Lure new customers, hook them with convenience and dependency, boil them with slowly increasing prices so they don’t notice they are being skinned alive for all they are worth while the service quality decreases. It has been like this since time immemorial and it is the only reason that first month, first time user promotions exists.
In the cell phone carrier industry, it’s called churn. Getting new customers is considered better than keeping old customers, especially when older customers are grandfathered into better plans.
The big three carriers in the US are running a scam. It’s only worth paying for them if they are subsidising your phone. Once they’re no longer doing that, you should drop them and go to one of the other two. They all have roughly comparable coverage, though it depends on where you live. (If you say they don’t/one is best, either you live in an odd place and maybe that’s valid; or, you’re a victim of deceptive marketing.) By changing carriers, you become a new customer and you can get the deal. But people are too lazy to change, so they keep paying the high price.
If you don’t want to change network, at least change from the network to their MVNO (Mobile Virtual Network Operator). Verizon’s is called Visible. T-Mobile’s is called Mint. I do not know if AT&T owns one. There is one called US Mobile that lets you jump between operators, which are called Dark Star (AT&T, a reference to their logo resembling the Death Star from Star Wars), and I’m not sure which is which between the other two. They’ll let you change carriers for a buck or two, or there’s a more expensive plan where you can do it for free. You may have even heard of Trump Mobile. While that hasn’t officially started, as much as we want to shit on it (and rightly so), it’s just gonna be another MVNO. What makes it stand out is, one, it’s named after a president, and two, it’s a lot more expensive than the others at $47.45 a month. Most MVNOs are like $20-30 a month. Two lines on T-Mobile was running us like $200 a month. Now we pay Visible $25 each. There’s no family plan, everyone pays individually, but we’re paying a quarter as much and we have Verizon coverage, which is wider where we live, but not as fast as T-Mo. T-Mo is fast if you can get it but they don’t have the square miles of the bigger two, even after acquiring Sprint and US Cellular.
my guess would be that those loyal customers are the least likely to leave, so u can squeeze as much as u like out of them.
new customers u wanna attract more of, so treat them better and they will come to u.
those who leave and come back for the discount are probably not a meaningful enough size for a company to even think about.
Or even worst, the elderly?
id say this is definitely an effect of this behaviour, but i doubt its intentional. a company doesnt care abt anything but profits, so they dont care abt the impact of their actions beyond that
Does anyone why this is a thing?
Apart from the obvious capitalist greed, what’s the point if everyone leaves and then re-enters with the discount?
Is it just a way to milk the laziest ones? Or even worst, the elderly?
It would be so fucking stupid but I can’t really think of anything else, so if anyone has some knowledge that wants to share I am all ears.
EDIT: thank you to everyone who answered, it makes more sense now and I’m glad I’ve never been a “loyal customer” in my entire life.
That’s just how subscription models work.
Lure, hook, boil.
Lure new customers, hook them with convenience and dependency, boil them with slowly increasing prices so they don’t notice they are being skinned alive for all they are worth while the service quality decreases. It has been like this since time immemorial and it is the only reason that first month, first time user promotions exists.
In the cell phone carrier industry, it’s called churn. Getting new customers is considered better than keeping old customers, especially when older customers are grandfathered into better plans.
The big three carriers in the US are running a scam. It’s only worth paying for them if they are subsidising your phone. Once they’re no longer doing that, you should drop them and go to one of the other two. They all have roughly comparable coverage, though it depends on where you live. (If you say they don’t/one is best, either you live in an odd place and maybe that’s valid; or, you’re a victim of deceptive marketing.) By changing carriers, you become a new customer and you can get the deal. But people are too lazy to change, so they keep paying the high price.
If you don’t want to change network, at least change from the network to their MVNO (Mobile Virtual Network Operator). Verizon’s is called Visible. T-Mobile’s is called Mint. I do not know if AT&T owns one. There is one called US Mobile that lets you jump between operators, which are called Dark Star (AT&T, a reference to their logo resembling the Death Star from Star Wars), and I’m not sure which is which between the other two. They’ll let you change carriers for a buck or two, or there’s a more expensive plan where you can do it for free. You may have even heard of Trump Mobile. While that hasn’t officially started, as much as we want to shit on it (and rightly so), it’s just gonna be another MVNO. What makes it stand out is, one, it’s named after a president, and two, it’s a lot more expensive than the others at $47.45 a month. Most MVNOs are like $20-30 a month. Two lines on T-Mobile was running us like $200 a month. Now we pay Visible $25 each. There’s no family plan, everyone pays individually, but we’re paying a quarter as much and we have Verizon coverage, which is wider where we live, but not as fast as T-Mo. T-Mo is fast if you can get it but they don’t have the square miles of the bigger two, even after acquiring Sprint and US Cellular.
my guess would be that those loyal customers are the least likely to leave, so u can squeeze as much as u like out of them.
new customers u wanna attract more of, so treat them better and they will come to u.
those who leave and come back for the discount are probably not a meaningful enough size for a company to even think about.
id say this is definitely an effect of this behaviour, but i doubt its intentional. a company doesnt care abt anything but profits, so they dont care abt the impact of their actions beyond that