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jaime90210
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Existing Customer Offers

I was told as an existing customer that I couldn’t take advantage of the new customer offer of £46.99 for M350 + Phone and was instead told the lowest price I could pay was £63. I asked for a Super Hub 4 to make it worth my while and was told this wasn’t possible. Why is this? If new customers are paying that why was I charged the higher price? I think you should reward your existing customers too. 

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japitts
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Re: Existing Customer Offers

Many service providers across telecoms, indeed many other industries, all have "new customer" incentives to encourage new business.

VM will often give you a discount on the standard prices for particular bundles/services in exchange for a new 18month contract, but to expect that to be the same discount as offered to new customers, is - rightly or wrongly - unrealistic.

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chris361
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Re: Existing Customer Offers

Why not, please explain

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DJ_Shadow1966
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Re: Existing Customer Offers

Hello

Regarding the hub 4 that is only available in  1gbps areas for customers who have that service and by invite for some other customers who are in high utilization areas but still that area has to be 1gbps enabled.

Regarding why you cannot get new customer discounts as these are normally at a loss to Virginmedia to entice new customer to join and not for existing customers if they offered the same to existing customers the company would not be in business for very long.

Regards Mike

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chris361
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Re: Existing Customer Offers

Thanks,

So the bottom line is that existing loyal customers are subsidising new customers, what a great business model that is. Why don't they just flatten the pricing out across all customers and make it fair for everybody

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apcyberax
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Re: Existing Customer Offers

£63 a month is the correct going price for the M350+phone

The hub 4 is only included for gig1 customers. for M350 the Hub3 is the current kit

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apcyberax
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Re: Existing Customer Offers

you are not loyal if you won't pay the going rate.

You would have had a deal when you joined.

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Andruser
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Re: Existing Customer Offers

 

VM operate the same "bait and switch" practices as other telcos, energy suppliers, insurers, breakdown & household service companies.  They all offer heavily discounted pricing to attract new customers.  They have also got wise to people asking for discounts.  If (as I suspect) they're like the large customer service companies that I've worked for, then the following principles will apply:

1) All companies see customers drifting away over time for different reasons.  Just to keep customer number stable, discounts are offered to entice new customers because no discounts means uncompetitive pricing and no new customers.  And once they've got a customer onboard there's the prospect of upselling on speed and cross selling other services like TV packages, wifi boosters and mobile contracts, which can be very profitable add-ons.

2) Around half of all customers will accept the out of contract price when an introductory discount ends.  There's complicated modelling of customer attrition rates over time that are used by the pricing teams when designing introductory discounts, and the whole practice relies on a small number of customers who will stay with the company on an undiscounted offer for years.  Some leave immediately, some (like you and I) phone up and ask for a discount, with varying levels of success, some stay on the undiscounted rate for a few months before leaving or renegotiating.  This is important, because it means the net present value of future cash flows from an "average" new customer will be greater than for an existing customer offered the same discount, because the company's modelling will indicate existing customers who get a discount are far more likely to ask for a repeat discount every time the last one ends.

3) Even then, existing customers who negotiate are not all offered the same discount - complex modelling and behavioural analytics are often used either at an account or a segment level that take account of how likely they think a customer is to leave, how much that customer pays and what services they take, along with location and demographic data.  I would expect that some customers will not under any circumstances be offered a discount, eg if an area has a big queue of people wanting to join, but not the capacity to accept them, or maybe if the customer is on a low margin product like 100 Mbps broadband only.

4) Even the maximum available discounts vary daily or weekly, depending on competitor marketing campaigns, customer loss/retention numbers, and whether VM are happy or worrying about what their parent company has to tell investors that quarter.

5) VM's first offer of a discount is never their best offer, but the retentions agents have rules for what discounts can be offered.  So phoning and complaining about price and hinting you might leave might get you a couple of quid off, a more convincing threat to leave might be four quid off, a threat to leave with a valid knowledge of somebody else's discount pricing might be six quid off.  Somebody who actually cancels will (unless they are on the "no discount" list) often be subject to win-back efforts, and they'll get even better offers during their months notice period, occasionally at or even below new customer pricing.  That gets you the best price, but if for one of the several reasons mentioned above they DON'T phone and offer you a discount then you need to plan accordingly.  Consider that if you had broadband and phone, you gave notice but didn't have another supplier contracted, you would lose your landline number and any VM email address.

The retentions agents are on bonuses to retain customers but give away as little discount as appropriate, and they are trained in this, and they do it day in day out, compared to you or I doing this a couple of times a year for different services.  So it isn't a level playing field, and if you want a better discount you need to be prepared.  Although not all will apply to you, see this post.  

 

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chris361
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Re: Existing Customer Offers

Did I, I cant remember that far back to when it was Telewest

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Andruser
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Re: Existing Customer Offers

@DJ_Shadow1966 if they offered the same to existing customers the company would not be in business for very long.

VM's average revenue per cable user is around £51 per a month, which indicates that the majority of customers are either "new" customers churning in for the discount and leaving at the end, or they are existing customers who have negotiated a discount.  And whilst the small proportion of "full price" customers may themselves be profitable, Liberty Global made losses from continuing operations in 2019, 2018, 2017, 2015, and are on course to do the same when full year results are in for 2020. 

LG is a corporate finance game, where the principle shareholder isn't worried by the operating performance, they intend to make their money by keeping the ball rolling with gushing quarterly investor updates full of selective data, and cashing out when the time is right to flog their stake in the group.  When the O2 merger is complete, but before the five year transformation plan is complete, that would probably be a good time to cash out.

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