Do bundled contractual models bring future success ?

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…

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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.

  • Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others, fueling growth.
  • Passives (score 7-8) are satisfied but unenthusiastic customers who are vulnerable to competitive offerings.
  • Detractors (score 0-6) are unhappy customers who can damage your brand and impede growth through negative word-of-mouth.