802.11me

WNP: Finally, It's Customer Loyalty Time

Fact, churn costs the mobile operators loads of money. Fact, Wireless Number Portability is going to increase churn, first on the date that it goes into effect, and then on anniversaries of that date if the operators revert to contracts as a way of locking in customers. Isn't it about time that the operators stopped trying to use legal and technological means (eg, locked phones that can't port between networks) to stop churn and started thinking about some serious customer loyalty programs? Although Cingular's Rollover plan is an ok start, but just an ok start.

No, what the operators need is a real loyalty program. One that would make any avid device junkie or bargain hunter think twice when a competitor announced a new subsidized device or tacked on a couple more zeroes to the number of minutes per month included in your 39.99 base price.

I think and hope that WNP will force an innovative operator, if they really want to do something about churn, to come up with some sort of credit card program. Frankly, it would make the most sense for verizon to team up with Capital One or MBNA to offer some sort of "charge all you want and talk for free" program (ok, that's not the exact campaign, but you get the idea). Why not? the pitch to verizon is, look, we're going to lock in customers for you because they will build up literally months worth of services from you that aren't transferable to other operators. The pitch to the customer is "you use this card enough and you could just about have a free mobile phone", and the pitch to capital one...well, that's obvious. Can the value proposition between verizon/capone work? yes, no problem, run the numbers and it easily works. How would the passthroughs or savings work? who cares. Obviously, that's important, but you could do anything from the first usa visa - united airlines model, where first usa buys miles in bulk at a discount and then allots them to spenders to some sort of other more technically integrated approach.

Bottom line is, with WNP, it's time to really start thinking about a world class loyalty program that will drive dollars to the bottom line through reduced churn.