IN A WIRELESS MARKET crowded with canines (Fido), assorted other creatures (the bugs, birds and lizards of Telus; Bell’s beavers) and the big red machine (Rogers), Koodo’s multicolored leg warmers and goofy re-creation of “The 20-Minute Workout” stand out.
Deliberately positioned as a low-cost, no-frills wireless brand, Koodo invites customers to trim fat like excess applications, features and contracts, from their wireless service plans – and therefore their monthly bills.
Launched just over a month ago, Koodo has been hard to ignore with its kooky name and weirdly funny ad campaign (seriously, where’s Olivia Newton-John and ‘Let’s get Physical’?) which doesn’t mention that it’s a division of Telus. The brand is actively distancing itself from its mother corp. (whose phones, profitably, feature a lot of those fatty features), says 34-year-old Kevin Banderk, whose title is “Chief Koodo Officer” because “there are no executives at Koodo,” said the press release announcing “figurehead” Banderk.
What follows below is an edited transcript of a recent chat with Banderk and Cartt.ca editor and publisher Greg O’Brien.
Greg O’Brien: Now, there’s a bit of a trend with Solo, Fido and know Koodo. What’s with the two syllables and the “o” at the end of the names?
Kevin Banderk: Completely coincidence actually, although we do like to laugh about it ourselves so…
GOB: Alright. Well, where did the name Koodo come from?
KB: What we were looking for was a name that was being straightforward and refreshing… a name that was a little bit fun to say, was unique and one which no one would have any pre-conceived notions about what we were offering with it. Nothing fancier than that.
GOB: Alright, well when compared to what else is out there, what’s different about Koodo than what’s already out there? What are you telling people?
KB: When we looked at creating Koodo Mobile, we really looked at what was it that Canadians wanted, and there was a large sub-segment of the group, of the population, that really was interested in just talk and text – a simple straightforward flexible approach to talk and text.
I think this market was underserved with the other brands in the marketplace, so we really focused on creating an offering surrounding them that really just focused on talk and text, but added a layer of flexibility that people were looking for. So, we talked with a lot of consumers and a story that struck a chord with me when we were developing this, was a 27 year old trying to figure out what he should do with his cell phone, (who was) just interested in talking and texting.
He built this huge spreadsheet to try and analyze different rate plans from all the different carriers.
GOB: That’s a lot of work.
KB: You know what? This shouldn’t be rocket science. If you want something that’s talk and texting, there should be an affordable, smart alternative – and that’s what we want to create. So, what we’ve done different is from a rate plan perspective. We have more of a build your own model where we have five base plans that give you different minutes, and then we let you create your own plan with add-ons.
(Customers) will be able to build it themselves based on their own needs and we give them the flexibility to change plans, add features, the pack features, whenever they want to, on our website for no charge. That provides a lot of flexibility because needs change and I think if you’re going around and shopping and trying to find that one rate plan, great. But if three months down the road now you need more minutes or less minutes or whatever the case might be you’re stuck a little bit and there may not be all the choices. We’ll give you value and affordability across the full suites.
GOB: And the tab concept?
KB: We’ve added the Koodo tab which is really the unique component that gives you the ability to get a phone for zero dollars.
GOB: Yeah, where’d you come up with that? That’s a concept I hadn’t heard of before.
KB: We’re the first ones to create it and it was really going back to trying to be transparent and straightforward and offer something that we thought was fair. So if there’s a phone and it costs us $150 or $125, we want to be able to give it to you for zero dollars like a lot of the competitors will do on a contract. But we also have heard the message of wanting flexibility… so we do that in a way that still met our overall needs and the customer’s needs and flexibility.
I think it’s resonating with a lot of folks that say okay I get it, the phone’s $125, I can put the $125 onto my tab, I walk away without paying anything. And every month we take 10% of the bill off the tab so it absolutely decreases. And if someone wants to leave, they can leave at any point in time. They don’t have to wait for a year, two years, three years. All we ask is they pay off whatever’s owing on the tab.
That also gives them the flexibility where they can actually accrue into positive points, and it then gives you the ability to get a new phone whenever you want – and to use whatever room is available on that tab.
GOB: What is your target market? What’s the demographic you’re aiming at?
KB: I’d say the core of our demographics is young adults who really want to talk and text a lot. It’s a key component of their communication needs. They may be interested and intrigued by some of the other features of their own cell phones, but they really don’t need them… It’s the stuff that sounds really good, but if you really think about it for a few minutes, you don’t really need it.
