Loyalty Programs: The Wireless Industry Could Be Onto Something Big

Androids and iPhones are not the only things that are new in wireless. Networks like C Spire and U.S. Cellular are starting to market themselves very differently to customers. They’re using rewards and loyalty programs, which may play a larger role in winning and keeping business going forward. Will Verizon, AT&T and Sprint follow?

C Spire just entered this space with a new program called “Percs.” The U.S. Cellular program is called the “Belief Project.”

This process is still in the early stages. However, if properly executed, it could turn out to be a very important customer relationship building program. The idea may be new in the wireless space, but it has been around for quite a while. Just look at airline frequent flyer programs, for example. Success depends how well the companies communicate with the marketplace and how valuable the rewards are.

Smaller Carriers, Bigger Rewards

C Spire was looking for a way separate itself from the competition. Looking for a way to get closer to the customer. To reward customers for bringing their business. To create an emotional connection with the company.

After the first two months, C Spire had already signed up 77,601 members; 5,143,011 Perc points have been earned so far.

Based on what I have learned about this program, C Spire could see quite a few of its customers sign up. Long-term customers already have valuable points. In addition, this idea could make C Spire very attractive to customers of other carriers in their market area as well. Could this turn into a real customer magnet?

What about the larger competitors? You would think this idea would spread, but not necessarily. Remember when AT&T Mobility (Cingular) hit a home run with its rollover minutes? We thought competitors would follow. They did not.

I think the big competitors like Verizon Wireless and AT&T Mobility will have no interest in following this path — at least, not yet. They build loyalty differently.

Sprint Nextel, T-Mobile and other smaller players are a different story. They stand a better chance. Don’t get me wrong — every carrier has something they call a loyalty program, but only a very few really stand out as valuable in the customers’ eyes.

Either way, this idea is very innovative for wireless. Rewards must be compelling. C Spire, for example, offers quite a few different rewards — like 10 percent, 20 percent or 30 percent off accessories; free shipping; free accessories with an upgrade; instant rebates on phones; $30 off the upgrade fee. This looks like a great start.

Poised for Takeoff

As one of only four U.S. carriers selling the Apple iPhone, C Spire has a unique opportunity and challange as it competes with AT&T, Verizon and Sprint Nextel. It must reach out to customers in new ways and explain why they’ll be better with C Spire.

This C Spire Percs loyalty program differentiates the company. The longer customers stay with C Spire, the more Percs they quality for. In fact, C Spire customers who have been with the carrier for five years already qualify for a high level of Percs, and customers who have stayed with the carrier for 10 years or more qualify at an even higher level.

A growing group of customers should really like these loyalty and rewards programs. After all, they want to have a closer relationship with the companies they do business with. They want to be recognized, respected and rewarded for their loyalty.

We’ll have to keep our eyes on this new area to see how successful it becomes. Will it turn into the next airline frequent flyer club? I’ll bet if you asked C Spire and U.S. Cellular, they would say yes. I wonder if they realize how big this could get if it strikes the right chord. and Time Warner to work with Sprint Nextel.

This move is a big win for Verizon Wireless, but it is also just as big a loss for Sprint Nextel.

What will be different going forward? Will the cable television industry be more successful in wireless going forward? Will this help Verizon with its spectrum shortage problems going forward? And what’s next for Sprint Nextel?

So, congratulations to Verizon Wireless and the cable television industry, and sorry to Sprint Nextel, which just got a helluva punch in the nose.

Jeff Kagan

E-Commerce Times columnist Jeff Kagan is a tech analyst and consultant who enjoys sharing his colorful perspectives on the changing industry he's been watching for 25 years. Email him at [email protected].

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