Reward your customers and save your reputation, the O2 way
June 10th, 2009
Apple
Britain is a country with little focus on customer care. In fact for many UK businesses rewarding customers for their spend and loyalty appears to be an after thought. Rarely do companies invest in their customers so to get them to do the ‘word-of-mouth’ sale on their behalf, which as we know is the best endorsement and way to get new customers in.
Just look at UK mobile phone operator O2, which yesterday released details of it’s pricing policy for the Apple’s much anticipated iPhone 3GS, over which it has exclusive UK rights. The sting wasn’t the 18-month fee of between £96 and £274 depending on your tariff, but the cost for current customers who signed up for the minimum term this time last year. Existing customers were told that they would have to pay for the remaining terms of their existing iPhone 3G contracts, which could be anything over £150. All very different to when O2 offered a free upgrade from the first iPhone to the current hand-set.
You would have thought that pricing policy for such a desirable product would have been developed whereby existing customers aren’t made to feel hostage. In fact, the sweets have been offered to new customers while existing ones are being ignored. A big mistake given that many O2 iPhone users have turned against the company, complaining not just about its pricing policy but it’s lamentable 3G nationwide coverage, to name but a few points.
You wonder why the company didn’t think of empowering its customers with new models so to reward them and encourage them to further promote the company and brand to others. Blogs though are being written picking on all of O2s issues, working to dissuade customers from switching to a company that cares little for their users.
The #O2fail hashtag and Twitition on Twitter have over 2100 people signed-up. And the blogosphere is certainly working hard to knock O2 where it hurts. The media is also running stories, with The Daily Telegraph and Sky News highlighting the concerns from loyal customers.
As it stands and having set a populist precedent with the free upgrade between the first and second generation iPhone O2 have a lot to do to stop the steady stream of complains. It takes a lot to build a reputation and it looks like they’ve forgotten the golden rule of ‘looking after our customers’ first.
Tags: #o2fail, apple, brand, iPhone, loyalty, mobile, o2, pricing, reputation, rewards, telecomms
Hi there
I support your cause, even though I'm out of contract (having bought a PAYG 3G iphone a while ago, and used it on T-Mobile)
However, I don't see people backing this up with numbers which are there.
I think the SIMplicity (SIM only) £20 tariff is directly comparable in quota terms to the £35 iPhone tariff. That essentially means you're paying £15 extra a month for the phone.
Therefore, to get out of the contract, I expect it would be reasonable for O2 to ask for an extra £15 x remaining months, so they don't lose out on subsidy. For many early adopters this would be 6x£15 = £90
However, they are asking for 6x£35 = £210!! A premium of £120 over and above the actual subsidy.
So when O2 say "look, we can't just cancel the contract early, we can't afford to lose subsidy", they are BLATANTLY lying.
Unfortunately, I've not seen anyone say this to O2 on Twitter.
Also, a lot of people are support O2 (why, are they lawyers?) because they believe this is only about subsidy. It's NOT!
Spread the truth!
Marcos
As far as I know, the SIMplicity tariff is calls and SMS only. O2 charge extra for data, and the iPhone has all-you-can-eat data, plus visual voicemail. As iPhone users are big data consumers, I suspect that the £29 a month contract is pretty good value, in terms of what O2 normally charge, and that there isn't much slack in there.
What I do think though is that iPhone customers are likely to turn out to be pretty loyal, given a good deal, and churning (and the discounts they have to offer to attract new customers) must be an expensive business, in comparison to giving potentially loyal customers a bit of a break.
Perhaps they could offer us the option of extending our contract by 12-24 months, rather than paying our way out early and starting again?
Personally, I'd rather just be able to pay what the hardware is worth and keep my current contract. I'm planning to buy the PAYG iPhone 3GS and use my current monthly SIM.
I'll subsidise with the sale of my existing 3G, and in 12 months time when Apple update again, I can just upgrade (and sell the 3GS for a further subsidy).