T-Mobile Hopes Stock Ownership will Generate Long Term Customer Loyalty

by Matt Klassen on June 8, 2016

tmobilestockup-660x207Over the last several years T-Mobile’s revolutionary UnCarrier marketing campaign has turned the wireless industry on its head, attracting millions of customers to the nation’s third largest carrier in the process. But attracting customers is one thing, generating long term customer loyalty is something else entirely, so the company’s latest promotion is geared towards retention by quite literally investing customers in the T-Mobile brand.

As part of the latest round of T-Mobile’s UnCarrier campaign, the company announced this week that it will be handing out one share in the company to millions of customers, one actual share, and give customers the opportunity to earn more by referring family and friends to the carrier.

But let’s be honest here, earning a share in a company has none of the appeal of abolishing contracts, no overage fees, no roaming, zero-rated streaming video and all the other promotions, which is why the company is including a whole bunch of other free stuff along with it, like free ice cream, free pizza, and free Wi-Fi.

Anyone else get the feeling T-Mobile is quickly running out of ways to change the wireless world?

“This Un-carrier move is all about giving you good thanking!” CEO John Legere said in a statement. “No strings. No gotchas.”

The only problem with T-Mobile’s plan, however, is that shares are, by their nature, quite intangible to the average person: They don’t represent cost-savings, you can’t see the benefit of it on your monthly wireless bill, and your bank account doesn’t change, at least not in the short term. Even saying that T-Mobile’s shares are currently trading at $43.07 per share doesn’t really help make things any more real, because along with that comes the need to sign up for a free account with stock brokerage firm Loyal3, and you’ll need to pay a fee for selling that stock to actually get your hands on that money. Sure you can hold on to that share and “play the market,” but most people have no idea what that even means, or just how pointless that is with one measly share.

Of course to offset such intangible ownership in the company, T-Mobile has bloated the offering with a bunch of significantly more perceivable and material awards: a free Frosty from Wendy’s, a free pizza from Dominos, and a free hour of Wi-Fi during air travel through GoGo. Unfortunately when compared to previous paradigm altering promotions though, free pizza and dessert just don’t stack up.

Not to say that freebies and giveaways are bad, just that they’re not industry changing, they don’t solve customer problems (except maybe hunger) and they pander to the lowest common denominator, three things that don’t jive with T-Mobile’s overall UnCarrier strategy. UnCarrier is about solving extant problems in the wireless industry, not tossing people a treat and watching them slap their hands together like some trained seal (on second thought…).

To that end, there are many who now question T-Mobile’s ongoing market campaign, arguing that given the watered down nature of the last few rounds of promotions, perhaps the entire UnCarrier endeavour should be put to pasture…that or T-Mobile actually finds more ways to change things people still care about.

“It’s hard to avoid the sense that T-Mobile is running out of really meaningful things to do to attract new customers,” said Jan Dawson, an analyst for Jackdaw Research.

That being said, it’s clear what T-Mobile is attempting to do now is not attract new customers, so much as keep the ones they’ve already attracted, hence allowing customers to become a small part of the company. When people feel ownership, they’re more likely to remain loyal. But as I said, offering token shares may not be the best way to do that, and ultimately I doubt it will do anything to help T-Mobile’s long term retention rates.

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Written by: Matt Klassen. www.digitcom.ca. Follow TheTelecomBlog.com by: RSS, Twitter, Facebook, or YouTube.

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