What kind of crazy tech industry do we have where companies make work for themselves at the same time as making customers unhappy? And you can bet that the mobile industry is the worst offender of all. Read on for a few experiences, thoughts and links.
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Read on in the full article. You've touched on one of the many idiocies of the mobile industry in this country. Unfortunately, NO network treats existing customers as well as new ones, and there's a simple reason for this - network figures are still calculated on new signups, not renewals. A renewal is worth nothing to a network (you're there anyway) whereas a new customer is worth at least 18 months new or extra revenue.
I recently had a similar argument with my provider. I wanted a "new deal" which they were refusing to offer me, at a cost to them of ?0 per month.
I pointed out that all I had to do was to port my number out to a virtual network (one which runs on their real network); cancel my contract with them at no cost to me as I'm out of minimum contract; then 2 weeks later come back as a new customer and get the exact same deal I was on, plus the extra new deal, PLUS a new phone (for free), and port my number back in to their network. The cost to them for me doing this would be over ?00. The cost to me, ?0 per month.
They pointed out I'd loose X, Y & Z discounts. I pointed out that as a new customer I'd get A, B & C discounts, plus they'd give me a phone worth over ?00 for free, which I'd then ebay; more than covering the difference in cost between the X,Y,Z deal and the A,B,C deal, even when calculated over an 18 month period!
Needless to say, I didn't win, but I did get their CS managers to agree the current situation is ridiculous. Even when a new customer costs a network more money than an existing one, the new customer will always win, due to the "signups phenomenon". I'm not sure that's true. Most net work execs have churn (a measure of the percentage of customer base lost) as a negative kpi.
The thing that drives this behaviour is that most consumers still don't leave the network. Faced with the prospect of having to cancel a contract and sign up for a new one most people will just take the path of least resistance. O2 give the same deals to existing customers renewing as their new customers. Its a fine line for them, attracting new customers and keeping old ones. That said, when I phoned up to change to Simplicity, they actually told me I'd be better off on an even cheaper contract, so sometimes they're their own worst enemy.
Tom I've just asked for my PAC so I can move from Orange to Three. I had been happy with Orange, but am moving for a better mobile on a much cheaper tariff. Maybe its just where I worked, but I am pretty sure that most folks will churn when given the chance.
Aside from the acquisition-only focus, I have seen some numbers that indicate that if everyone got the new customer deals, [this specific carrier] would not make any money on any of their subscribers. Hard to say its true or not, as even internally there are fourteen ways to cut the data, but its compelling enough that no one messes with the model.
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