AT&T Misses a HUGE Marketing Opportunity

The other day I received my cell phone bill from AT&T. This bill was for almost twice the amount that is scheduled in my plan. Obviously I was upset, but this post isn’t about that. It’s about how AT&T missed several opportunities to make money from me while also making me happy in the process.

Communication Breakdown, NOT!

The situation is a familiar one. Without realizing it, I used far more minutes than my plan allows for during the month (I had an unusual number of long conference calls). While working with AT&T’s Customer Service Rep to resolve the issue, I asked why I was never notified that I had exceeded my plan’s minutes, especially considering how massive the overage was. The Rep told me that I could request a notification email, but such an email would only be sent after I had exceeded my limit by one hundred minutes!

Furthermore, AT&T will not notify me when I am approaching my limit, nor will they notify me once I’ve exceeded my limit. Indeed, the only notification I’ll get is after I’ve already accrued close to two hours of additional charges billed at a significantly higher rate.

Regardless whether you consider AT&T’s failure to notify me a “shady” business practice, the one thing it wasn’t was a communications breakdown. It was a conscious decision made by AT&T because their calculations tell them that they’ll generate significantly more revenue by billing their millions of customers who exceed their limits every month at a higher rate. But at what cost?

Missed Opportunities

Clearly, there are massive numbers of people who get upset with AT&T when they receive their bills every month. Obviously, many of those people leave AT&T for another service as soon as their contracts expire. This is called churn and it’s a major loss leader in the telecom industry.

The following steps outline how AT&T should seize the opportunity to provide an important value-added service to their customers that would not only make those customers happy, but both reduce the churn rate and generate additional revenue.

  1. When a customer chooses their plan, they should be required to sign up for Usage Notification Messages via email, SMS, Twitter DM’s, Facebook, voice mail, smoke signals or whatever method they choose. Upon doing this, they have now Opted-In to receiving constant messaging from AT&T which, in addition to notifying customer of their current usage, could also be filled with special offers, coupons, etc.
  2. One or more of these messages could be a mandatory as part of the contract in order to guarantee that AT&T will be able to reach them with their message.
  3. The customer should be allowed to choose when these messages are sent, and their frequency. A typical messaging program could look like this:
    • Notification 1 – Approaching Limits (Optional): “You requested that this notification be sent to you when you are within XX minutes of your limit. If you would like to purchase additional minutes…”
    • Notification 2 – Limit Reached (Mandatory): “You requested to be notified when you have reached the limit of your contract. Any calls made beyond this point will be billed at XX/minute. However, you can purchase additional minutes at the special rate of YY…”
    • Notification 3 – Weekly Usage Report (Mandatory): “At the time that this message was sent (xx:xx:xxxx), you have used XX minutes out of YY minutes as specified in your plan. If you feel you may exceed your monthly minutes, you can purchase additional minutes at the special rate of YY…”

The benefit to AT&T is that they get a chance to offer the customer something of value while at the same time letting the customer know the status of their account. Their customers will be much more likely to read these messages because it keeps them informed as to how many minutes remain.

Is this simple, or what?

BTW, because AT&T realized they were remiss in notifying me that I had exceeded my minutes, they credited me back the overage. Thanks AT&T!

So, is this simple, or what? What do you think? Let me know in the comments.

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2 Comments

Filed under Marketing, Off Topic

2 responses to “AT&T Misses a HUGE Marketing Opportunity

  1. Khalifa Sangarie

    Neal, i think most of these companies do a loss-gain analysis before deciding on whether to notify ppl or not. Since $$$ is the bottom line, they seem to calculate the difference between what they gain from overage charges and what they lose to churn. It seems like this calculus is so far working in their favor (i.e. overage charges – churn = +ve). And since most ppl (myself included) just bitch about these charges, then pay the amount and later fail to move to a new provider at the end of the two year contract, they see no reason to change a model that seems to be making them tons of money, albeit irresponsibly.
    I believe the 100 minute mark is kind of a threshold, beyond which the overall overage-churn math results in or begins to approach a -ve (since more ppl will actually leave for not being able to pay or for similar reasons).
    This shows how we use knowledge gained from analysing data to make good, bad and plain ol’ dirty rules.
    I believe they figured you know too much. So they must have thought ‘Um, you know what, we might win some but we just lost one.’

  2. Pingback: AT&T Misses a HUGE Marketing Opportunity « The ODM Group

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