Meanwhile, the company was in the midst of making a series of bold, drastic changes. They eliminated annual contracts, bolstered their LTE network, killed data penalties (moving to throttled data instead), and exempted most music and video services from counting against data caps.
As a result, they’ve steadily climbed in subscribers and surpassed Sprint as the third largest wireless network in the US.
At one of the company’s Uncarrier events today, CEO John Legere announced that the company had doubled its subscriber base from 33 million to 66 million.
Their attempts at industry disruption have paid off. So much that now other carriers followed suit.
Which is why T-Mobile’s latest Uncarrier announcement is all about retention.
The company today launched a handful of subscriber benefits designed to add value and keep customers in the fold. They are:
T-Mobile Tuesdays, an app that will feature a giveaway every Tuesday from participating merchants
Stockup, which will give each primary account holder one share of T-Mobile stock
Free in-flight messaging from select services, plus an hour of Gogo in-flight wifi for every subscriber
There isn’t much differentiation between carriers today. The networks are close in performance, prices are aligned, and each has the latest hardware.
What T-Mobile has done is something we’ve spoken about frequently on this blog. Subscriber services have to branch beyond their core product to retain members.
That means benefits that build engagement. Things that give the brand a reason to say something other than, “Give us more money!”
Third-party merchant value (discount programs) does that. Giving customers ownership shares does that. Free in-flight wifi, which is expensive, does that.
The end result, assuming T-Mobile can drive usage, is a typical customer will offset a portion of their bill every month.
That makes retention a far easier process.
This is a Loyalty Program
A loyalty program makes a lot of sense for T-Mobile, and any subscription business. Just don’t call it a “loyalty program.”
“I’m not announcing any bullshit loyalty schemes,” Legere said, according to PCWorld.com. “Loyalty schemes are broken and backwards and everybody hates them.”
When the #uncarrier says “thank you”… we go big! Our philosophy is just to say “Thank you.” No made up points. No strings. No schemes.— John Legere (@JohnLegere) June 6, 2016
Loyalty programs exist to recognize and reward customers for being loyal. The lack of a points scheme is irrelevant here. T-Mobile has launched a rewards program, and it’s nothing to be ashamed of.
Other subscription businesses have rewards schemes, but T-Mobile’s is different for two reasons.
One, they’ve ventured outside the brand to add value from other desirable third-parties. Gogo carries high value for travelers. Domino's Pizza is a national brand. Vudu and other early partners mentioned are also popular.
Second, giving away stock is unique. It’s taking a page from smart employers, who offer a slice of the profits to workers, thereby motivating them to maximize profits. T-Mobile is doing that with customers.
It’s a smart move, and you can bet that similar efforts will come from other competitors.
Will it work?
Asking users to download a separate app is odd, considering T-Mobile only recently revamped their core, account management app. Integrating the rewards into that app seems to make more sense. But then again, T-Mobile’s rise has been driven by the type of thinking that veers from the norm.
As with any other push to improve member engagement and retention, the success of T-Mobile Tuesdays is dependent upon usage. Can they get enough people to download that app?
Then, can they actually motivate people to use it every Tuesday? That’s dependent upon steady communication and a host of valuable merchant partners.
Finally, the coup de grace will come when they’re able to report this value back to customers. It’ll be handy to show a customer how much they’ve saved when the customers makes a cancellation (or rate adjustment) call.
Real success will come by being proactive. Perhaps a line on a statement showing how much the stock has gained, or a reminder of the $10 the customer saved thanks to last Tuesday’s free pizza. This assume T-Mobile has the ability to see the resulting data (they should).
Subscription models depend on ever-increasing value. Each payment or fee is earned. That’s challenging without annual contracts in an industry with decreasing differentiation. That's the path T-Mobile has chosen.
Today’s announcements are a great start. Seeing how the company follows through a month, or a year, from now will be the real litmus test of success.
If the past year is an indicator, you can expect that base of 66 million subscribers to stay, and grow.