I'd go even further than this. Loyalty is one of the most important aspects of business, in fact, it's what keeps most businesses from surviving in the first place. Many companies will even lose money on a client, because it's often more valuable to keep them on as a client, than the money being lost.
PM (Telus), is not losing money on a single subscriber, I can assure you of this. Even the people paying $0, they are paying for themselves tenfold, via their referrals. These companies always do the math, they always leave room for the worst case scenarios, to guarantee they're never in the red.
This decision is simply about greed. It's about them seeing an untapped avenue of revenue, and wanting to take advantage of it. Even though these people who are paying $0 are paying for themselves through referrals, PM believes that they can get these people to pay some money, and they "know" that by removing this legacy rewards program, that'll it'll bring in a ton of extra profit. This is so long as they manage to quell the outrage and damage to their reputation, of course. If that fails, then it may end up costing them far more in the end.
Regardless, my point is, loyalty is hard to come by. Once you have a customer, you wanna keep them. In my opinion, they should have kept the legacy points system around (keeping all of their clients happy, and reputation intact), and then worked on ways to upsell them products, and increase revenue to make up for the profits they wanted to see. This is what most companies do in this situation, because the value of having that customer remain with them, is far more valuable than anything else.
If you're not making enough money on a client, you should get creative:
- push unique add-ons.
- come up with unique incentive programs to convince them to bring in more referrals.
- bring back phones and sell those at a slight markup, maybe accessories too.
- create an entire advertising program that would be deployed through text messages (i.e., a customer signs up to receive these text advertisements from other companies, and they receive $2 off their bill. PM will make profit from this.
- although I'm not a big fan, push more personalized plan offers. For example, if somebody is paying $0 on the $15/250mb plan, offer them $17 750mb, and slowly keep pushing them upwards over time. Make the offers so good that it would be silly to turn them down.
- allow users to give up some of their data to other users, at a cost (i.e., I send 1gb of my data to my friend, but I gotta pay $2 (math would have to make sense so there's no overlapping with add-on data packages)
- not a fan, but give exclusive plan offers to people on the old system, that are attractive, but the caveat is that they would be forced to switch to the new points system upon accepting. This way, you're putting the decision in their own hands. There are ways to even convince a customer to "lose value" on the upfront (the $7 per month), with a nicely tweaked plan.
Increase profits outside of legacy customers:
- introduce a "speed up" addon/feature. When people run out of data, and they're now on their throttled unlimited data, give them the option to pay some money to either increase that speed or return become non-throttled for a temporary duration (i.e., pay $2, get full speed for 12 hours).
- take more advantage of your forum, allow people to purchase enhancements to their profiles. Simple fancy badges, whatever. Broaden the forum and create frequent contests and lotteries, so people will participate more, thus increasing your audience for these potential purchases.
- introduce a customer service line, but one that has to be paid for. If you want the free service, go ahead, use the CS Agents, but if you want priority service, pay $2 and talk to a human (again, make sure the math is correct and profit is being made).
- find a way to siphon more Public Points from people, by offering up creative rewards. A lottery system is an example "pay 2 points, and you have a chance to win 150 in our weekly lottery!". You'd be surprised how many people would ditch their points for things like this. And of course, you'd make a lot of profit. Could even set up an automatic system where people can opt in to automatically donate 2 points to this lottery each week/month.
- allow people to use points for fancy forum-related content (mentioned above), as well.
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Anyway, I could be here all day, but you get the point. Some of these are dumb, but it's just about being creative. The point is, there are ways to increase profits, without harming your reputation, or without angering and losing customers. If they're gone, you no longer have a chance to extract any money from them whatsoever, and if they leave due to anger, you may also never have a chance of getting them to come back. So I believe the best option is always to just keep them on as a client, and extract profit in other ways. Something is better than nothing.
