After spying a gap in the market for more ethically-run telephone services, Vivian Woodell set up The Phone Co-op, the UK’s only phone, mobile and broadband provider owned by its customers
Good Business is a column hosted by Anna Levy from HUB Islington, an incubation space for socially driven entrepreneurs. Each month she catches up with the people leading change.
Anna: Hi Vivian, how did you get involved in the co-op movement?
Vivian: I got involved with my local co-op supermarket in the early 80s in Oxford. I was fascinated by the fact that there was this large operation that was different from other organisations. It was owned by ordinary people and was supposed to be run in their interest, but it actually seemed to be run by a small, fairly visionless clique.
They hadn’t done anything about member recruitment in years. There were few tangible member benefits, for example, and little desire to talk about what makes co-ops different in any coherent way.
I felt that this was a business that had lost its way. When you went back to the root of it, these were such powerful ideas, but they hadn’t been updated. A few of us formed a group to push a different view, and we got elected.
How did you shake things up?
Working with new management, we started experimenting with ways of presenting the co-operative message in a modern way. I always felt that when you walked into a co-op it should feel different from other supermarkets. We created a concept store promoting things like Fairtrade, supporting local producers, and the fact that it’s owned by the customers.
How did The Phone Co-op come about?
I later got involved in co-operative development in central and eastern Europe, following the fall of the Berlin Wall. During this time, we had very high phone bills and so I looked for an alternative supplier. I got curious as to how the market worked and realised that there was an opportunity for us to become our own supplier, forming a co-operative with other NGOs who, like us, had expensive international phone bills.
We quickly evolved to include residential customers and the wider business community, and that was the origin of The Phone Co-op. We’ve grown every year and now have 23,000 customers and are celebrating our 15th anniversary!
How does it work?
What we’re doing is proving that an alternative economic model can be successful in a mass-market industry and that it’s possible to run a successful business that is centred on people rather than money. The members elect the board so it’s ordinary customers who run the show.
As well as paying profits back to members, we fund the development of new and growing co-ops, treat our staff fairly and cut our carbon footprint by avoiding cars and flying. If our staff want to cycle to work, we’ll buy them a bike! Things like this demonstrate that we mean what we say.
What do you think are other market opportunities for the co-operative movement?
There are many opportunities. Consumer co-operatives work well where there’s a long-term relationship between a business and its customers, and also where trust has broken down with the major players in an industry. The energy market is an example of this. People feel there’s an oligopoly of large suppliers making profit at the expense of customers who can’t afford to pay their bills.
How do you go about competing with the big phone companies?
Four big brands dominate the residential market, so we recognise it’s hard to be heard. We couldn’t afford to advertise in the way that they do, so our solution was to adopt The Co-operative brand, which is owned collectively by the movement and trusted by the public. In addition, we work with around 200 affinity partners, mainly charities and campaigning groups, who promote us in return for a share of revenue.
How do you balance staying true to your values while making the business commercially viable?
I think everybody faces these challenges, but we don’t have to see them as being in conflict. People want to buy from businesses with values. When we’ve surveyed our members, the thing they put top of their list is that we treat our staff well.
The Phone Co-op has a nice feel to it – we’re all members together. When a customer rings up and speaks to someone here, they’re talking to another member. They know that when they pay their phone bill the money is shared out fairly between stakeholders and they know we’re doing our bit for the environment. I remember receiving a cheque once where someone had written on the back – “I like paying you!”