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Have they heard of cheaper to keep customers than find new ones?

Member

Pretty basic comment here. Instead of offering the new customer promotions to current customers, therefore keeping them satisfied and not leaving, they will let a known 20 year + customer leave to give great deals to the unknown customer. I know they all do it, but have they not heard of keeping great customers? It goes against every sales principle out there. 

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Re: Have they heard of cheaper to keep customers than find new ones?

Sr. Leader

@bkahn wrote:

Pretty basic comment here. Instead of offering the new customer promotions to current customers, therefore keeping them satisfied and not leaving, they will let a known 20 year + customer leave to give great deals to the unknown customer. I know they all do it, but have they not heard of keeping great customers? It goes against every sales principle out there. 


Let's see, VZW has ~100 milllion customers. The average customer gets a new device once every 2 years, which works out to ~50 million customers getting a new device a year. Let's say an average device cost of $500 and let's say 50% discount($250 off of a $500 device) on the cost of a new device. That works out to an ANNUAL cost to Verizon of this "existing customer discount" of 12.5 BILLION dollars. If you want Verizon to give a bigger discount, that cost just increases.

Now lets compare that to the annual churn rate industry wide of 1% to 2% or 1.5 million customers out of 100 million customers. This "new customer discount" works out to an ANNUAL cost to Verizon of 375 million dollars or about 3% of the cost of a similar "existing customer discount"

Since 98% to 99% of Verizon customers stay with Verizon when purchasing a new device it is MUCH less expensive to Verizon to offer new customers a better discount than existing customers.

I don't think your argument makes much sense. For the cost to Verizon of an "existing customer discount" to be about equal to what it cost Verizon for a "new customer discount", the discount offered to existing customers would have to be about 3% of the discount offered to new customers. This is calculated with 50 million existing customers getting new devices every year vs 1.5 million new customers getting new devices every year. I don't think you would be very happy with that sort of discount($15 off the price of a new $1000 iPhone).

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Re: Have they heard of cheaper to keep customers than find new ones?

Customer Support

Hello bkahn,

 

Your 20+ years of loyalty have meant the world to us. We have many great promotions available to all of our customers. Sometimes, these promotions require adding a new line of service to qualify. Others require trading in a specific device. What phone are you interested in purchasing? What phone were you planning on trading in?

 

ChristopherM_VZW

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