U.S. Cellular wants to fundamentally change the face of the wireless industry, and if it succeeds, it will not only stay in business, but will lower its postpaid churn and add gross additions of at least 10 percent at the same time.
“We’re going to really be changing the fundamental rules of the wireless industry,” says Alan Ferber, executive vice president of operations at U.S. Cellular. “We think there’s a unique opportunity to show the market there is a reason to believe there’s something better out there … We think the industry is ready.”
Teased with a countdown and external website here, The Belief Project includes “One and Done” contracts, whereby customers do not need to sign another contract when their current one expires. It also involves a rewards programs with points that count toward getting handset upgrades sooner than normal; protection against “bill shock” with overage protection, caps and forgiveness; a phone replacement program; and savings of up to 5 percent off monthly bills for setting up auto pay and paperless billing.
U.S. Cellular executives say they heard wireless customer frustrations and set out to fix them. They intend to keep their own customers while enticing others to switch from other carriers. The program rolls out tomorrow and marketing will include TV spots that focus on a “wake up” message touting the new strategy.
Brent Iadarola, global research director for mobile and wireless at Frost & Sullivan, says U.S. Cellular’s strategy is likely to resonate with consumers and could be a game-changer for the wireless industry. In fact, he says, the model could very well ignite a long overdue paradigm shift in the U.S. wireless market, shifting form the traditional model of contracts to a no-contract, rewards-based structure.
It “clearly appears to be a win-win for both the consumer and the carrier,” Iadarola says. “The approach enhances the value proposition from the customer perspective (by eliminating contracts and early termination fees), while driving acquisition and loyalty for the carrier through protection and rewards.”
The program might be viewed as the result of CEO Mary Dillon joining the company this year, but it was actually under way before her arrival and U.S. Cellular incorporated the benefits and expenses associated with The Belief Project in its 2010 financial guidance from the beginning of the year.
Some programs have been ongoing for a while now, like the Battery Swap, My Contacts Backup and Free Incoming Calls, Texts and Pix. New ones include the “One and Done” contract policy, rewards points and earlier phone upgrades.
The One and Done deal means new customers who fulfill an initial two-year commitment with U.S. Cellular will not have to sign another contract. Existing customers can finish the remainder of their current contract on a National Single Line or Family Belief plan without extending it.
A common frustration of many consumers is having to wait two years to upgrade a handset without penalty. The standard phone upgrade time under a Belief Plan is 18 months, but U.S. Cellular says its customers can upgrade a phone as early as every 10 to 11 months depending on their plan by redeeming their Belief Points.
With the rewards program, all postpaid customers on Belief Plan can get points for being a customer, with points redeemed for things like earlier upgrades or ringtones. Points are earned based on a customer’s monthly service plan, the number of lines on the account and how long they’ve been a customer. There are no blackout or expiration dates for active accounts.