Thursday, July 20, 2006

Dumping Unprofitable Customers

Cingular has an entire theorum - complete with fancy metrics charts and cold calculations - on how to determine "customer value".

3 comments:

Jake of All Trades said...

It's weird how the approach seems misguided. Understand and agree (to a degree) that it's a business and you reward your more profitable customers, but the positioning here is based on a weird sort of anarchy. "Nobody gets upgrades unless we're playing favorites."

Think the poison could go down a little better with: "Everyone gets a free upgrade every X years with a contract renewal of X years, and we'll bend the eligibility rules for the more profitable customers."

AngieDawn said...

You know, the way that the cell phone indstry works is interesting. I've heard that in some countries, good cell phones are cheap or free - to encourage customers to depend on them. This keeps the technology moving forward, and the cell phone companies in business. I'm not sure of all of the details, but this definitely *seems* like a good business model.

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