Category Archives: US

T-Mobile USA takes top spot in Nonstop Retention

When we today launch Nonstop Retention® – our toolbox for how mobile brands should keep customers with non-binding contracts loyal – we also introduce the Nonstop Retention Index.

t-mobileIn our first top list – more brands will be listed in the coming months – T-Mobile USA takes the No 1 spot with a Nonstop Retention Index of 58.

Even though T-Mobile didn’t originally invent all of their “uncarrier” initiatives, it’s logical that T-Mobile becomes highly ranked as the company systematically worked with continuous customer retention in mind, launching initiative after initiative to make customers actively want to stay with T-Mobile.


Some categories where T-Mobile ranks particularly well are:

Inclusive value

During the last year, T-Mobile has several times added more value to their Simple Choice plan without increasing the prices. The fact that most of these changes – last one being the inclusion of roam like home in Mexico and Canada – are done not only for new customers but also for existing customers is very positive for T-Mobile’s Nonstop Retention Index.

T-Mobile music streaming2Other positive contributors are Music Freedom allowing customers to use 33 music streaming services without data charges and T-Mobile’s introduction of Wi-Fi Calling, which improves indoor coverage and thereby reduces risk of churn.

Bundling with fixed broadband or TV (so called quad-play) would have increased T-Mobile’s index – if it would add to the inclusive value or bring additional discount.

No waste of data

As one of few operators, T-Mobile is still providing unlimited data (albeit with restrictions on tethering) as a premium option for customers.

Data StashFor customers on limited plans, T-Mobile’s introduction of Data Stash, carrying over unused data to next month, is also improving the Nonstop Retention Index. The more data customers accumulate in their Stash, the lower the churn risk. Who wants to leave gigabytes of unused data behind? T-Mobile could have done more, though. Data Stash isn’t available for customers on the 1 GB entry level. If it was, the Nonstop Retention Index would have been 60. Data sharing (which all of T-Mobile’s competitors have) would also have improved the index.

Community & following

With a CEO who has 1,6 million followers on Twitter, you shouldn’t perhaps be surprised that T-Mobile is good within the “community & following” category (even though the number of followers John Legere has isn’t an indicator in the Nonstop Retention Index).

T-Mobile family planBut in addition to T-Mobile’s strong use of social media, T-Mobile has also been very successful with its family plan which – in a simple-to-understand way – gives friends and family members additional discounts when they attach yet a user to an account. T-Mobile has said that more than 50% of their subscribers are on family plans. Noticeably this was achieved without data sharing.

T-Mobile also has a referral program which is positive for the Nonstop Retention Index. One way for T-Mobile to improve further would be to introduce a loyalty program.

Handset flexibility

JUMP!T-Mobile was for long synonymous with the equipment installment plan (EIP). It allows customers to change handset when they like – if they pay their remaining balance. But T-Mobile was also a pioneer when introducing the early upgrade plan JUMP! in the US. With over 11 million enrolled customers, it’s been a success for T-Mobile – especially considering that it costs an additional 10 USD per month.

Both of these initiatives are positive for the Nonstop Retention Index. So is the fact that T-Mobile followed Sprint to introduce also a handset lease option – dubbed JUMP! On Demand.


But T-Mobile can still improve. Their Nonstop Retention Index of 58 is still far from the maximum of 100. Here are the two categories where T-Mobile is relatively weak:

Contract freedom & fairness

Surprised? The marketing messages from T-Mobile suggests that there are no strings attached. But there is one. If a customer cancels the service contract, he or she if forced to pay the remaining equipment installments upfront. This is, de facto, coupling the service to the handset since most people can’t afford paying upfront – that’s why they took an installment plan in the first place. If T-Mobile instead allowed people to continue paying on their installment plan (even if they paused their service contract), there would have been a chance that the customer could have rejoined a few month later. Now that’s much more unlikely.

Buying experience & rating


When it comes to buying experience, T-Mobile isn’t standing out from the crowd: In a traditional American fashion, there’s much fine print and much of terms & conditions:

T-Mobile fine printIt’s not easy for customers to make educated buying decisions. And for customer loyalty it doesn’t matter if the operator can prove its legal right, it matters that the customers understood what they bought.


