In the pursuit of new customers, wireless companies forget their existing ones [telecom]

I think it's right there in the final four words that you're going wrong.

(And the same reaction would apply if you left out the word "telecom"].

I took a look at my contract with Sprint, mine are up in January of

2011, but if I want to upgrade my phones I can do it next month without changing my contract date, so the new one would end in January 2013. Same cost as if I had waited until January of 2011. I have been a customer of Sprint for many years, even though I had worked for a competitor. They have always worked with me and at times let me know that the service I had; minutes in a month; with more then I needed and my costs them went down, I now work for a company that is a major contractor for Sprint, they let me know about an employee discount plan that gives me 15% off my bill each month and another 15% off off any thing else I buy from them along with any rebates or other discounts given. I just got a Overdrive 3G/4G router, the plan is really great, unlimited 4G data and 5 Gig 3G which is more then enough, works on any CDMA network and no roaming charges.

You're absolutely right. But there's no *growth* if all you're doing is keeping existing customers. Growth comes from attracting new ones.

New ones don't attract themselves, it takes big bucks and good incentives to attract them. But existing ones? They're with you already, and they won't leave unless they're too peeved for words ... and even then not, more often than not. So, to your question,

I suspect the answer is, "Because, more often than not, that customer *won't* be strolling out the door after all." :-)

Cheers, -- tlvp

-- Avant de repondre, jeter la poubelle, SVP

John as I live in the UK, I don't know the market positioning stance taken by the various US mobile operators, but I suspect that what you may be missing are the other costs that the telco is potentially avoiding (or has avoided) by letting you go.

High volume low value transaction processing firms don't care about individual customers - doing so costs too much money. Customers are a statistical set and outliers are a cost to be avoided. Customer service is designed to satisfy the majority and resolve common problems (see how easily the supermarket gives you your money back if a product is faulty).

The telco (at some point) makes/made a call about the degree of flexibility it wants to build into its transactional processes & systems. The more flexible the systems and processes are the more expensive they are to develop, operate and maintain. Increased flexibility means more sophisticated (=expensive) training for the front line operators and their supervisors, and more complex(=expensive) management controls and audit systems to minimise fraud and errors.

More flexibility equals fewer lost customers, less flexibility means more lost customers.

The equation becomes one of trading off, for each class of flexibility, the potential number of customers who will be retained by the capability vs the cost of implementing that capability.

A telco that decides to go for the "high volume/low cost/low price operator" model will probably choose to lock down the flexibility its systems and processes afford to front line staff to keep the cost of the process (both development and operations) low. As a consequence they will expect to lose customers whose requirements fall outside the very narrow set that they wish to offer - they are assuming that their set meets the needs of a high proportion of the market who will be attracted by the resulting low price.

A telco whose brand positioning has a higher service component will make a different call and your requirement may fall inside their set.

For whatever reasons, your needs fell outside the set of things that your operator wanted (was even capable?) of providing - you therefore fell into the set of customer they were willing to see leave.

Its not evil, or stupid, just a decision call for their business portfolio managers. You may feel they are making a bad decision, but in the end they will survive or fail on what the statistical mass does.

On Thu, 09 Sep 2010 22:11:00 -0400, John Mayson wrote: >>>> ... I would have to think it's less >>>> expensive to keep existing customers than attract new ones. >>> You're absolutely right. But there's no *growth* if all you're doing >>> is keeping existing customers. Growth comes from attracting new ones. >>>

The companies had better treat their current customers, because when they do leave they take all their business, but many of their friends,

A week or so AT&T had major problems in the Yuba Foothills east of Sacramento, they were either telling their customers who had called there was not problem or failed to follow up. What made it really bad was there wee a bunch of fires burning and First Responders had major communications problems with their AT&T phones. My Sprint phone and router worked fine as did my company Verizon phone. From all the chatter I saw on the local web page, AT&T lost a lot of their customer base up there. It turned out to be a Hardware problem at a main cell site and the parts had to come from out of state, and the techs either had to come from Reno, Nv. or Sacramento to fix it. At the least AT&T should have told their customers what was going on, but from what was said the customer support; at least first level was overseas.

When I have problems with Sprint or my DSL or wireline I make sure I make the calls during the day, that way I'll get a US tech support site, but at least with DSL I have a special number to call which gets me to a NOC center for employees a can locate the problem fast and right where it is located.

For possible future reference for mobile subscribers who may wish to play hardball with their arrogant carriers, what's the least costly way to use number portability to "park" your mobile number elsewhere and come back as a "new" subscriber to take advantage of incentives denied to existing subscribers?

In the face of arrogant mobile carrier policies towards existing loyal customers, the "take your ball and go home" strategy may be the only effective way to deal with these louts. Also, sometimes speaking directly with carriers' "retention" departments can yield positive results when nothing else works.

-Ed

***** Moderator's Note *****

You could buy a per-minute phone from Virgin Mobile or similar provider, and use your current number there, and then ask your former carrier for "winback" deals. Be careful, though: they pay close attention to billing addresses and similar info, so you'll have to do it _for_ _real_ to make it work.

Bill Horne Moderator

Because that customer will be back later on when they have an even lower rate than the folks that the customer has moved to.

It used to be that few people had cellphones, and providers made money by signing on new customers. These days, the market is saturated and almost everyone has a cellphone. So providers make money by signing on their competitors' customers.

Keeping their own customers? Who cares about them, they'll probably leave anyway. Poaching customers is so common and so blatant that it has become expected.

--scott