22 March 2005

Maxis, oh Maxis

Maxis is a telecoms provider in Malaysia. It professes to have a strong brand. Why? Well, because they spend a bundle on advertising and promotions. Barely a day passes without a Maxis advertisement in the papers, on the radio, on TV a billboard and so on.

Vicious price wars and spectacular offers are increasingly common as competing firms attempt to get consumers to switch providers. But once they’ve spent millions convincing consumers to sign up or switch providers, what do they do with those consumers to ensure they stick around so that they can make a profit from them? Well, practically nothing!

My wife and I are probably a rare breed because we have Maxis at home but use a competitor provider for my mobile service. We’ve had Maxis at home since 1998, we spend, and this is a conservative estimate, around RM500 (around US$150) per month. That adds up to around RM42,000 (more than US$10,000) revenue since 1998. For someone to use a service for around seven years, they must be happy with it.

Furthermore, Maxis must know that we don’t use their Maxis mobile service. That makes us a hot prospect. And yet what do they do when our bill is a week or two overdue? Well, you’d expect them to give us a call right? Ask if we have made payment or if there is a problem that has delayed our payment. If they are too busy to contact us, you’d expect them to at least send us a warning letter, right? Wrong, they just cut us off! Not once, but three times in the last year! Haven’t these guys heard of customer retention? Don’t they know that once you have a profitable customer, you do what you can to hang on to him! Don’t they understand that expensive acquisition campaigns do not build profitable brands?

Wake up Maxis! A brand is not built on ads, a nice logo, jingle or the awards your advertising agency wins. A brand is built on the lifetime value of your existing customers.
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1 Comments:

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