Broadband Companies Conditioning Customers To Be Disloyal
from the not-great-for-growth dept
While the press has talked up the supposedly "low" prices of DSL these days, it continues to be very misleading. First off, the rates are "promotional rates" that only last for a short while and then go up. They also usually require something else to be bundled (i.e., you don't get cheap DSL without a phone line, and you don't get a cheap cable modem service without cable TV). However, there's another side to it that people are beginning to notice. Since the rates are often promotional for new customers, they actively encourage churn instead of loyalty. We're still surprised to see more industries don't recognize the importance of rewarding loyalty. The cost of customer acquisition is quite high. But, instead of looking at ways to keep existing customers happy long term, paying off the investment in acquisition, these companies are taking their existing customers for granted, always focusing on the number of "new additions." It's a short term view that could mean long term trouble... should there be enough competition to merit it. Unfortunately, the competition right now is so weak, that it's a case where the "churn" is just back and forth from bad to worse and back again -- each time with the companies paying the acquisition costs yet again (and never really getting the long term payoff that a loyal customer would provide).