since the dawn of the iPhone, of not being just a dumb pipe. How does that influence the broader strategy that you're trying to unveil with go90 and your Hum technology for drivers and the marketing?

MR. SCOTTI: There is definitely a perspective that says that we want to be the one-stop shop for our customers across the digital world. But that doesn't mean you can do it with one brand all the time in all cases. In this day and age it's not like that.

WSJ: And the logo change was trying to be a friendlier appearance?

MR. SCOTTI: Friendlier, and also our logo was 15 years old. It was just looking tired. We had so many different iterations of the logo that this was a way of appealing to the next generation of customers. Simplifying. The check mark was signaling this notion of reliability.

Mr. Knutson is a Wall Street Journal reporter in New York. He can be reached at ryan.knutson@wsj.com.

 

(END) Dow Jones Newswires

February 21, 2017 02:48 ET (07:48 GMT)

Copyright (c) 2017 Dow Jones & Company, Inc.
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