Brand loyalty, boosted by deal with Millennium Dome, key in achieving industry-leading churn
O2 has claimed a large part of its success over the past 10 years can be attributed to the deal with AEG to have naming rights for The O2 in London.
The mobile operator signed a new decade-long deal with the global live entertainment company last month having penned an initial agreement in 2007 to have the former Millennium Dome in North Greenwich renamed.
Since opening, The O2 has attracted more than 60 million visitors with almost 20 million tickets sold for shows at the 21,000 capacity arena ranging from music to sport to live entertainment such as stand-up comedy shows.
The building also houses indigo at The O2 – a 2,800 capacity theatre-style venue and Building Six – a 3,000 capacity “superclub”. It includes space currently housing the ‘STAR WARS Identities’ exhibition.
Acts that have performed there include Bon Jovi, The Spice Girls, Beyonce, Bob Dylan, Prince, One Direction and Peter Kay. It has also hosted other events such as at the BRIT Awards, World Championship Boxing and the ATP World Tour Finals.
The venue is also home to 26 bars and restaurants, an 11 screen cinema complex and the roof walk experience, ‘Up at The O2’.
It has created over 4,000 jobs and delivers more than £500 million in annual economic benefit to the UK economy.
‘Brave and destructive’
Speaking at an event prior to the BRIT Awards at The O2 last month, O2 chief marketing officer Nina Bibby labelled its decision to partner with AEG as a “brave and destructive move”.
O2’s customer base has increased 43 per cent from 18.8 million to 25.5 million. She claimed the deal had played a pivotal role in that, with its loyalty scheme Priority vital. This entitles O2 customers to tickets two days before everyone else.
“We have worked really hard to make Priority the success it has been by making it relevant and meaningful in our customers’ lives,” said Bibby. “It’s actually not about marketing our products – it’s about unforgettable live experiences, interaction and free perks.
“Taking on the Millennium Dome as it was then and renaming it as The O2 a decade ago was a pretty brave and destructive move for us.
“In 2007, we had 18.8 million customers and fast-forward to 2017 and we now have 25.5 million customers, which is a 43 per cent increase. Back then, we had churn of 1.8 per cent and now that is at 0.9 per cent.
“I’m not saying the O2 is the only reason for that performance but it has definitely played a big role. We have worked so well as partners and that has led us to the success we have had.”
AEG Europe president and CEO Tom Miserendino and executive vice president of global partnerships Paul Samuels both praised O2’s decision to partner on the Millennium Dome, with the former labelling it a bold statement due to the negative stigma that was associated with the venue.
Samuels claimed the success it has achieved with O2 is even greater when this is brought into consideration and the reaction the move received from the live music entertainment industry.
Taking a leap of faith
“You have to go back 12 years to when we first negotiated the deal, to understand that a brand came in and took a leap of faith to take a partnership with a venue that was a white elephant, laughed at and what many people said was the biggest waste of money,” he added.
“O2 came in and saw it as a building site, deciding to work with a company in AEG.
“They knew we could deliver on this, such as with the Staples Center in Los Angeles and Mercedes Benz Arena in Berlin (which it developed and operates).
Overcoming the odds
“Everyone thought it was a crazy idea, from brands in the market, the press from a perspective of why we were doing this and that nobody would make the effort to go to East London to watch a show. I remember people in the music industry saying that nobody would go there to watch the BRIT Awards.
“Things have changed and that is because of our successful partnership with O2. In this industry, it is very easy for people to talk about partnerships – people will say we are partners and not sponsors. Often that isn’t true but here it is true. We are proper partners, we work together and we couldn’t have done this without O2.”