Penalized for Loyalty

I have been a loyal subscriber to Sprint for my (once) cellular and (now) digital/mobile/smart/PDA phone service for almost ten years now. And what do I get for sticking with them all this time? How about being charged 3 to 5 times more than a new customer for the same phone. Yes, that’s right. If I become a new subscriber to Sprint, and agree to a two-year service contract, I get one price. If I simply upgrade my current phone, while agreeing to the same two-year contract, I must pay substantially more.

So, if I understand their pricing strategy correctly, their priority is to acquire new customers, not retain existing ones. Wait! Let me rephrase that. They have a retention strategy in the form of locking software on the phones (so I can only use my phone with them) and cancellation fees.

Oh, yeeaaaaahhhhh…I’m feeling the love.

I’m sure this is not isolated to Sprint (in fact, there have been several stories in the past related to this and similar issues, such as this one that appeared last week). And some providers have taken the occasional step to actually treat customers as customers and not indentured servants. Still, cell phone providers price as though they are a virtual monopoly.

When an organization establishes a pricing plan that includes a variety of restrictions, they are essentially saying that they do not have enough faith in their product or service to give people the freedom to take their business elsewhere. If I am free to leave, yet choose not to, there is a reason why and an investment I will make to keep it that way.

While consumers typically want to spend little and get a lot, they will, for the most part, pay a fair price for a quality product or service. Your pricing strategy must reflect your actual quality, delivery and customer service as well as what you think of your customers. When you try to fake it, customers will leave, and people will write nasty stories about you.

See my other two posts about pricing, The Pricing Game Part 1 and The Pricing Game Part 2.

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