stoke said:
SHORT: I just don't think that customer loyalty will cut it.
Very true. As I said I did some marketing courses years ago, in 97 so its very far back in my mind. Telkom has never needed customer loyalty.
The Reason: If you are not happy with a service and or product you change to something else.. Up to now we have not had another choice. Granted now days we do have other choices but once again if you have to compare them Telkom does unfortunatly still have the better service. So its that attitude of " If you dont like it go somewhere else" That is the crappest customer services out but their isn't anything we can do about it.
From my courses I remember that the easiest way to convince a purchaser to buy your product was to convince him that he needed the product. Customers are divided into 3 catagories. Those that Need the Product, Those that want the Product, and those that dont need/want the product. (Its pointless trying to sell Snow to an Eskimo)
However if one is able to convice a customer that they really do need the product through effective marketing you can create a larger customer base by creating more people in the "want" Catagory, who believe they need the product. The best marketing is word of mouth from friends and its free. So keep your customers happy and loyal and they will attract more customers
Currently most people do not "NEED" ADSL and can get by without even if it is painful, There are of course the people who do need it for their business applications and so on. It was mentioned above that who knows what it might be like in the future when ADSL and internet access is a product you can not do with out, just like running water and phone lines.
Those that are in the want catagory, usually spend their money first on things they need, If they have money left and are convinced that their "want" is great enough, will purchase the product. There are a **** load of people in the "want" catagory but there could be more, but they can not afford it. By dropping the price you widen this market and allow more people to fill this gap.
So for example:
You have 1000 people paying R1000/month . Thats R1 000 000/month
Now drop your price to R500, and assume you at least double your target market, You are again recieving the same amount per month. Of course with the way technology is going I'm pretty sure you would more than likely triple that market so would in fact have R 1 500 000/month
Using a figure of say 50 000 users that is R50 000 000/month if you can triple the current market by widening the "want" customer base, thats R75 000 000.
Of course with a New SNO you would lose at least a 3rd of your current customers, meaning you are once again back at your original starting figure of R50 000 000. Doesn't seem bad to me for losing a 3rd of your clients!
BUT if you clients are loyal to you because of a better service. You would not lose that 3rd of your clients due to customer loyalty, So in the long run you end up scoring more.
Only problem with this is the total amount of bandwidth allocated. By tripling the total client base Telkom would very very quickly run out of their allocated bandwidth (I'm not sure about this but as far as I know they are already selling more than they own, and some of the big corporates ie Microsoft, Bayer Pharma, etc are not too happy about this as it is),
So it comes down to Telkom needing more bandwidth before the can increase that client base. So right now they dont give a damn because I guess they still dont need customer loyalty because we have no choice. With the new SNO though that will become an issue. But by that time it will be to late for Telkom, though i'm sure they will still find a way to screw us over
Or am I completly off the beaten path here?
