In a business as competitive as telecommunications is, and as important as churn reduction is, most service providers seem to rely on contracts rather than other “loyalty” mechanisms to hang on to their customers.
One might conceive of better ways to promote active loyalty rather than passive loyalty mechanisms, but one sees such efforts undertaken and implemented less often than might be desirable.
Most consumers are offered rewards for remaining a customer only when they threaten to leave. It’s a bit like punishing people during a relationship and then offering to relent only when the customer is about to leave.
Wireless service provider Cricket Communications (News - Alert), though, is piloting the company’s first loyalty program in the Houston market in preparation for a national launch. Instead of relying on the passive restraint of a contract with penalties for early termination, Cricket is rolling out an active loyalty program
The program offers any customer with longevity of six to 11 months $50 off the price of any new phone. Customers with longevity of 12 months to 23 months get a discount of $100 off the price of any new phone.
Customers who have been with Cricket for 24 or more months get the $100 phone discount plus one free month of service.
To be sure, other service providers offer ongoing inducements that, aside from enhancing new customer acquisition, arguably also represent some loyalty value. But firms rarely seem to promote the “rewards of being a customer angle.”
Access to public WiFi (News - Alert) networks now are being offered as an amenity for some mobile or fixed broadband plans. There are many takes on calling circle plans. But those features mostly are pitched as “buy us” features.
At least so far, there has been little attempt to create additional loyalty angles using those or other elements to directly reward customers for remaining. Verizon (News - Alert) Wireless has been offering limited-time inducements of this sort from time to time. But because these are not standing offers, one gets the impression they are made available only to renew a customer nearing end of contract, and not as a reward for remaining in the relationship. One might argue those two things are similar. Perhaps they are.
But such temporary inducements, though welcome, still can raise a suspicion that the provider “only cares about you when you threaten to leave.” That might not even be the case, but the way the inducements are timed can lead to that conclusion. Why not offer standard rewards programs, as many other retailers do?
Granted, handset availability, network quality and price remain the key drivers on the front end. Customer service can be important after the relationship is initiated. So far, though, one doesn’t see much effort to emulate the loyalty plans common in the airline or credit card spaces, where customers who buy more get additional rewards for doing so.
“Win back” programs, which belatedly attempt to get a lost customer back, or “save” programs, which offer potentially deserting customers incentives not to leave, are helpful. But they also will lead to customers wondering why those incentives were not intentionally built into the relationship to begin with.
That’s a mistake. Even the incentives come with a nagging suspicion that the carrier was not being such a great provider to begin with.
Gary Kim (News - Alert) is a contributing editor for TMCnet. To read more of Gary’s articles, please visit his columnist page.Edited by Marisa Torrieri