Thursday, October 4, 2012

Do the maths! - 3 has just lost a customer for 79 pounds

When I comes to customer service, there is an old say we all know “it is more expensive to loose a customer than to keep them happy” and this will, in turn, bring profitability to your organisation.
And when faced with the eternal question “how much to compensate” then you know you are already on the wrong road as you have upset a customer and about to loose them, costing hundreds of pounds and your reputation.
And if your customer gives you the chance to keep them loyal, why question this? Just go along with it, making sure you keep that customer happy and in return they will keep on coming back for more, spending more and more every time.
This applies to all industries, not just hospitality, as we think of it often when we talk about this subject. And I want to share a story where a company really doesn’t get it, and one day it will come to bite them back. Yes, they may think that loosing a customer now is of no importance, but soon they will realise that this is not the case and little by little they are chipping away to their loyalty base and it will eventually collapse.
I am asking anyone who reads this article to pass it on, and for every person you pass it on to see if it makes sense or not what I am about to tell. The world needs to know how much this company is taking advantage of us and don’t realise we are important, as much as a customer when they come into a hotel or restaurant and get bad service.

I have been a customer of 3, the mobile company for over 8 years. I started with them with a simple contract back in the days and as I renewed, every time I got a nicer phone and singed another 12 months contract and recently 24 months contract. Fair enough, you need to commit, so I sign and I know they will look after me. Until now…

My wife and I have a contract each with 3 for 24 months at 37 pounds each, in return we got the i-Phone 4. Love the machine so why not, it’s a price you pay for a device you like. 2000 minutes, 5000 texts, unlimited Internet and all the calls I want to any 3-network mobiles (I only know my wife on 3). If you check my bills over the last 24 months you would see I use on average 10 call, 2 texts and some internet as I work abroad and I do not use my phone, otherwise the 37 pounds become 100 pounds a month roaming charges!. But hey, I have an i-Phone and I feel good.

My wife uses it slightly more but believe me she has never used her 2000 minutes or 5000 texts. But hey, she likes the i-Phone too.

Unfortunately she lost her phone 6 months ago, we had no insurance on it and so we just had to swallow our loss and wait for an upgrade. So I gave her mine, she uses it more than me and for the last 6 months I’ve used an old handset to make and receive calls. 37 pounds a month right down the drain! So I thought, I’ll just change my contract in November for a 10 pounds a month, get a small smart phone for free (HTC or Samsung) and be done with it. So let’s start doing the maths her and please keep track of this.
3 is about to loose 27 pounds a month income, not through their fault but just as a customer that realised, like many, “why the heck am I paying for all those minutes and texts when I don’t use them?” for the phone? Well, no longer need it and I will save that money.

So far 3 are about to loose 27 pound a months.

But guess what? The i-phone 5 comes out! Oh man, I’m a sucker for apple and I start to think “what if…” after all, I am already pay 37 pounds a month and the last 6 months I’ve literally lost that money! So let me upgrade to it, but I don’t want to pay more that what I am paying now.

By the way, it is worth pointing out here that my bills are never quite 37 pounds! Some times you make a call outside your allowance (0800 numbers) or when I am abroad so on average my bills are 40 pounds. But I don’t want another contract more than 37 pounds.

So I go to the shop and there I see advertised on a leaflet the different options. Yes it’s the i-Phone is a new phone so it is more expensive to get a new contract but on this leaflet for existing customers you can get it for free! But wait, you have to pay 39 pound a month. I said no more and I was going to stick to it. So I did some numbers in my head and I thought “8 years loyalty, 2 contracts, I am sure they will give it to me for free” so I went to negotiate with the attendant at the 3 store in Castle Point shopping centre in Bournemouth.

Here is how the conversation went:

Hi, I was thinking about reducing my tariff to 10 pounds and taking an HTC, you will loose 27 pounds a month, that is 540 pounds on my next 24 month contract! That is a lot of money! (I am, of course being cheapish here)

Why are you doing that?

I don’t really use all of the stuff you give me and besides, as you know I lost my i-Phone 6 months ago and I’ve been paying for nothing. So I think I can survive with just 10 pounds and a HTC

I guess if that is what you want… (really? So he is happy to loose 540 pounds? Wired!)

Well there is another option…


I could upgrade and get the new i-Phone…

Good idea.

But I don’t want to pay more than what I am paying now.

No problem (taps away on computer) but you will have to pay a penalty of 89 pounds for early upgrade (it’s only a month away my contract is over) and 79 pounds for the phone.

Why? The early upgrade is crazy as it is only one month, I can wait, but why for the phone?

Because for a tariff of 35 pounds you have to pay for the phone.

