Don’t Penalize Your Customers For Loyalty!

I want to buy an iPhone 4S.  Verizon Wireless is making it very difficult for me to do so.

First off, I am a longtime BlackBerry user.  But RIM is a dying platform (I don’t care what anyone says, they are – you know it and I know it so shut up) and it’s time to get something else. I haven’t found a Droid I like yet, and so it seems like a good time to get an iPhone. A new model just came out last week!  Consider it a tribute to Steve.  Whatever. I want one.

Now, I have been a VerizonWireless customer for at least eight or ten years.  I have a family plan, and I’ve never had fewer than three (and sometimes as many as five) numbers on my plan. I have smart phones and data plans. Always signed up for the two year extensions.  Never once paid late. My monthly bills run well into three figures.  I put friends and family members (who are not on my plan) on Verizon so we’d all be on the same network.

Any other marketing-savvy industry would consider me a VIP customer – worth keeping happy and hanging on to at almost any cost.  This is where you get your brand evangelists, after all.

But not Verizon Wireless. And, to be fair, pretty much all the carriers operate the same way. Because it’s a royal pain in the ass to switch carriers; particularly when you have multiple lines, they figure you have a higher threshold of pain for any little price gouge they can stick you with.

My current plan is up for renewal on February 4, 2012.  But I would like to get my new phone now.  I can go ahead and upgrade now, but if I do, Verizon wants to charge me something called an “early upgrade fee” to do so.  If I wait until February, I will supposedly get a “loyalty discount” in an unspecified amount, and no “early upgrade fee.”

(I’m willing to bet that the loyalty discount probably only consists of NOT charging the early upgrade fee, but I won’t know until I get there. Which I probably won’t.)

I’ve had this argument with them before. Their position is that they gave me a discount on my phone, and need to penalize charge me this extra fee for “breaking” my contract (even if by breaking I’m actually signing up for another two years)

This is wrong on every possible level. Any other industry would be shunned like pariahs if they tried this bullshit. So why do we let the carriers stick it to us this way?

The iPhone I was planning to buy is listed at the “discounted” price of $399 (yea I was going for the full 64gb version)  They’re also getting my phone & data plan for two years, and those of my family. We’re talking mid four figures by the time all is said and done.

The “early upgrade fee” they want to charge me is $20.00.

I abandoned the cart.  I won’t pay it.  It’s not like I don’t have the $20, but it’s the principle of the thing.  By the time they have my $400 and my plan and my data and my family  for two more years (which by the way never comes even CLOSE to using the minutes we purchase every month) they have MORE than made back their money on my upgrade. If they haven’t, they don’t deserve to be in business.

But no, they have to stick it to an existing customer in good standing. For $20.  If I had a client that practiced this kind of behavior – well, I wouldn’t have that client.  They’d be fired. Even if you convince people to pay the “loyalty tax” – they’re not going to feel good about you as a company. They’re not going to recommend you to their friends and family. And as soon as ever a better choice comes along, they will leave you so fast it will make your head spin.

The icing on the cake today was the response I got from their service account on Twitter – @VZWSupport. I tweeted out my frustration, and they replied to DM them with the details and they’d set it up so I could order online without having to pay the fee.  But they wouldn’t follow me. I pointed this out, and again got another response telling me to DM them with the details.  BUT THEY DO NOT FOLLOW ME.  So I can’t DM them.

At that point, they offered to call. But I’m busy, I’m at work, and as I have often said (and advised my clients) if I have to pick up a phone to complete an online order, you’ve lost me as a customer FOREVER.

And finally they just reiterated that the early upgrade fee was a PENALTY for wanting a new phone and new plan four months early.  Well excuse me.

So Verizon has lost me (and my family) forever. We’ll be going either AT&T or Sprint. I have no doubt they won’t treat us any better when it comes time to upgrade.

For God’s sake, we’re the customers. How do they get away with treating us this way? Who else does this?

10/12/2011 UPDATE:  Verizon contacted me via Twitter (and email and called my Blackberry!) to offer to remove the “early upgrade fee.”  I accepted, and then they found out they couldn’t do that, but they could credit my regular bill.   So I ordered my iPhone 4S.  However, I still think the principle stands – if your loyal customers are trying to GIVE YOU MONEY and want to commit early to TWO MORE YEARS, you should be falling over yourself to acommodate them. You shouldn’t have to go all netmeg on their ass over twenty bones.  And one of these days, some wireless company is going to realize what a HUGE weakness this is in the competition and what a HUGE opportunity it is to stand out in a crowded (and well branded) space, and they’re gonna drive a truck through it.  And I will be first in line when they do.

  • http://www.neurosciencemarketing.com/blog/ Roger Dooley

    Some things never change: How to Increase Customer Pain (Sprint, 2007).

    Nice that they followed up the ecommerce fail with a social media fail. Should have called them on the phone and gone for the Fail Trifecta!

    Roger

    • netmeg

      Yea, but I shouldn't hafta call 'em on the phone – I *hate* ordering over the phone; I'm busy, I end up on hold – it's the whole reason I buy online in the first place.

      (I saw what you did there! ork ork)

  • http://keepkalm.com Kyle Alm

    In theory customers should be rewarded for their loyalty, not for being willing to switch carriers. They must only be concerned about sales numbers and not retention.

    It makes no sense that a new customer gets a better deal than an existing one.

    • netmeg

      That's the business model all the phone companies use. It reminds me of Lily Tomlin's Ernestine. "We don't care. We don't have to. We're the phone company."

  • Jobi

    Well, T-mobile is just as bad. If I want to upgrade my phone (a Blackberry, and yes RIM is dead), I would have to pay a full price as existing customer, despite the fact my contract ended a year ago. So I will probably switch to Verizon to get my iPhone 4S. T-mobile will lose my next two years at about 150 a month. Just because they won't give an existing customer the same deal as a new customer. Bass-ackwards.

    • http://netmeg.com/official-bio/ netmeg

      Yea, I'm pretty sure they all do it. And the dopey thing is, it's a completely backwards business model, but because they all do it, we're all stuck. If I wanted to gain market share, the first thing I'd do (as a wireless company) would be to reorganize that bass-ackwardness.

  • Nick Dean

    It seems like all verizon wants is ur money when it should be about making your customers happy, they're trying to charge me $360 for a canceling and going to sprint when my contract was up six months ago.