How to gain market share during the crisis? The American example (1st part)


With the likelihood of a recession rising, some companies are taking extraordinary measures to retain their customers or win new ones.

Even before the economic outlook for the United States darkened and threatened American household finances, companies began to become more commercially aggressive in order to retain old customers and attract new ones. Telephone companies, for example, have offered two months of free communications and reduced their rates, leisure centers are cutting the price of their membership contracts or offering discounts for renewals, luxury stores are offering generous gift cards highlighting a growing fear of an uncertain tomorrow: With uncertainty around the cost of credit skyrocketing, consumers may have gone into a long hibernation.

In New York and its outskirts, door-to-door sales representatives from Frontier Communication, a telephone marketing company, go door-to-door to persuade customers to renew their service contract for another year at rock-bottom rates. These well-planned visits are effective for dual-income households with busy schedules, said Brigid Smith, a spokeswoman for the company. “We know what this financial crisis means for them and we need to communicate with them,” she said.

It’s not just because of economic conditions that Frontière and other telephone marketing companies are trying to retain customers. Continued user interest in advanced technologies, such as wireless, and cable operators’ offerings have also necessitated a more aggressive policy to retain the customer. Verizon communication has seen an average loss of 8% to 9% of its landline customers per year over the past few years, with most moving exclusively to wireless networks, opting for voice over IP (VOIP) or for cable operators, says spokesman Bill Kule. The commercial aggressiveness of cable operators is the basis of Verizon’s Fiber Optic Service (FIOS) offering.

Verizon has long had promotional offers aimed at customers about to look elsewhere, Kule says, but the promotions became badly needed after the company experienced skyrocketing cable subscriber departures. and on landline during the second trimester. Since July, the three services have been offered for the price of two to retain customers who were at risk of going to the competition and to win back business customers who had already left, Kule said. Verizon also invites its customers to extend their contract for an additional year hoping to retain them.

A faltering economy, increasingly aggressive commercial actions?

The scale of the economic crisis may have put cable operators in an uncomfortable position, raising the need to offer more benefits to customers. The reason is that cable and pay-per-view subscribers have chosen to cut entertainment spending and keep a low profile, says Christopher King, a telco analyst at Stifel Nicolaus (SF).

Long before the financial crisis triggered further alarms last month, DirecTV (DTV) had launched a program to retain customers, offering high definition to customers who subscribed to the standard service for an 18-month term. “We are listening to customers who are about to cancel their subscription, and there are groups we go to with promotional offers to encourage them to stay with us,” says Paul Guyardo, marketing manager of Direct TV.

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