Alejandro Rivas-Micoud

In marketing, getting a message across is often more important than how it’s gotten across.  This is doubly true for newcomers into a given market, which not only have to make themselves look good but also overcome the public inclination toward the status quo in the process.  People are averse to change, and when you’re in the business of changing people’s minds, it’s important to understand the minds you intend to change.
Such was the case for Alo, the renamed Spanish division of American telecommunications company RSL Communications Ltd.  Alo was attempting to penetrate an already saturated Spanish market in which there was an ongoing battle for supremacy.  Initially this was a problem.  Companies such as Telefonica that had an established reputation and customer base were difficult to compete with.  After a failed attempt at interconnection with the telecom giant, Alo did some market research via surveys and focus groups.  They discovered that without major incentive, people were inclined to go with whatever company was familiar and convenient. That was bad news for Alo, especially since other competitors were already saturating the market with discounts and advertising.

The first and most obvious way that Alo could stand out among the crowd was through price.  Alejandro Rivas-Micoud, Alo’s director general, surmised that a small cut would not have the impact they were seeking.  Other telecommunications companies of the time were already offering significant cuts from the prices of Telefonica, the long time dominant provider for the region.  A larger, more more noticeable price difference between Alo and its competition would be necessary for them to achieve the type of penetration they sought.  In the end, they decided to put their low overhead to work for them and charge half the price of Telefonica.

Certainly a price difference that large would attract attention, but would it attract long term customers? Rivas-Micoud knew that other competitors were winning customers with style and image as much as with price and service.  These competitors also were offering discounts on Telefonica prices and had the benefit of more time in the market to establish their names.  Alo had no such luxuries.  Perhaps more importantly, during research it came out that people were doubtful of the price difference.  Why was Alo able to price itself so far lower than the competition?  In order to be successful, Alo would need to overcome this consumer skepticism.

Rivas-Micoud, born of a Uruguayan and an American mother, drew from his heritage and experience.  He traveled to the United States often, and people would often ask him to buy things for them while he was there since they were cheaper in the States.  As this seemed to be a common belief.  The people of Spain seemed to accept that things such as clothes and electronics would naturally be less expensive from the U.S.  With that realization, he began to apply this concept to Alo’s marketing campaign.

Alo would use American imagery, art, music, and an America referencing slogan — USA Solutions — to make a connection with the minds of the public and its existing concept of quality American services at a low price.  The slogan also created interest by referring to the status quo of existing prices as a problem in need of solving, something of a call to arms for the complacent.  “USA Solutions” doesn’t explain the entire reasoning for the price difference, but it does deflect skepticism enough to draw a lot of extra interest.  The plan was received well, and results began pouring in immediately.  Call volume to Alo’s call centers nearly doubled after the campaign was launched.  The connection of USA and its reputation for inexpensive products and services played a large part of getting Alo into Spain’s telecommunication game for good.