Even with these improvement areas, T-Mobile tops our first version of the Nonstop Retention Index.

In the coming months, we will add more mobile brands to the index.

Read more about the Nonstop Retention Index: http://nonstopretention.com/nonstop-retention-index/

With the iPhone Upgrade Program Apple makes operators replaceable

This blog post was first published at tefficient.com

For operators, the biggest piece of news in Apple’s event yesterday isn’t the iPhone 6S or the iPad Pro. Instead it’s Apple’s introduction of its own iPhone Upgrade Program.

Apple upgrade program

Operators like Sprint – with their iPhone Forever lease plan – and T-Mobile with their JUMP! On Demand lease plan are already offering the same – a new iPhone every year if you return the old one – for less than what Apple is about to offer.

Yet, Apple’s proposition will likely be successful. After all, it comes from Apple.

Another reason is that you can freely select the operator you like:

Apple operator message

That option is obviously not available via Sprint or T-Mobile (or anybody else).

Apple is rumoured to have been unhappy with the fact that operators have left the two-year lock-in contracts with subsidised handsets to instead favour more flexible installment plans. The reason is of course that customers with installment plans are (supposed to) eventually pay the full retail price of their iPhones. Suddenly an iPhone is 650 USD, not 199.

Consequently, Apple regards lease plans being better. Especially if provided by Apple. This way Apple owns the customer and the operator selection becomes secondary.

With this initiative, Apple shows what we’ve long suspected; their interest in operators is limited to them functioning as Apple’s sales channel.

More importantly, Apple will now have full control of the returned, used, iPhones and can decide what to do with them. It’s unlikely that those returned iPhones will ever be circulated again – to make sure they don’t cannibalise new sales.

Apple’s iPhone Upgrade Program starts 12 September in the US and in 11 other markets. Let’s assume it will be a success and spread further.

For operators, this means the future lies in non-binding SIM-only plans. And that operators need to fill their retention toolbox with new, sharper, tools to keep customers – now that lock-in won’t always be an option. Those who know how will prosper.

We call this Nonstop Retention® and will come back to it in the coming days.

Freedom to stay – The power of 40000 Tweets

This blog post was first published at tefficient.com

Consumers often think of carriers being somewhat stuffy and dusty, being slow to give customers flexibility and big at small print. But there are great exceptions to the rule with T-Mobile in the US, Free in France and Tele2 in Sweden, and we believe the next two years will see some further fun, entertaining and disruptive carrier offerings on the market.

We wanted to share a nice tidbit of data around T-Mobile’s subscriber acquisition and retention costs (SAC/SRC). Please note that since 2014 T-Mobile no longer reports SAC/SRC for the US market. Nevertheless, the chart below proves a clear point, the effect of T-Mobile’s “un-carrier” strategy on SAC/SRC.

For those of you who might not be familiar with the thought behind un-carrier, T-Mobile US decided to throw out the rule book by which carriers normally market towards their subscribers. Instead they introduced simple new plans, transparency, fun, clear and jazzed-up promotions to their base relying on the CEO John Legere’s personal involvement and heavy use of social media. T-Mobile US has become more of a lifestyle choice rather than merely a mobile service provider for its customers.

T-Mobile USA SAC SRC base dev Q1 2012 Q1 2014

As the above graph shows, T-Mobile’s launch of their first un-carrier element at the end of March 2013 (highlighted) coincided with their conscious reduction of postpaid SAC. (Let’s effectively look at that as a Q2 2013, not a Q1 2013, launch). In the two quarters following, T-Mobile’s postpaid SAC went from USD 223 to USD 141, a dramatic and noticeable reduction of 37% in six months. Meanwhile, in spite of the lower SAC spend, the postpaid customer base increased from 20 million postpaid customers at the end of Q1 2013 to 22 million nine months later.

Before the very public announcement and commitment to the un-carrier strategy, T-Mobile US used more on SAC but still lost customers. Why? After all if you throw enough money at marketing and retail, your base should grow, no?

