Globe's Loyalty Program Gone Wrong

I don't understand the logic behind Globe Telecom's loyalty program.

Typically, a new mobile phone subscriber is required to maintain a postpaid line for 2 years. This is standard industry practice here in the country.  I think this is to recover the acquisition cost and other marketing costs associated with new subscriptions.  After the 2 year holding period, the subscriber is now free to move on to another service provider.   Hence, like any other business, it is very critical that Globe has a very good retention program in order to decrease customer churn rates.

For a new subscriber, Globe is willing to provide incentives like a free phone.  It is very aggressive in recruitment but it is not so with respect to retention.  I know that Globe has a loyalty program.  But sadly, I have never been entitled to one.  I have maintained a Globe line for 9 years and in all that time, I was never afforded a reward for my loyalty. Globe is very selective in choosing who they reward.  I do not know the criteria by which it decides whose subscription behavior is worth rewarding or not, and apparently mine is not.

I made a quick call today to inquire about the loyalty program, but the customer service representative explained to me that the loyalty program is offered on an on-and-off basis.   There has been no advice from the Globe head office yet as to when they will offer it again, so she just advised me to keep on calling them to inquire about the rewards.  BIG DUH!  That is not rewarding at all.  That is NOT making me feel like an important customer, that is reducing me to begging.  Is that the way Globe treats customers?  I thought customers are king.  Do we have to be paupers?  This is really beyond my comprehension.  

Here's where the customer development policy of Globe puzzles me.   If I TERMINATE my line now and apply for a new line, I CAN avail of a new phone for FREE.   Essentially, I will still use the same customer details, maintain the same service consumption pattern, except that my cellphone number will change.  So why not just give me the free phone NOW (using my same number)?  I simply do not get the business logic.  There won't be any NEW business created.   There won't be any incremental revenue generated, rather an additional expense on top of the free phone will be incurred, i.e.,  Globe will have to retire an old number, execute a new agreement, re-encode new customer details, etc.

Globe will spend precious marketing pesos to get an ARTIFICIALLY new account (me) but will not bother to spend a single centavo to prevent me from defecting.  What kind of strategy is that?  Perhaps Globe just believes that there is an exit barrier for subscribers.  After all, it sure is a hassle to change your number every 2 years and send your new number to all your contacts.   But for many customers like me, I will not mind changing my number if doing so will mean I can get a new phone for free.

Any marketing practitioner knows that it costs much, much more to get a new customer than it is to retain one.  What is worse, any deactivation of account will represent a discontinuity of data. Perhaps Globe just has a very sophisticated CRM (customer relationship management) software that allows it to read and analyze customer metrics using an account number that can be reassigned to multiple mobile numbers.   Nonetheless, it will still represent a migration of customer usage data and it would be far simpler if the data to be analyzed just covers one mobile number.

Moreover, with old customers trying to disguise themselves as new customers, the new enrollment rate tends to be artificially bloated.  Now, is this a window dressing tactic that Globe employs so that it will fare comparably well against other companies like Smart or Digitel?  

Globe is a leaky bucket.   What Globe is doing is just continuously pouring in water in efforts to maintain or increase the water level.  But what it needs now is to plug the holes to prevent water from leaking out of the bucket.   It is good in offensive marketing, but what about defensive marketing?

Smart Communications fortunately gets it.  As early as the 18th month into the subscription, Smart already starts to offer its subscribers a range of free phones to choose from.  And when customers get a new phone, they are required to stay on for another 2 years, just like any new subscriber.   As you can guess, the objective is met.   The existing subscribers have an incentive to stay.  Smart gets the benefit of loyal customers without the headache of deactivating old numbers and activating new ones.

I am so tempted to switch to Smart.   I have changed my Globe number far too many times already.  And besides, the free phone offers from Smart are much, much better.   Globe really has to get its loyalty act together.