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Adding more incentive to BYOD customers


Userlevel 1
1. I love the 10% Tab credits 2. However, as is the wireless buying trend that still remains in this country, customers still value the initial expenses over the long term. for example: just like with phones, where customers would rather not pay $600 outright for a phone, but rather commit $80+/month and spend more; similarly: BYOD customers save an additional 10% on top of the savings over other companies, which works out to be a significant saving in the long-run. However, the initial cost of terminating their contracts is so high they fear leaving right away and don't do the math of staying and being fleeced, or leaving at a premium and making the money back. I personally have friends who are itching to leave and come to Koodo, after they saw me take the leap and that I am infinitely happier now (<3 KOODO), but their cancellation fees are keeping them paying over $80/month. My suggestion: Offer BYODs THREE options, instead of two: 1. The standard Tab 2. The (now) standard 10%/month billing credit OR 3. An outright credit balance of up to $100-$200 to help make up for cancellation fees from other carriers' contracts. With Option 3: a) Proof of Cancellation within the last 2months need to be provided b) Proof of Joining Koodo and that you did NOT take Option 1 or 2. c) The initial savings attracts those people I spoke of d) Yes, the initial hit on the company profit is substantial, BUT, just like with phone contracts, the long-term revenue is better to the company. I am thinking of the benefits in terms of (i) new customers who (yes, come in and get $200 bill credits, but) stay for several years vs. customers who don't switch over at all because of termination fees. (ii) long term, it's cheaper to dish out one $200 credit to a new customer, than 10% every month indefinitely I am not an economics major, but I do believe the numbers are on my side. Thoughts?

9 replies

Userlevel 7
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So are you suggesting a $200 credit for ppl porting from an existing account with another company to Koodo as an incentive to switch that will ease their cancellation fees from their former carrier?
Userlevel 1
Paul "Kid Android" Deschamps wrote:

So are you suggesting a $200 credit for ppl porting from an existing account with another company...

tl;dr: yes. exactly that. Kinda like what Wind did a few months back
Userlevel 7
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Paul "Kid Android" Deschamps wrote:

So are you suggesting a $200 credit for ppl porting from an existing account with another company...

I really like the idea and think it would definitely bring a lot of customers to Koodo who would love to leave their current provider but can't justify paying the cost of leaving. A credit making their first few months free definitely would help justify an early termination of their present contract to come to Koodo.
Userlevel 1
Paul "Kid Android" Deschamps wrote:

So are you suggesting a $200 credit for ppl porting from an existing account with another company...

They did that already. I guess it gets expensive though because I haven't seen them repeat it. http://mobilesyrup.com/2012/09/26/koodo-mobile-goes-after-wind-customers-offers-up-a-200-credit-if-they-switch/
Userlevel 1
Paul "Kid Android" Deschamps wrote:

So are you suggesting a $200 credit for ppl porting from an existing account with another company...

Oh yeah, I remember that... Although, I was referring to all carriers, not just WIND
Userlevel 7
Badge +4
Paul "Kid Android" Deschamps wrote:

So are you suggesting a $200 credit for ppl porting from an existing account with another company...

oh ya I remember that, they must have obviously tried it and it cost them too much or didn't meet what they expected. I still think it's a good idea as I don't see $200 of service costing them actual money like if they were giving away phones.
Userlevel 5
While I don't think this is a bad idea Mo doing some math I think the numbers probably aren't on your side. Lets say the average Koodo bill is $50. So you would get a $5 BYOD discount each month. In order for that to balance out with the $200 you would have to use Koodo services, without changing devices (assuming you use the tab and are no longer eligible for the BYOD) for over 3 years! ($5*40 = $200) Sure it creates more buzz in the short term and maybe gets more people to come over but that is a huge amount of money. Say you get 1000 people to switch in the first month you offer this promo... thats $200,000 of lost revenue (vs $5,000 of the 10% discount people), assuming that stays the same for the full year and suddenly you've lost $2,400,000 in revenue (again vs $60,000), and this is assuming positive word of month doesn't increase the amount of BYOD activations each month! Now there's a lot of assumptions in that math, and again I agree it's a good idea. I can't see it flying especially not as a long term offering.
Userlevel 5
Jorden wrote:

While I don't think this is a bad idea Mo doing some math I think the numbers probably aren't on ...

Also I realize I didn't factor in the continuing $5 per month in my yearly calculation, but knowing it would take 40 months to loose the same amount of income I feel it would have a negligible effect.
How about just carrying the 32 and 64 gig iPhones? That would have been a start...

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