GOB: Nobody watches TV on their cell phone, for example.
KB: Exactly.
GOB: And I thought an interesting comparison today was that Bell announced HBO episodes on their cell phones, so…
KB: You know, it sounds really kind of interesting, but you don’t want to pay more for it, so what we’ve done is really cut out a lot of that stuff and in doing so created a lower cost structure and that gives us the ability to morph towards: “give the customers the just talk and text.”
GOB: And if you’re shooting for a low fee paying demographic, you’re not going to get them to watch TV anyway, because that’s what ratchets up your rates, that great big bandwidth consumption.
KB: And that’s why we’ve even gone into looking at how do we provide folks with a replacement or an alternative to their home phones. There are a lot of folks in that 21-30 demographic who don’t really have the need for the home phone, and they’d rather just use their cell phone.
GOB: My brother’s like that.
KB: Exactly. So we created what we call the “all you need combo” and really it covers 90-95% of folks – with 1,000 minutes, free incoming unlimited evenings and weekends for a $65 price point. If you don’t need as much as that, there are other price points as well. And we’ve married that with the best wireless long distance rates in Canada that compare to any of the landline providers, so it really gives you a true home phone alternative that folks are looking for.
GOB: What’s your handset selection like and what features do they have? Are there going to be different things where people can push the envelope a little bit in what they want to do?
KB: Sure. We have three different models, five different skus, so it’s two colors in the couple. We have the Samsung U410, Motorola W-385 and the Motorola KRZR. Our handset strategy is to offer good, straightforward devices that look really good, that people will be very happy and comfortable to use.
And they’ve been on the market for a good six months or so, so they’re not leading edge. They all have a camera phone. They all are Bluetooth enabled. So, it gives you all the services you need. You can talk, text, you can send a picture message if you really want to. We do offer ringtones and images, but it’s not core to what we want to do.
GOB: Are those music phones too or no?
KB: The KRZR technically is a music phone. If you wanted to load it and add music you could. We don’t offer it, but if you wanted to add your own, you could on the KRZR.
We don’t offer those extra services, because that actually adds extra cost – and then we can’t pass those savings onto customers at a more affordable rate.
GOB: So, you’re not looking to add the newest Blackberry to the Koodo lineup?
KB: No. We are really focused on communication so over time is e-mail something we may look at? Maybe, but not in the near future.
GOB: Given the target demographic, how are you going about marketing Koodo?
KB: What we’ve done is to leverage the ’80s workout craze and kind of spoof it to intrigue people to get them to relate to fat-free mobility and just talk and text. You know you don’t need any of the unnecessary features, and that’s really where the fat free mobility came from.
So, we have some TV spots, radio, in Metro and 24 of those papers, out-of-home, street car wraps and so on. So, it’s really focused. I would say our marketing strategy is where our demographic works plays with.
GOB: Any sort of non-traditional marketing thrust? Does Koodo have it’s own Facebook page or anything like that?
KB: We don’t have anything yet, but we are working on something there. We are very focused on online advertising as well.
There will be different things to definitely take advantage where young adults play and check things out so you’ll see bathroom ads advertising, you’ll see online we’re looking at some stuff with Facebook. We probably won’t touch MySpace now as it’s over and done with. And we’ll attract some attention through some viral things that are very interesting. Actually, a couple of videos have already popped up on YouTube without us touching it.
GOB: So, if you’re channeling the ’80s workout craze, you’re not going have Olivia Newton-John as your spokesperson are you?
KB: No… no Olivia Newton-John at this stage.
GOB: Now is Koodo considered a division of Telus, a different company with an MVNO?
KB: Technically, it’s wholly owned by Telus, but we operate very, very separately. So, a good proxy is very similar to an MVNO.
GOB: Okay, but it’s a part of the Telus umbrella, right?
KB: Yes… But we really are focused on being very separate. We have a separate team that works on marketing and pricing channel operations. So, one of the things we are trying to create and make sure that people know this is very different, very separate, because I think you know Telus is big enough that people have probably had some experience whether positive or negative with it.
We don’t want people to necessarily associate the two because they’ll have preconceived ideas. And we don’t want to misrepresent what Koodo is all about. So, we really try and stress the separation.
GOB: You’ll be staying away from the lizards and birds and that type of marketing.
KB: Exactly.
