Today’s fancy and mostly used loyalty model in mobile operator world is bundled contractual models, which are including high-end smartphones and tablet PCs in order to attract customers by using easy payment terms and voice/data packages. This can be accepted as a good option for operators while competing with handset manufacturers in order to keep customers stick to operator’s brands, but I am not convinced if it is really useful for competing with other players those are in same arena; challenger mobile operators and internet/fixed line providers.
If we look at from competition perspective; every service provider can put a high end smartphone, data and voice services in a package with a good payment terms, so what else is left for make loyal their customer; only legally binding penalties! Do you think this is a sustainable model for a company? I don’t think so, because nobody likes to threaten by legal terms and penalties without having a real value offering in hand. And it is directly affect your Net Promoter Score (NPS) on bottom line, which is a fundamental indicator showing; how likely your customers recommend your brand to their social network and how much attractive your brand by new customers, which is directly related your business sustainability.
Have a look at the details how NPS is calculated, what are the important pillars in calculation and then reconsider that; your today’s earnings from contracted and ‘loyal unhappy’ customers are really bringing a bright future for your company or not.
I have my answer, and will try to offer some risk mitigation models for this issue in my upcoming posts…
Calculation/Definition Source: http://www.netpromoter.com
To calculate your company’s Net Promoter Score (NPS), take the percentage of customers who are Promoters and subtract the percentage who are Detractors.