It’s great irony that using less on customer acquisition leads to more customers isn’t it?

The idea is not difficult to understand in this day and age of socially savvy consumers, but putting such a disruptive approach into practice in an industry that still mainly single-mindedly sells service was – and still is – brave. In the early days of the un-carrier strategy, we can imagine some of the competition thinking “it’ll all end up in tears”.

But it hasn’t, has it? Today, after assertively rolling out their 4G LTE network and while systematically following their un-carrier initiatives, T-Mobile US has added 2.1 million total net customers during Q4 2014 only, and for all of 2014, T-Mobile added 8.3 million total customers, which represents an impressive 89 percent jump from 2013 (proforma incl. MetroPCS). Early indications seem to show that T-Mobile has now passed Sprint, and is next gunning for the (still distant) #2 position on the US market.

Uncarrier 9Un-carrier 9.0 was unveiled on March 18th – yet another industry-rattling move, aiming at disrupting wireless business services in the US, as T-Mobile has already done in the consumer segment. This includes the Un-carrier for Business™ bringing business plans with flexibility on the number of lines for 15 USD per month (to companies with 20 to 1000 lines) and a new Business Family Discounts plan giving strong credits for family lines if you’re already a business customer.

But un-carrier 9.0 also contained a proposition to pay off remaining device payments up to 650 USD if a consumer switch over to T-Mobile. Moreover, an ‘Un-contract’ guarantee was introduced promising consumers that prices will never go up for the plans they have – addressing a possible worry for T-Mobile’s customers since none of them are bound by contracts.

T-Mobile porting ratios 2013 2014T-Mobile has not only grown, but also taken customers from competition, proven by strong porting ratios. (Porting ratio is the number of customers joining T-Mobile from a competitor versus those going in the opposite direction). For the full year of 2014, versus Verizon, T-Mobile had a porting ratio of 1.4 to 1.0. Versus AT&T it was 1.8 and against Sprint it was a massive 2.2 to 1.0.

And while competitors AT&T and Verizon are considerably bigger in scale, T-Mobile has undoubtedly gained a lot of ground by shifting their focus to the customer backed by a strong social share of voice. As Alexander Jutkowitz so well phrased it in his blog for HBR:

“Marketing is dead and customer loyalty killed it”

Consumers, especially millennials, follow brands they feel an affinity with, and turn their backs (if they have other options to choose from, or lower their consumption) to those who solely push a product.

The road to #NonStopRetention

So what are the potential steps to improving customer loyalty when consumers have the power of social media channels and an ever-increasing array of new cool social tools at their disposal (e.g. to take a very recent example, Meerkat video streaming on Twitter)?

  1. Be personable and listen to your customers

tmobilejohnlegere90It takes character to do what John Legere does. There is wisdom in showing personal commitment to your company strategy. Although Verizon and AT&T both have twice as many customers as T-Mobile, T-Mobile US’ social channels have resulted in a share of social voice that is 1.5 times the engagement of their competitors. The CEO John Legere alone has well over 1.2 million followers on Twitter! He spends hours daily actively listening, re-tweeting and joining in on the discussions his (and competitor’s) customers have on Twitter.

T-Mobile US also acts on customer feedback that largely derives from social media, by introducing services customers really and truly wish for. Stunning examples on the use of social to maintain and improve customer loyalty!

  1. Generosity vs. greed

We know all about caps, limits, up-to-allowances on data, don’t we. And we know about buying handsets as part of our contracts and paying a premium for it. There are many examples. How would you feel if your bank told you, that as you’re not using up your money each month, they’ll take what’s left over every month. Not likely! But we pay for a data allowance every month, and few of us use it up each month – so it’s wasted and zeroed each month. That is crazy.

Twitter_bird_logo_2012.svgThe 8th un-carrier initiative is around “Data Stash“, what you don’t use, you don’t lose, it is rolled over to the next month. T-Mobile US says they based their 8th initiative on around 40000 tweets from customers around this topic. And from March 22nd, also pre-paid customers can make use of Data Stash to rollover unused data for 12 months. They really have listened to the customers! As mentioned, the 9th un-carrier initiative also unveiled a un-contract commitment from T-Mobile to honor all existing plans without raising prices.

