How to Get a Retention Deal From Your Telco

How to Get a Retention Deal From Your Telco

A Vodafone customer exposed the telco on social media for trying to pull what can be interpreted as a shady move. Apparently, Vodafone offered the customer what it characterised as an “upgrade”, but was really a more expensive plan for less features than the customer already had on a less expensive plan.

What? That’s right — the customer was previously on a $40 SIM Only non-contract plan that included 40 GB data, and Vodafone sought out to “upgrade” that plan to a $45 SIM Only 12-month lock-in contract plan with 30GB of data. The customer’s social media exposure resulted in a number of mocking comments from several consumers, leading Vodafone to try and clean up its mess later on.

There’s a bigger picture here: Retention deals. There’s a great chance that this customer, after exposing Vodafone on social media, was offered a nice deal to stay on as a customer. In fact, the telco eventually tried to clean up its mess by attempting to sweeten the deal, explaining that the new deal’s data inclusions avoid overages. That is, the 30GB are at maximum speeds, after which the customer can continue using as much data as she/he wants without any overage charges, although the data speed will be throttled to 1.5Gbps at that point.

However, the “upgrade” initially offered clearly didn’t include such language:

Vodafone exposed by customer for shady offer.

Vodafone alerts customer of an “upgrade” via text. Comparing both plans, though, the “upgrade” was actually a worse plan than the customer already had. Source.

Whether the throttled deal was what Vodafone initially meant or if this was their way of trying to sweeten the deal to keep the customer on board is anybody’s guess. We tend to believe the latter.

One thing is clear though: Exposing your telco and/or making them aware of your dissatisfaction almost always leads to your telco offering you a much better deal IF you threaten to leave. Such offers are referred to as customer retention deals, and telcos actually have entire departments and plans dedicated to such scenarios.

What are retention deals and how do I get one? 

Retention deals are offered by telcos to keep you, the customer, from going anywhere. They’re not the plans that you see in everyday ads or offers — they literally are only offered when you threaten to leave.

The discussed customer that mocked Vodafone had a 40GB no-contract plan at $40 per month. A couple of years ago, when that deal was likely acquired, that would have been insane value.  Thus, there’s a good chance that the customer in question was actually on a retention deal for a while. That is, there’s a good chance the customer threatened to leave to another telco and was offered that valuable deal as Vodafone’s plea to stay on board.

Vodafone’s further attempt to clean up their mess after being mocked on social media due to the unhappy customer’s exposure of their attempt to try and downgrade his current plan could also be described as a retention deal. There, they rephrase the new offer to include a feature that throttles data after plan data is exhausted, essentially keeping the customer connected forever without overage charges.

The threat to leave, resulting in a better deal, works quite often. In today’s competitive telco market, no telco is excited about losing a customer — today or ever. Perhaps the same can be said about any business. And when the competition’s deal is obviously better, the threat to leave is certainly not viewed as a bluff — the customer is highly likely to be serious about leaving.

As a result, telcos reach deep into their bag of plans and pull out their retention deals. These offers are usually tucked away and hidden, not advertised where customers can easily find them. They’re designed to be sweet enough to keep the customer on board, and they have always been there for that reason only.

Perhaps that’s where the questions lie. If these great deals are actually available, and are sustainable for the telco as a business, why hide them from loyal customers who haven’t threatened to leave? Isn’t loyalty what businesses sweat for in their customers?

Why do telcos hide great deals from loyal customers? 

Retention deals are exactly that — for retaining customers. In the telco’s eyes, loyal customers aren’t going anywhere, regardless of how bad a deal they’re getting. In other words, why offer them such a great deal when they aren’t even complaining? Further, if retention deals were offered as normal deals, then what would the telco offer those who still threaten to leave?

But these deals don’t last forever. For example, assuming we’re right that the Vodafone customer’s valuable $40 for 40GB was actually a retention deal. That would suggest that the new “upgrade” (or downgrade, in reality) was an attempt to realign that customer with current Vodafone plans by downgrading the inclusions to normal.

Yes, Vodafone later tried to explain its $45 for 30GB offer as a better plan — an upgrade — because it eliminates overage charges by throttling speeds to 1.5Gbps after the 30GB data is exhausted. But this, in itself, was likely a retention deal as well after being publicly exposed and mocked.

But even this new deal wasn’t much of an upgrade compared to the previous plan because it cost $5 more, and the telco ignored the lock-in contract requirement for 12 months, where the previous plan lacked that requirement. So it was probably a further half-ditched attempt to realign the retention deal customer with current plans.

Type of ActivityData usage over the month
25 emails per day0.02 GB
100 emails per day0.09 GB
50 pages viewed on your web browser per day0.57 GB
100 pages viewed on your web browser per day1.14 GB
5 minutes video/movie streaming per day0.44 GB
15 minutes video/movie streaming per day1.32 GB
45 minutes video/movie streaming per day3.96 GB
1 HD movie per day60.00 GB
15 minutes of music streamed or downloaded per day0.44 GB
45 minutes of music or downloaded per day1.32 GB

Most consumers aren’t heavy data users — the typical internet needs don’t require a lot of data. Only heavy users and streamers require more. Source.

Even assuming Vodafone’s new deal was better, who actually needs that much data?

The fact that Vodafone took it upon themselves to decide what was better for this customer is a blunder in itself. What’s worse is the shady nature of the offer, which is clearly worse than what the customer already had.

However, in an attempt to save face and retain the customer, Vodafone sweetened the new offer to include a feature that keeps the customer always connected with throttled data, as opposed to data overage charges.

But who needs really needs that much data? Not enough customers for it to be a valuable deal. Vodafone, though, made such an offer anyway, knowing this fact. That fact of most customers not needing that much data in the first place, makes the throttled data feature useless because such customers will likely never get to use the throttled data. Thus, the additional $5 would be a waste on the customer’s part, but a gain on Vodafone’s part.

Final words

Vodafone is falling behind in passing data savings down to customers, unlike other telcos such as OVO. Tricks like these are hardly a good method of attracting customers, but Vodafone seems to be out of touch in that area. That’s why you should always compare telcos and plans to get the best deals — you can compare Vodafone to the best of the rest or other Vodafone plans here.

It’s also a great idea to always voice your dissatisfaction with your telco and, perhaps, threaten to leave. You’d be surprised what kind of sweet retention deal you’d get in return. To continue on that sweet deal or get an even better one, just remain equally dissatisfied when they try to sneak in a downgrade as an “upgrade”.

Neil Aitken

Having worked in 3 countries for 4 telcos on both voice and data products, Neil is in a position to give you the inside track. Get beyond the marketing messages to the best plan for you.