In 1999, Nortel Networks found itself in a challenging position. On the one hand, the company was transforming itself from an old-line telephone equipment manufacturer to an Internet powerhouse. On the other hand, however, Nortel Networks lacked the “starpower” of its key competitors – Cisco Systems and Lucent Technologies. In the eyes of industry analysts, media, customers, and investors, the drive to build the next-generation Internet was a two-horse race between Cisco and Lucent: Nortel Networks was a distant third. Media coverage was weak, with Nortel Networks earning far less visibility than Cisco and Lucent. The company’s sales force was frozen out of the big deals, and investor interest was tepid.
Fundamentally, the challenge facing Nortel was a communications issue, and the company embarked on a major re-positioning program. Yet to be successful, the communications program would require a carefully crafted message, brilliant strategy, surgically precise execution, and frequent course corrections.
To ensure that the communications initiative achieved its objectives, Nortel Networks and Fleishman-Hillard developed an ongoing research program that guided communications at every critical point. From the development and pull-through of the message to the traction of each campaign, research ensured that communications produced the right results.
Position Nortel Networks as a leader in building the high-performance Internet – to drive sales and free untapped market capitalization.
Create a multi-tiered research program that:
- Identifies the attributes behind Internet leadership – to shape the company’s key messages
- Measures Nortel’s effectiveness in delivering messages in the media – on a global basis
- Measures the impact the communications program is having with key end-audiences, including “CXO” executives
Initial Perceptual Research
Conducted benchmark perceptual research of 150 industry analysts, business media, and CXO level executives to identify perceived Internet leaders and underlying attributes that make up Internet leadership.
Asked a series of aided/unaided questions: “When you think of companies that are involved in creating the next generation of Internet solutions, what companies come to mind?”
In addition, polled audience on specific possible elements that support above premise – to determine which specific product categories and corporate leadership attributes drive perceptual leadership in building the high-performance Internet.
Finally, queried respondents on their current communications relationship with Nortel Networks– to determine preferred vehicles and frequency of communication.
Initial research drove development of core message: “Nortel Networks is building the high-performance Internet that is faster, more reliable, and more profitable.”
In addition, initial research formed the basis for the communications program – key campaign initiatives, frequency of communications, even the language used within each press release.
Total budget = $170,000
Monthly “OTS” (Opportunities-to-See) Report
Nortel Networks and Fleishman-Hillard developed a detailed monthly analysis that tracks Nortel media coverage against competitors in key “Internet leadership” categories.
Coverage tracked/segmented globally, and across specific product lines.
Success measured both in traditional terms – number of articles – and in special metrics developed exclusively for Nortel Networks– “Opportunities to See” (OTS), a measurement that combines circulation, article placement, and message delivery into a single number.
Nortel Networks metrics measured against key competitors.
Results presented to Nortel Networks senior management to demonstrate program effectiveness, determine immediate priority areas, and assign budget resources.
Ongoing “OTS” measurement validated program and identified potential trouble spots before they grew out of hand.
Total budget = $200,000/year.
Annual Global Reputational Survey:
Building upon the initial perceptual research, Fleishman-Hillard conducted an end-of-year, in-depth survey of key audiences to determine how their perceptions of Nortel and key competitors have evolved.
Conducted 150 interviews of industry analysts, business media, and customers (current and potential) using a survey that sought both unaided and aided responses. Interviews were conducted in North America, Europe, and Asia.
Respondents queried in detail on perceptions relating to Internet leadership attributes, key messages, and product categories.
Results determined communications program effectiveness in driving lasting customer awareness and preference for Nortel Networks. Ensured tactical success (as captured in OTS report) drove lasting preference with customers, investors, and analysts.
Total budget = $270,000/year.
Measurement Of Success:
Position Nortel Networks as a leader in building the high-performance Internet – to drive sales and free untapped market capitalization
In January of 2000, 55% of those surveyed cited Nortel Networks as a leader in providing next generation Internet solutions. By September, the number had grown to 61%. Nortel Networks perceptual increase came at the expense of its two key competitors – Lucent and Cisco.
In 1999, after five years of revenue growth between 15 and 20 percent, Nortel Networks recorded sales of $22.22 billion, up 26 percent over the previous year. Nortel Networks annual optical sales grew by 80% in 1999, and doubled 2Q 00 over 2Q 99. In December, Nortel Networks surpassed Lucent as the leader in the burgeoning optical equipment market.
Nortel Networks market capitalization surpassed Lucent for the first time in February 2000, putting the company among the world’s most valuable companies.
Thirty-six of the 40 securities analysts who follow the company now rank Nortel Networks a “buy” or better. In 1998, only 25 analysts even covered Nortel Networks.
Nortel Networks was named one of the “Top 10 Stocks for the Next Decade” by SmartMoney magazine and named by Salomon Smith Barney as one of its “10+ Exceptional Names List.” These stocks possess solid fundamentals and growth potential in the year ahead, the company said.