Optus ditches animals in favour of new brand

Optus' changes to its marketing strategy and mobile phone plans don't appear to be for the better.

Andrew Mudie

Andrew joined the growing team of Motley Fool freelance writers in mid-2013 following years of personal development as a passionate self-taught sharemarket investor. At the time, Andrew was an engineer by trade, writer by hobby, and an investing nerd by passion who spent far too many breaks reading, writing and learning. Andrew’s first investing lesson came with his first stock selection in 2011 when takeover rumours caused a spike and subsequent plunge in the share price of Woodside and then the 21% fall in the market through mid-2011. The next four years of investing saw Andrew dabble in a vast array of strategies until settling on his favourite investment methodology, which is closely aligned with that of the Motley Fool: Fundamentals-based long-term buy-and-hold of great companies at great prices.

Published June 28, 2013 9:00 am AEST

Optus this week announced changes to its marketing strategy and mobile phone plans starting July 1. While the new company mascot is puzzling, the most significant part of the announcement was the details of the new phone plan allowances.

Optus, owned by Singtel (ASX: SGT), was quick to outline the benefits to customers — reducing bill shock by giving more warning when approaching monthly limits and reducing penalty rates when allowances are exceeded. Optus acknowledged that the changes would have an effect on revenue in the short term, but would result in a more "loyal" customer base.

The investment and technology press were fast to point out that while the plans reduced penalty rates, they also reduced the data allowance on most plans. The $30 and $35 plans have been abolished in favour of an entry-level $50 plan and higher level $60, $80 and $100 plans.

The plans are now similar to those of Telstra (ASX: TLS), and are far more expensive than the offering from Virgin and a number of online-only alternatives such as Vaya Mobile and Live Connected who repackage the Optus network. With switching costs low once off contract, it's difficult to see the plan working for Optus in the short to medium term.

Additionally, Optus has replaced its animal-based marketing strategy with a new character named 'Ollie'. It's not immediately obvious what 'Ollie' is, however a number of forums have taken Optus to task, wondering if its new target demographic is lovers of Fisherprice toys.

Foolish takeaway

Optus has made a number of changes to its marketing strategy and mobile phone plans. The phone plan changes are a negative for customers and the new corporate mascot 'Ollie' appears an odd choice at first glance.

Only time will tell whether the changes will result in consistently higher profits and more loyal customers for the company, but price increases will force Optus to face direct comparisons with Telstra's superior network.

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Motley Fool contributor Andrew Mudie does not own shares of any companies mentioned in this article.

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