The cell phone bill for the month was $2,400!! Thankfully it wasn’t mine.
My friend had just gotten back from a trip to Cabo San Lucas and Phoenix, and was happily using his smart phone to Google Map his way around, not realizing the he was being charged criminally high international data roaming rates.
Recently, I got off a plane for a vacation in Mexico when my iPhone buzzed with a welcome text from my wireless carrier explaining my roaming plan. 75 cents per text, (a low rate?) of $2 minute for voice, and an astounding $8 per megabyte for data.
A moment of panic swept over me as I quickly checked my phone settings to ensure cellular data was turned off. An accidental visit to the Yahoo home page could easily cost me $16. (My fear was high enough that I am sure that I had previously checked the settings at least three times before getting on the plane as well.)
Back in Canada, my monthly package is about $65 but for this I get:
- 200 anytime local minutes
- 1 GB of data, $10 per additional GB
- Unlimited text, picture and video messaging
- Unlimited nationwide talk with any 10 numbers
$8,000 per gigabyte!!
The key bullet above is the additional data charges per gigabyte, which are only $10. If we extrapolate the data charges in my welcome to Mexico text, they want an equivalent $8,000 per gigabyte for international data! $8,000 per gigabyte!!
Senõr, that will be $2,960 for your Big Mac, … the fries are extra
As an analogy, imagine going into a McDonald’s in Cancun, ordering a Big Mac, and finding out that it cost you not the usual $3.70 back in Canada but $2,960 (two thousand nine hundred sixty)!! And the best part would be that you would only receive the bill in the mail a few weeks AFTER you ate the burger.
That last part has got to be the most frightening. Unlike filling up your car’s gas tank, and knowing exactly how much gas you have pumped and what it has cost you, most wireless customers simply get ambushed with their international data bill when they get home from their vacation. None of the carriers have made it easy for their customers to accurately meter their usage, especially when travelling.
Comparatively, my home land line data rates are pennies per megabyte, and typically carried by cable, copper, or fibre. These are the same conduits used by the phone company to move data from the wireless towers to the other endpoint. In fact, most wireless communication is only wireless between the mobile device and the tower. Everything else is either cable, copper, or fibre which is normally charged to us for pennies per megabyte transferred.
My friend’s $2,400 shock pales in comparison to a family from Saskatchewan who were letting their two boys watch Netflix on their mobile device for $10,000 and a woman in Florida who got a $201,000 surprise.
… horror stories …
These horror stories only leave the phone companies customers confused, fearful, and distrustful. I’m sure you will agree that these attributes are not the hallmarks of a customer centric brand, but because there is enough active “collaboration” between the world’s phone companies to preserve these profits there seems very little that customers can do about it.
Of course, this only makes customers very skittish, and extremely disloyal, with customer retention being a major problem. Some studies peg the industry’s customer churn rate as high as 30% to 40%. In other words, at least a third of the entire pool of customers switch carriers during the year. As soon as our contract term is up, everything is up for grabs as we scour offers from rival telcos for our mobile affections. Beyond this, in Canada we are happily anticipating the arrival of two new carriers and the introduction of new consumer protection legislation.
Don’t follow the phone companies
Don’t want to follow the phone companies lead for building your brand? Then try these simple steps:
- Be Transparent – Your clients are quite capable of doing the math and evaluating whether your pricing adds up. Instead of making them work, do the math for them and show them WHY your prices are calculated as they are, as well as the features and benefits they receive at each tier. (No one believes that it costs 800 times more to move data in Mexico.)
- Be Fair – Just because you can charge 800 times more, does it mean you should? Especially when the result is fear and uncertainty in your clients? You will only be planting the seeds of the long-term destruction of your brand.
- Be Trustworthy – Become a client advocate. The golden rule applies in spades: Do unto others as you would have them do unto you. But more importantly, watch out for your clients, protect them, keep them safe.
Is your brand Transparent, Fair, and Trustworthy?
photo credit: Simon Miller