  1. Freedom to stay

What happens to sand when you squeeze it in your fist – it spills over! Could it be that carriers often squeeze customers? The standard practice is 24 month contracts, and one can’t upgrade to a new handset until so and so many months etc. It does not make for happy customers. We stay because we have no choice. But as soon as someone offers a better alternative, most of us are off to greener pastures.

Abolishing contracts means flexibility and freedom for the consumer – more importantly freedom to stay.

The focus shifts from binding to thinking of creative, relevant new offers and services that make remaining loyal to a service provider both fun and engaging.

And yes, T-Mobile US has done it; new customers can sign up and commit to stay on month-by-month basis. And what happened, they didn’t run away, they stayed and more churned over from competition.

  1. The power of unexpected gifts

The retail industry has for some time rewarded and surprised us with vouchers, birthday discounts and two-for-one offers. And we’ve seen how some of the mobile apps businesses have run incredible referral campaigns (e.g. Dropbox, Airbnb, Uber, Spotify, Evernote), rewarding for word-of-mouth. You name it, they’ve probably done it. So why couldn’t a carrier do the same (as they also know quite a bit about us, based on our customer data and usage patterns).

Tele2 mer data 50

Tele2 in Sweden recently threw in a surprise for some of their customers as it upped data allowances at no additional cost, change to contract details or other bother. A simple unexpected gift to loyal customers that reads out as follows: “Thanks for being a loyal customer, we’ve upped your data allowance from 3 GB to 50 GB.”

Tele2 surprise feedbackAnd the reactions on social media were fantastic (example).

T-Mobile US selected a small group of customers and upgraded them to unlimited 4G LTE until the end of the year, at no cost to them:

“As you know, we love to give our customers more value without asking more from them”

An unexpected gift from your carrier with no strings attached easily sways customers to remain with their provider – and is far better marketing than spending on above-the-line promotions. It is personal and targeted.

  1. Make care social

While social media offers a loudspeaker to consumers, they also expect instant gratification and possible problems to be addressed then and there. Customer care is increasingly moving towards a mobile app experience, with well over 50% of smartphone users preferring to use a mobile app before calling customer services.

Managing your account, billing and being informed of possible downtimes is not enough any longer. Consumers increasingly also expect to find upgrade and special offers through the carrier’s customer service app. From a carrier’s perspective, this not only improves loyalty, but it also has the potential of taking down customer service costs.

Moving upward and onward, it is worth considering adding discussion forums and opinion polls also into the care channels – regardless how the consumer gets access to them. Enabling consumers to engage instantly with customer services, and voice their views – good or bad – allows carriers to rectify complaints quickly but also act on good ideas from the customer base.

  1. Dust off your data

We live in the “age of context” as Christian Hernandez so aptly calls it in his blog.

Our personal data is combined with public data and app level data. We have smart devices, sensors and wearables, and a layer on top for enabling faster, easier, contactless payments. This is a topic for a whole new blog, so we’ll keep it brief here.

The gist of it is, that all service providers have and collect a massive amount of data on us. So it’s time to dust off the data and make smart decisions on services that are personal and relevant for us based on what, when and how we consume.

  1. Act fast

If you give customers the freedom to stay with you – without those binding 24 month contracts – this not only gives flexibility for the customers, but also for carriers themselves.

There are plenty of examples on innovative new plans that e.g. T-Mobile US has introduced (Data Stash, Jump, Music Freedom, Family Line 1+2, etc).

Consider also the opportunity to do social and campaign-like offers over seasonal holidays, Valentines Day two-for-ones, Back-to-School time or around entertainment content partners – or even wackier limited offers such as flash sales on data.

Changing the mindset from binding to flexibility allows carriers to innovate faster and offer more relevant services based on usage and lifestyle to subscribers and win over new customers.

There is a better way to win over customers, without increasing SAC/SRC, and it is all about offering freedom and shifting our mindset towards customer loyalty!

We call it NonstopRetention.