After racking up a number of successes, T-Mobile clearly made a misstep earlier this year, when it promoted Apple’s iPhone 5 to its BlackBerry customers.
BlackBerry this week announced it would not renew T-Mobile’s license to sell its products, which expires at the end of April. Now T-Mobile is now scrambling to keep its BlackBerry customers with an offer of a US$100 credit.
It is an ironic turn of events for T-Mobile and its CEO, John Legere, who has achieved remarkable gains responding to cellphone users’ frustration over service offerings.
The company’s rollout of its unlimited “Simple Choice” no-contract service plan, for example, fulfilled a long-held desire by many customers to escape being locked into a contract just to acquire a subsidized phone.
It offered a way for customers to make more frequent phone upgrades without being financially penalized by their contract, and it began offering unlimited data and texting around the world.
A Surprising Move
Therefore it is surprising that Legere could so badly misread how BlackBerry would react to a promotional email to its users highlighting the benefits of the iPhone as an alternative device. BlackBerry CEO John Chen called the iPhone 5s marketing promotion a “clearly inappropriate and ill-conceived” campaign.
Legere has expressed disappointment with BlackBerry’s decision, and T-Mobile now is trying to forestall an exodus of its BlackBerry customers; on Thursday it announced a $100 credit for any new device, including the BlackBerry Q10 or the Z10, through the end of 2014. The company also promised BlackBerry customers continued service and operating system upgrades.
BlackBerry, for its part, says it will work with T-Mobile to make sure its customers on the network will not be left hanging, by providing them with the “best possible customer service.”
Reading the Crackberry Bunch
T-Mobile is in a quandary, noted Ritch Blasi, SVP for mobile and wireless at Comunicano.
“Considering BlackBerry is primarily a business device, and T-Mobile is not necessarily known as a big player in enterprise, the ‘crackberry’ bunch can simply change to another carrier and probably get similar plans and prices,” he told CRM Buyer.
T-Mobile could lose some high-value customers, but a good trade-in offer might be able to get them to stay, he said. Also, it is important to note that BlackBerry no longer has a lock on the business market anymore, “so T-Mobile should be able to retain some BlackBerry users who might be better served with another device.”
Indeed, a case could be made that BlackBerry’s withdrawal from T-Mobile’s network may be the best thing that could have happened for BlackBerry customers.
“BlackBerry customers now have a choice of devices from T-Mobile, and it may be in their interests to carefully study the offer. It is unlikely BlackBerry will ever achieve the technological edge again in mobile communication,” said Rich Hanley, associate professor and director of the graduate journalism program at Quinnipiac University.
“BlackBerry has always been the adult in the room of mobile communications — but that is now a bug rather than a feature,” he told CRM Buyer.
Either way, this particular group of customers should come out OK.
“Neither T-Mobile nor BlackBerry are going to totally turn their backs on customers. That’s a poor business decision that would ultimately be detrimental to both companies,” Blasi said. “Each will do what’s best to protect their own image.”
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