Originally published by the Wall Street Journal
When a big company starts running ads attacking a smaller one, it’s kind of a backhanded compliment. On one hand, it lends legitimacy to the smaller company’s efforts. On the other hand, it’s the kind of attack that requires and immediate and effective response.
That’s the situation Alo Communicaciones of Spain ended up in when Telefonica, the largest telecommunications company in the country, launched a new ad campaign. In it, a new company is trying to solicit a person’s business. The person asks questions such as what would happen if there’s a problem with the line, which the new company representative in the ad could not answer. The obvious implication is that switching from Telefonica is a dangerous decision that could come back to bite a customer if there’s ever a problem.
For a smaller upstart company, finding an appropriate response is difficult. How do you convince people that there isn’t an inherent risk in changing to a new company when the opposition is going out of its way to claim otherwise? “Those ads were designed to put fear in people, and their ads are totally misleading” said Alejandro Rivas-Micoud, Alo CEO. Telefonica is required to give technical service for all lines in Spain, regardless of what network the call was routed through. As such, the answer to “what happens if there’s a problem with the line” is, in actually, the same as if the person remained a Telefonica customer.
Alo’s eventual solution was to run commercials with the same actors that customers recognized from the Telefonica ads. This gave them the opportunity to debunk what they believed to be misrepresentations. Using the same elderly lady as in the most recognizable of the Telefonica ads, the representative explained to her that her service was guaranteeed regardless of the carrier. The lady then happily switched to Alo.
The ads made quite an impression — especially on Telefonica, which sued Alo claiming misrepresentation and dishonesty in the ad campaign. However, the judge saw things in Alo’s favor, and found that Alo was not misleading or dishonest in its campaign. The actors did not have exclusive contracts with Telefonica, and Telefonica wasn’t even referenced by name in the Alo ads.
Alo has been adding 2,000 new customers a day and has reached half a million customers in less than 6 months. Clearly, the message is getting across.