Retention. What a Concept!
I remember the not-to-distant past when most wireless telecoms gave all their best deals and service to new customers and didn't pay much attention to existing customers. It was all about acquisition; achieving critical mass. But as churn rates grew, so did the recognition that retention might actually be a good idea. Most of the rest of us already seemed quite aware of the adage that it costs less to retain customers than to acquire new ones, understanding that companies need to balance acquisition and retention -- emphasizing each as appropriate over time, but not sacrificing one for the other.
As a T-Mobile customer I've noticed this change over time. I remember when I wanted to purchase a Treo, but the company wanted to charge me $300 more as a long-time customer than it was charging new customers. After an email to the head of marketing for the U.S., asking if he would be willing to spend $300 simply to keep his existing phone number, I received the "new customer" price within 24 hours. However, the pricing for the non-squeaky wheels did not change. What I noticed was that a new explanation of the pricing appeared on T-Mobile's site shortly after my experience. Fortunately, T-Mobile now has significantly more customer-friendly pricing that seems to recognize the value of its existing customers, which I happily discovered when opting up to a BlackBerry.
Verizon Wireless is also taking steps to be more customer-focused. In our INSIDE 1to1 newsletter we discuss how the company is loosening its grip on customers by prorating early termination fees and is adding a new loyalty plan to reward such behaviors as paying bills online. It seems that the new approaches aim to engender trust and build long-term loyalty. Industry watchers expect competitors to follow suit.
I say that this is just the beginning for an industry that, more than most, must continually strive to offer new and better products and services to customers to engage them, grow them, and keep them out of reach of the competition. What do you think of Verizon Wireless' approach?
