Top telecommunications service providers seem to be changing their strategies as competition grows and carriers look for ways to improve margins. Often, these do not sit well with customers, and we have seen T-Mobile receive quite the backlash for moving to a self-service model and pushing customers to adapt to its T-Life app. Not long ago, Verizon was also under hot water for deciding to phase out its loyalty discounts that long-time customers had come to rely on.
This was taken as a punishment for loyalty by many old customers. The backlash was immediate and shared on varied platforms, revealing how the users felt an air of mistrust towards the carrier. Verizon is now looking into damage control, as the decision earlier did the company no good.
Verizon's loyalty discount misstep serves as a costly lesson in customer trust
Verizon has been taking major steps that are focused more on customers who are willing to pay premium rates. In an attempt to make this strategic shift, the company decided to eliminate loyalty discounts. What the carrier did not calculate was the amount of criticism it would receive from long-term customers over this move and how it would turn out to be a public relations nightmare. The users felt betrayed, and most of them cited sticking with the carrier for so long due to the loyalty discounts. By removing the discount, Verizon invited even more competition as rivals started looking for ways to lure the frustrated users.
The company's misjudgment caused a severe backlash, and many even took to online forums to share their plans to switch to another carrier. Verizon seems to be going back on its decision, and early in August, it partially started reinstating some of the discounts. While the limited rollback did help ease the tension, quite a lot of damage to the company's reputation had already been done. As per recent reports, the company is said to be looking into a broader decision to help de-escalate the situation.
Verizon is said to introduce a new set of loyalty discounts in September that will be tailored to each user individually. The way it would work is that the carrier would take into account the specific user's number of lines and plans, and then, according to it, a straight percentage discount would be applied to the entire bill. This would simplify the process for the users and the company and help manage the current pricing crisis.
The entire unpleasant episode Verizon is going through serves as a reality check for other telecom service providers as well. They must ensure that, in an attempt to stay competitive, they do not compromise on the trust and perceived value for loyal customers, for it could be more costly than anticipated.
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