Journal: News & Comment

Monday, November 14, 2005
# 2:24:00 PM:

Farewell, Telus, you blew it

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Telus free iPod nano offerI've had my ADSL high-speed Internet service from Telus, our local former telephone monopoly, since 1998—which was as soon as the company was able to roll out its first unadvertised semi-beta-test service to my neighbourhood. Despite occasional early-adopter service bugs, it's generally been pretty reliable and I've been happy with the service.

I signed up in '98 as soon as I decided to ditch my old dialup account from the University of B.C., I've never had any kind of term contract, and have paid month-to-month for more than seven years. For high-speed home Internet, that's forever. I've stuck with Telus high-speed Internet through thick and thin for as long as it's existed, under no financial or contractual incentive. That makes me the definition of a loyal customer.

Losing a loyal customer in two steps

And now it's over, because Telus blew it. It's not about price, since I can get comparable deals from Telus and its major competitor, Shaw cable Internet. It's not about the technical details of the service itself, since I've found my available bandwidth, bundled adjunct services, and reliability just fine with ADSL. It's about how Telus has treated me as a customer for the past few months, and more specifically, two things:

  1. In the summer, Telus unilaterally and extra-legally blocked me and other Telus customers from seeing websites that made threats against its employees who were crossing picket lines during its (still continuing) lockout of unionized workers. Shaw and other customers were not affected, and a mirror went up soon enough, so Telus's tactic didn't work, set a bad precedent, blocked hundreds of other sites as collateral damage, drew extra attention to the site in question, gained it bad publicity around the world, and pissed me off. I also wasn't satisfied with the response from Telus head office, though I give them props for being quick to phone me back.

  2. More recently, until the end of the year, the company is offering new ADSL customers a free 2 GB iPod nano for signing up to a three-year term at a monthly rate similar to, or a bit less than, what I'm paying now (two- or one-year terms will get you an iPod shuffle, but I already have one of those). Notice that's new customers. I phoned up to see what better offer Telus has for existing, loyal customers like me.

    Guess what? Nothing.

    The phone reps I spoke to, Lori and Abdul, told me that Telus will give me the same pricing as for new customers, but that I'm ineligible for the iPod, or any equivalent offer. Now, I know from my own experience in sales and marketing that a new customer is much, much, much more expensive to acquire than an existing customer is to retain. But what Telus is saying here is that they're willing to increase their already-high customer-acquisition cost by the $250 or so an iPod nano runs, but that they're not willing to incur a similar expense to keep an already long-standing customer like me.

Preferring expensive and fickle over cheap and reliable

Both Abdul and Lori, although likely not part of the regular phone sales workforce because of the continuing lockout, were very polite and helpful, and I had almost no wait to talk to them. They did, however, seem rather powerless. I spoke to Lori first, and as soon as it was clear what I was asking for, she passed me to Abdul, since she presumably had no authority to go outside the standard new customer sales script. I assume that Adbul has more latitude, but he said quite directly that he could do nothing, that the acquisition strategy came "from Marketing" and that he had no way to offer me that iPod. He also added that a customer-retention campaign is in the works, but wouldn't be coming out until "the spring."

I should also add that, at no time during my seven years of Telus ADSL service have I received a notice offering me similar pricing to what new customers are being offered. What I mean is, unless I actively looked for deals by monitoring advertising campaigns and websites, I would probably still be paying the same high early-adopter rates I started with back in 1998, and thus would have spent hundreds or thousands of dollars more than someone more vigilant—or someone who just signed up.

So Telus takes existing customers for granted, and would rather have expensive, fickle new customers than reliable, cheaper, loyal old ones like me. Someone who's just moved to B.C. and never had a phone or Internet service here gets good pricing and a free iPod. Whereas I, who's had a Telus landline phone of my own for almost 20 years, a Telus mobile phone for eight, and Telus Internet service for nearly that long—and has thus spent in excess of $15,000 on basic services in that time—gets (by default) worse pricing, and no iPod, even if I ask nicely.

Who made this decision?

If I'd been in charge of this offer, I would have done it this way: some time (maybe two months) before offering new customers the free iPod nano, I would have offered existing customers the same deal or, even better, either a better iPod, or the same iPod and better term-limited pricing (say $5 off per month for six months), or some other cool thing (a Sony PlayStation Portable, a free new cell phone if you have Telus cell service, early admittance to Voice-over-IP service, whatever). Importantly, I would not think about making this sort of offer six months later.

I would also regularly make such offers to existing customers: "You've already been with us for two years: just commit to another two and we'll give you discounted monthly pricing and this cool gadget too!" As a customer, I would have signed up right away to that kind of offer. In most competitive markets (restaurants, grocery stores, gas stations), regular customers get the bonuses, not the shaft.

As it is, my conclusion can only be that Telus's sales and marketing strategy is just dumb, operating in the long-gone legacy of a former monopoly. And aside from being cheesed off about new customers being treated better than I am, I don't want to be a customer of a company that misunderstands its business so badly.

Will it be worth it?

So I'm going to talk to Shaw today, to see what kind of offer they can make me. I know the pricing and service will be at least as good as that from Telus, even from the websites alone, and maybe Shaw can sweeten the deal further. Once that's settled, I'll call 's friendly phone reps back and arrange to cancel my ADSL service. In the longer term, I'll be looking seriously at replacing my landline phone with VoIP and moving to another mobile carrier when that contract expires too.

Importantly, after hearing from me about this, my wife is looking at moving to another carrier when her Telus mobile phone contract expires soon. My parents are thinking about joining me in moving to VoIP telephone service, maybe not immediately, but not far off. When my daughters are old enough to have their own phones, right now I think I'm unlikely to get Telus service for them.

Had Telus shown instead that it got the new competitive telecommunications landscape, by treating me and my family as valuable customers worth keeping, it would have been in line for tens (or maybe hundreds) of thousands of dollars of further revenue from us during the rest of our lifetimes. Now its share of our communications dollars is likely only to decline from that baseline, possibly to zero.

Will that have been worth the $250 savings, I wonder?


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