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Preempting cancellations

Posted by Michael Bloch in ecommerce (Tuesday May 6, 2008 )

I have a love-hate relationship with my telco. Whenever I move house it tends to be hate as they invariably screw up service transfers in every conceivable way. But I’ve recently fallen back in love with them for their expensive, yet incredible wireless broadband coverage; speaking of which, I had an interesting call from them about the other day.

I needed to hook up to wireless broadband as I’m spending increasing amounts of time out in the Aussie bush. It’s an amazing experience being miles away from mains electricity and water and 30 miles from even the nearest gas station or convenience store, yet cruising the web at broadband speed.

However, as mentioned, it’s expensive. I signed up for their top plan as I’ll be needing the bandwidth with working online full time, but I haven’t used all that much of it in recent months. A couple of days ago one of their reps called me and said they’d noticed I wasn’t using the full quota and asked if I would like to downgrade to a cheaper plan.

Huh? What the hell was this insanity from a company with greedy shareholders? Or was it perhaps just good business?

Usually when a provider comes up with a cheaper plan that may be of benefit to some existing clients, they don’t tell their clients who are under the old pricing about it for fear they’ll downgrade and then they’ll lose the cash.

The problem is, sometimes those people get so peed off when they see a cheaper plan being advertised, they cancel their service out of pure disgust. They can (incorrectly) feel it’s a provider’s responsibility to let them know about the new choices. Another scenario is where the client doesn’t see the cheaper plan, but notices a competitor with one and just switches without even re-examining other options their current provider offers.

It’s a tough call for a merchant to know what to do. What my telco did certainly increased the warm and fuzzy factor (for now) and I was truly appreciative of their contact about it. The aspect I still haven’t figured out is the fact they have me locked into a contract for the term of my natural life anyway – well, it feels like it. They really didn’t have much to gain from this seemingly generous offer. Perhaps there’s a gaping loophole in my contract they’ve discovered. I must check :).

Anyhow, if you’re a provider of online services about to launch a new, cheaper range of plans, give this aspect some serious thought. Letting your existing clients know about your new range *may* also be an opportunity to retain more clients and build rapport with them; and a good relationship leads to word of mouth referrals. Take a look at your cancellations in recent months and see if price is a major factor. If it repeatedly shows up as a reason, chances are you have a stack of customers who feel the same and may already be looking around for alternatives. You may be able to stem the exodus.

Speaking of which, the telco I use for wireless broadband is Telstra. There ya go Telstra, as the old saying goes, no good deed goes unrewarded.. or is it unpunished? I forget.


1 comment for Preempting cancellations
  1. Hi Michael,

    I too swear by my Telstra Wireless Broadband card. It’s not the cheapest card on the market, but the coverage is brilliant. I have used it without problems on the outskirts of Wodonga, in Canberra, Melbourne and travelling at 110km/ph on a bus between Melbourne-Canberra. Fast and fantastic.


    Comment by Clayton Wehner — May 6, 2008 @ 8:50 pm

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