How NOT to Win Customers For Life

Being in marketing, I tend to pay close attention to what other companies do to develop their brand.  When you think of brand, your mind probably goes to a brand name or logo or spokesperson.  When I think of brand, I look much further than that.  As my boss loves to say (constantly): "Everything a person sees, hears, feels, or experiences is your brand."  So when you go to the grocery store and it is dirty, it affects your view of their brand.  When you ride in your friend's new car and it smells funny, it can affect your view of their brand.  This is why most luxury car dealerships give free car washes for life - if you see a dirty, trashed out Lexus driving down the street (also known as Emily's Lexus), it can affect someone's perception of Lexus when it is really out of their control (sorry Lexus!!).  

Today I realized a major thing about AT&T that is killing their brand: their strict upgrade policies.  It really doesn't cost them a whole lot to let you upgrade your phone at the "reduced" price, but yet if you are outside of the 18 month upgrade period, you have to pay ridiculous prices for a new phone.  You can usually talk them into giving you the reduced price, but you come away feeling horrible about AT&T and extremely frustrated with the service they've provided.  Today I stood at the front of the AT&T store waiting for my turn and watched 5 unhappy customers leave the store feeling ripped off and not getting what they came in for because of this exact reason.  And then an hour later, I left feeling the same way.  Not great for your brand.

  

Here is my solution, AT&T.  Let people get a new phone at the "upgrade price" at any time, as long as they sign a new two year agreement.  No questions asked.  People will feel really good about your company, will make them loyal customers, and I would bet money that you would actually see revenues increase.  I know plenty of technophiles who would buy a new phone every 9-12 months if they could so they would have the latest and greatest thing to come out.  But instead, you won't let them buy it until 18 months have passed.   Over a 6 year period, one person would double the number of phones they purchase from you if they could easily get a new one out of the 18 month timeframe.  And those customers are usually the ones buying the more expensive models as well: the iPhones, Blackberry's, Samsung Blackjacks, etc.  

Unfortunately, AT&T is way too caught up in their own self-righteousness to think of something so simple, and will continue to alienate customers while their more nimble competitors (T-mobile, Alltel, Boostmobile, etc.) will most likely come to this conclusion (if they haven't already...I've heard t-mobile is really easy to upgrade with) and AT&T will find themselves in a bad spot.