When O2 first announced that they were to be the first UK mobile operator to have the rights to sell iPhones and contracts, there was a lot of debate as to whether they had paid too much in terms of revenue share they’d have to give to Apple.
I actually thought that they’d do well from it, irrespective of the relatively high share they were giving away. My logic was based on that they were likely to be acquiring ‘happy customers’, i.e. customers who, on average, would be advocates – of the phone and by default of O2, until such time as their exclusivity runs out. As input to that, I had considered the USA launch, noting that despite locked phones, the post launch price cut, and relatively poor mobile service from AT & T, the vast majority of existing customers are still massively positive about the device – and sales figures continue to look good.
I even pondered for a moment that O2 might have taken this acquisition of happy customers into account in their calculations and that they had figured out the ‘net promoter’ impact to show an overall positive return. Of course that would therefore mean that O2 were in full control of the launch plan, had designed the perfect customer experience around it, and all they had to do was hit the on button on 9th November……and that was where my assumptions seem to have fallen apart.
Consider what has actually happened in my case:
- I am a long term O2 contract customer, on a reasonably high tariff, and they regularly tell me how important I am to them, and how I have my own special ‘select’ number to call if I want to talk to them.
- When the iPhone deal was announced I phoned them up to see what the deal/ options were going to be; their answer…….go to our web site and have a look, we can’t tell you anything over the phone.
- Fair enough I thought, their call volumes will be very high so I can understand their logic, although I thought the might have a programme to allow existing customers to talk to someone.
- As time went on, there were no more details announced, so I thought I’d phone up again to have some specific questions answered. On that call, the penny dropped for me….there is no designed customer experience, or at least not a good one, there is no segmentation in place that differentiates between existing and new customers…..and that the all my thoughts about O2 acquiring advocates were about to fall by the wayside.
In fact it’s worse than that – the 1600 minutes I have stacked up in credit with O2 will disappear if I merge my existing account with an iPhone account. So as an existing customer it costs me more to switch to an iPhone than it does for a new subscriber. And when I then look at how I come to have 1600 minutes built up, I realise that the O2 proposition that supposedly keeps me on the right tariff is not worth the paper it is written on
So – what does that tell us (other than that I will need to spend most of this week on the phone to use up my credits)? I think it tells us that:
1) O2 are going to miss out on the chance to buy/ convert a load of high value, customers who could improve the advocate balance of their customer base (which according to Reicheld is the only metric that matters).
2) That there is obviously some weirdness going on behind the scenes in which O2 and Apple, whilst partnering, are squabbling over the customer experience – and Apple won.
3) That there is a strong danger that O2 will negatively impact trust and quality of relationships in that segment of their customer base that is already a loyal customer, and which switches to an iPhone.
Come on O2 – you’ve got 3 days to at least notice that you have ignored your existing customers. You seem to be able to send me text messages about all sorts of irrelevant stuff – how about one about my iPhone and how to avoid losing my credits????