I am not paying 35, I am paying 37 and you are giving the phone for free for existing customers.

Only if you go up in tariff and pay 39 pounds.

But I don’t want to pay 39, I want to pay what I pay now which is 37 and have the phone for free.

Well we can’t do that.


Apple won’t let us.

What? It’s nothing to do with Apple.

It’s company arrangements and nothing we can do. If we give it for free Apple will sue us (I smell some sweet BS here)

But why?

I told you, if you pay 35 you have to pay 79 or pay 39 and get it for free! We have to pay apple the 79, they wont let us give it for free!

I told you already, I am not paying 35 I am paying 37! And why can’t you just renew my contract, ring the 79 on the till and then credit back to me, that way Apple is happy, I am happy and you have my loyalty for another 24 months!

So you want us to loose 79 pounds for you? (he give a small laugh)

Now at this point I am about to loos it but I hold on and then I present to him the clear thinking of why he should agree to give it to me for free.

I said to him “do the maths and tell me on which scenario you will loose more money” here is the maths for all of you.

Scenario 1

I change my contract and go down to 10 pounds as originally planed. I loose nothing; in fact gain 27 pounds back, 3 looses 648 pounds (my contract reduces from 888 pounds to 240 pounds for 2 years year)

Scenario 2

He gives me the i-Phone 5 for free and I keep my 37 pounds contract. I loose nothing and sign 24 more months, 3 looses (allegedly) 79 pounds, but gets to keep me and my wife happy so in fact continues to make 888 pounds X 2 for another 24 months.

Scenario 3

He pisses me off by not giving me the i-Phone and I walk away. I will cancel my contract and take my business somewhere else and take my wife’s contract when it expires next year somewhere else. I loose nothing, I take a 10 pound contract somewhere else, with an HTC handset, my wife gets the new i-phone next year with someone like Orange or O2 (I then keep her old i-phone which was mine and I am back on the i-phone, albeit 4) and 3… well they loose, again, but this time 1,776 pounds for 2 X 24 months contracts plus further business plus this article which will expose them as incompetent customer service providers and who know how much more!

Scenario 4 (So not going to happen!)

I get the 39-pound contract and get the i-Phone for free or pay for the i-Phone for 79 pounds. I loose 48 pounds on the first option or 31 pounds on the second by taking my tariff down to 35 and pay 79 for the phone, and 3… they loose nothing. (like I said, this is SO NOT GOING TO HAPPEN!)

So, do the maths, if you were 3, which scenario would you go for? (do not include scenario 4 this is SO NOT GOING TO HAPPEN!)

Yea, I think we all agree, Scenario number 2. All but 3.

And guess what? When presented with this options the attendant at the store just smiled and said, “you can give me as many numbers as you’d like but no one is going to give you the i-Phone 5 for free, it is a new product and no way anyone will give it just like that”

I looked at the leaflet in front of me that says, “39 pound upgrade and get the i-Phone for free” and I looked at him and said “But you do! Here! For 39 pounds a month you give it for free!”

“Yes sir but this is a contract…” and I stopped him, I was not prepared to listen to his policies again, I had enough by now.

“Look” I said “give me the i-phone for free and I stay, if not I will cancel next month and lave, which do you prefer as a company”

“It’s up to you sir, we can’t force you to stay but for sure you won’t get the i-Phone 5 for free”

So, my last words to him:

“Are you telling me you are prepared to loose a customer for 79 pounds?”

His last words to me:

“Sir we loose a customer today, we gain 2 tomorrow”

And with this I walked away.

So I wrote to customer services at 3 and they told them what happened with the numbers I just shared with you, and guess what? They told me the same story so they chose scenario number 3 where they stand to loos everything for 79 pounds.

By the way, I also did some maths in a different way:

If you buy the i-Phone 5, new, sim-card free it cost 547 pounds from Apple. 3 give a sim card only contract for the i-Phone 5 for 12 pounds 50 pence a month for 200 minutes, 500 texts and unlimited Internet, which you can cancel on a monthly rolling basis (good enough for my use). If I do this for 24 months (which would be the length of a contract, but you do have the option to stop at anytime without penalties) it would be 847 pounds for 2 year, what I am paying now for my current contract (actually 43 pounds cheaper if you want to be precise) so I can still get the i-Phone (and it’s mine and sim card free), not pay 3 any more money and in fact save 43 pounds and have the option to tell 3 “stick it up your ****” any time I want!

So in the end, who looses here? Not me that’s for sure!

If you believe I am right and want to let the world know how 3 has just lost one customer and then help me make sure they don’t gain 2 more as they said, share this article with everyone you know and if you are with 3, do yourself a favour, save money and go with someone else who will give you what you deserve!