Death of a Brand

I remember in the late 80’s when Montgomery Wards was having financial problems. They embarked on an advertising campaign called “Brand Central” where the front entrance of the store featured the names of all the brands inside, prominently displayed. My first thought was, wow, Montgomery Wards must have NEGATIVE brand equity. They felt that their name was driving away customers, and instead they put up the names of their products. Montgomery Wards went bankrupt, as everyone knows, and now their former HQ in River North is a chic high rise called the “Montgomery” and hipsters hang out in the remodeled former catalog facility nearby, which has high end restaurants and a health club.

This sign, broadly defined, signifies the same damaged brand name – in this case, AT&T. Comcast is using AT&T as a synonym for poor service and high prices – assuming that leaving AT&T would be a “plus” for their customers. I won’t comment here on the irony of Comcast as the pot calling the kettle black…

The real sadness here is that in AT&T’s history they had one of the greatest brand comebacks in history. At one point in the early 20th century AT&T’s name was mud and they were in danger of being nationalized as a great monopoly. AT&T was reviled by customers as a robber barron. In an article in Atlantic Monthly (an excellent publication) titled “How Big Business Got a Soul”:

“Vail’s strategy was to launch the first, and perhaps the longest institutional advertising campaign of the twentieth century, in order to change AT&T’s corporate image from detested monopoly to servant of the people. In a series of monthly magazine advertisements in a homey populist style, AT&T defended its goal of monopolizing the phone system as a natural one, the necessary guarantor of “universal service” through a “single system.” Other ads followed, depicting heroic telephone linemen fighting blizzards, and comely telephone operators weaving strands of speech through “the magic loom of the Bell System,” to quote from the ad’s lush copy.”

Even today utilities (who are the heir to AT&T’s monopoly position) feature ads with the workers outside in the cold struggling to restore service after a storm. These ads are the direct heir to these campaigns, which were very effective in changing public perceptions.

When I was working in the utility industry we faced this challenge of sorts whenever the utility would attempt to sell “non-regulated services”. These services included energy management or other services for the home beyond basic power or gas service. The customers hated the local utility to the point where the name of the utility was a distinct detriment to business; in fact “anyone but the utility” was preferable. The utility managers, however, generally plowed on into these unprofitable businesses (which were mostly unplugged later, to use a bad pun), compounding their foul and negative brand recognition with a general ineptitude for non-regulated businesses. By non-regulated, I mean businesses where a profit was not guaranteed and customers have a choice of suppliers.

For AT&T, by contrast, the fall is compounded by the effort that they put into building a global brand. At least they can blame the government for a failed deregulation effort that was memorably spoofed (100% factually correctly, by the way) in this clip.

Cross posted at LITGM

4 thoughts on “Death of a Brand”

  1. Back in the 1970s on a trip to Europe and Africa, I was never more happy than to return to a telephone service that actually worked: AT&T.

    A lot of things have happened since then.

  2. I remember that back in the 80’s opponents of deregulation claimed the unrestrained AT&T would take over the world. Now, nothing remains of it save the name.

    Likewise, in the 1970’s IT&T (International Telephone and Telegraph) was likewise considered an unstoppable behemoth but today nothing remains of it save a chain of vocational schools.

  3. I agree totally about utilities. I live in Columbia, Missouri where we are being “serviced” by centurytel If they are not the worst phone company in the US it is only due to the extremely low quality of their competition.

    If you have any questions and I mean any, their trained staff is trained only to tell you to call their companies’ main office in Monroe, LA. Why can’t I get a dial tone after it rains? “Call this toll free number”. Does the dsl service advertised in your ads extend to my neighborhood? “Call this toll free number” I have lived in this house for 5 years so why am I still getting bills for the previous owners? “Call this toll free number” and so it goes on and on.

    The toll free number if you can finally get thru to them consists of some people who seem to be amazed that they actually work for a telephone company and their company is engaged in providing telephone service seems to a source of amazement to their own employees. Their thick Cajun accents are such that I often tape the calls to try to get a translation from a friend from Louisiana

    I am at the corner where 3 small cities meet but the only one of them I can call is the one furthest away from me. This has led me to certain actions that might seem rather strange to many people who are fortunate not to live in a area being “serviced” by centuarytel”

    I usually drive 13 miles to the cities business area to ask businesses directly about things rather than to call them.

    I normally buy as many items online as possible rather than buying anything local. It is usually easier to contact businesses in California, Florida or even Australia than to call local businesses in Columbia.

    I pay more for dialup Internet than I would for DSL service thru centuarytel. Because I know if I used centuarytel for Internet my last lifeline would be cut off as well.

    Friends that want to move here I advise not to live within this county but to instead to live in the surrounding counties in order to avoid being serviced by centurytel. If I wanted to move to any location having that area being “serviced” by centuarytel would be enough to persuade me not to buy a house.

    I have lived in many places in the US and I have seen that small esquimo villages in Alaska and rural farms in the South Dakota badlands have far better telephone service than this urban area in a growing state has available.

Comments are closed.