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7/29/2009
06:33 PM
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The Cell Phone Shortfall That Wasn't

Verizon just reported a big profit dip for the last quarter, and plans to cut 8,000 jobs. It's no news that companies are suffering in this rotten economy of ours, but am I the only one who was surprised that Verizon's results had next to nothing to do with cell phones?

Verizon just reported a big profit dip for the last quarter, and plans to cut 8,000 jobs. It's no news that companies are suffering in this rotten economy of ours, but am I the only one who was surprised that Verizon's results had next to nothing to do with cell phones?Specifically, the downturn was in Verizon's business landline operations, which employs more than half of its total staff (148,000 our of 235,000). Its wireless offering likely stole consumers from Sprint (which announced today that its subscriber list had shrunk yet again), and is valiantly doing battle with a better-armed AT&T (iPhone exclusivity, thank you very much), but the make-or-break profit numbers were determined by the landline requirements of business customers. For that matter, Verizon provides residential voice services to 17 million+ customers too, whether via copper or FiOS cables.

So how does this reality jibe with the company's branding?

It doesn't, even though it's all very clear in the mouseprint: wireless is a separate company under the Verizon Communications branding umbrella, so those TV spots featuring the geek in the big glasses promote only a particular chunk of the company's brand. The landline business is something different, and also somewhat quieter. And a lot less profitable. Yet it still occupies the time of more than half the people who cash paychecks with some iteration of "Verizon" on them.

I know that smart marketing folks have likely spent a lot of money and time figuring out which Verizon brand means what, and to whom. But I couldn't describe in a sentence what the company is all about, nor tell you what the underlying operations hoped to accomplish: most basically, the marketing communications fails to explain how the landline/wireless relationship works. Are consumers of the wireless brand being migrated to the bundled landline brand, or versa visa? Understanding this interplay seems like it would be far more important than promoting separate positions for each side of the equation, or promoting one over the other.

Because branding aside, the numbers always reveal what a business is really all about.

The media reported that Verizon delivered a bad quarter, with no fine-tuned branding distinction in the headlines. Now I know more about this company, even as I understand less about it.

Jonathan Salem Baskin writes the Dim Bulb blog and is the author of Branding Only Works On Cattle.

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