Carrier Sprints to Keep Small Businesses On Board

By Judy Mottl | Posted June 27, 2008

This week, Sprint announced its Business Premier program which is designed to reward its small business customers. The program was initially a Nextel program called Premiere Club that debuted in 1999. Customers receive gift cards on subscription anniversary milestones along with special phone discounts, network coverage updates and a specific support team trained to help SMBs with business connectivity issues.

"It's our way of thanking customers for years of service and our way to engage our customers," a Sprint Nextel spokeswoman said.

Niche customer marketing is gaining popularity within the wireless carrier market given the competitive race to grab and retain subscribers. While current rate plan discounting by carriers is aimed at luring subscribers, loyalty programs are focused on keeping users.

"Loyalty programs are a long standing tactics for many different types of business," said Lisa Bradner, a senior analyst at Forrester. "The [Sprint] program allows the company to recognize and reward customers who give them good business."

Sprint's SMB program has three tiers, Silver, Gold or Platinum, which are tied to monthly billing amounts. "This gives the carrier a great opportunity to reward their most profitable customers in a unique way," added Bradner.

The nation's third largest carrier, which has nearly 53 million customers, said it has several million SMB users enrolled in the program. "The goal is to reward our customers for their loyalty, and we even send them a specific newsletter to engage them on services and products that are a good fit for them," stated the Sprint spokesperson.

Earlier this year AT&T, Verizon Wireless and T-Mobile ignited a pricing battle when they announced unlimited calling plans for $99.99. Sprint Nextel shortly followed their lead with unlimited voice, data, text, e-mail, Web access, GPS service, as well as Sprint TV, Sprint Music, and Direct Connect and Group Connect options in one plan for the same price.

This week Virgin Mobile jumped on the bandwagon offering up a $79.99 monthly flat-rate plan. "The carriers have been bashed for offering their best prices and best offers to customers only when those customers threaten to leave," said Bradner. "By sweetening the pot and giving people rewards for staying they're recognizing that long-term loyalty has benefits for the business that should be recognized."

AT&T has had a SMB loyalty program since last summer. "It's a way for us to give big business benefits to small business," an AT&T spokesman said.

The carrier's Exclusively Business program offers a dedicated sales account team, monthly discounts to small companies with five or more users, and it eliminates the activation fee that accompanies contractual agreements.

"This is recognition that the SMB customer is just like the much larger customer in our eyes," said AT&T, which declined to specify the size of its SMB customer base.

AT&T recently ran an Exclusively Business sweepstakes awarded the winner free private-jet travel. Approximately 5,400 small businesses entered the contest, said the carrier.

"A loyalty program can't make up for bad service, or uncompetitive rates," said Bradner. "Our research shows that trust, prior experience and reliable service underlie loyalty to carriers. While you can layer on marketing programs and rewards, the customer experience is the number one thing that matters."

Adapted from Internetnews.com.

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