My baby daughter understands stickiness. She explores its potential every day. Rice cereal all over her face and hands. The table. Her high chair. The ping pong ball she holds and plays with. The spoon we feed her with. The other spoon we give her to keep the last remaining hand busy and stop her grabbing the first spoon and flinging rice cereal over us too.
Looks like Vonage are getting into the stickiness game. They’ve clearly seen that there’s no barriers to churn in their voice service. So they’ve always had a cunning exit fee to put some icky goo near the doorway.
4.6 Disconnect Fee
Customer will be charged a disconnect fee of $39.99 per voice line upon termination of Service for any reason or for convenience by Customer. The disconnect fee becomes due and payable immediately upon termination and will billed directly to Customer’s credit card. If Customer has multiple lines, Customer will be charged a disconnect fee of $39.99 per line for each line disconnected.
[Special note to cellular subscribers who signed up via a call center: those $150 early termination fees are hogwash because most carriers have no means of retrieving the recorded voice conversation where you agreed to the terms, so they can’t make the fee stick, if you excuse the pun.]
Today’s announcement is they are issuing a WiFi phone. Presumably locked down to their service. They are taking a leaf from the cellular companies’ book here. Once you’ve bought all their proprietary kit, offered at subsidised prices to drive adoption, you’re less likely to leave. Even better for Vonage, a WiFi phone is less of a fashion item than a cell phone, and has an easier life, so natural obsolescence and decay of lock-in is weaker.
The trick is to charge a bit more than the market rate to existing subscribers, keep prices low for new subscribers via special offers, and keep the pay-back period for switching just a bit too long for most people to bother.
By co-incidence I referred a colleague to Vonage yesterday. His payback period for abandoning his traditional landline carrier for VoIP was about two months. A no-brainer.
So, my expert telecom advice to Vonage is this. If you want to know even more about stickiness, I’m willing to help. Just go to the contact page, and my daughter’s consulting skills are only a call away. Very reasonable fees. Travel expenses and rice cereal supplies not included.
Posted by Martin Geddes at 02:41 PMTrackBack URL for this entry:
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