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Nothing to loseChris Koehncke
About 4 years ago, I switched my Verizon line to Vonage. Haven’t looked back despite some ups and down. Since that time, Verizon has sent me a flyer or a letter every couple of weeks, asking me to come back. This is known as a "win-back" campaign.
Initially, the message was Verizon is a great provider, we have a great unlimited package at $49.99, then $39.99. Look at all these great features. I didn’t bite. Later, Verizon offered me gift cards, "get a $25 American Express gift card if you sign up by xx/xx/xx". Screw you, I don’t want it. The last letter arrived yesterday, we really want you back, $19.99 a month for the first 12 months.
Wow! On initial view, this sounds like disperation. Verizon must be going the way of Eastern Airlines. Vonage and the cable guys must have truly hurt them. "Joe – turn off that CO when you leave tonight". Maybe I should consider ….
NO. Let’s hit a couple of marketing 101 points. Some Sr. Manager at Verizon sitting in a gray cube in some ugly building thought this action plan up. Probably got a Master Degree in Marketing. It’s not helping them. The reason I left Verizon is because they were uncompetitive, their charges laden with so called "taxes" that were in fact recoveries for other stuff they’d convinced the State PUC to allow them to recover. Doesn’t look like they’ve changed and guess what — I still remember why I left.
Winning a customer back with a one time or limited time promotional price is in fact a great tactical plan. Because it doesn’t disrupt their existing customer base (who remain fat, dumb and happy) paying $39.99 a month. Since I’m not NOW a customer, Verizon can play all kinds of pricing games with no fears. So over time, they just keep lowering the price, if I don’t "bite", so what it didn’t cost them any money. If I do bite, well the pain for them is only for a limited time.
I wonder why not adopting a business strategy of simply trying to offer your customer a great price is not the best policy. It is, but it takes guts and more than a Sr. Mgr in a cubicle to make that call.