Optus decides the existing customer comes first
Optus consumer business division head Vicki Brady has revealed the company's prime focus is improving returns from their existing customers. She said the future was "about looking after existing customers, ensuring we give them good reasons to be loyal and stay with us".
Telstra is the only telco making headway in attracting new customers, largely through its first-mover advantage through the launch of its new high-speed 4G network.
The Singapore Telecommunications-owned Optus added only 53,000 new customers over the six months ending December. Telstra attracted more than 600,000 customers in the same period, about half of which were new 4G customers.
Ms Brady said the launch of new phones such as the iPhone 5 used to be a major promotional event to attract new customers, but instead Optus chose to use it as an opportunity to retain its existing customers. "Last year, we took the completely opposite approach. We heavily allocated those [iPhone 5s] to our existing customers [about 80 per cent]."
The company is also looking to have better control over its retail distribution network by building new Optus-branded shops and terminating resell arrangements with retailers such as Telechoice and Allphones.
"As part of our transformation, we are actually moving into a model where Optus will own more of these stores," she said.
Ms Brady admitted the telecommunications industry had a reputation for bad customer services, noting "it is clear we are not meeting customer expectation generally across our industry today". A recent Optus survey showed the industry ranked second-last in terms of customer service.
Frequently Asked Questions about this Article…
Optus says tough mobile market conditions and saturation — with handsets now outnumbering people — mean there’s limited room to grow subscribers. Company executives have therefore prioritized getting better returns from existing customers by giving them reasons to stay loyal rather than aggressively chasing new sign-ups.
Over the six months ending December, Optus added about 53,000 new customers, while Telstra attracted more than 600,000 customers in the same period, roughly half of which were new 4G customers.
Telstra’s first-mover advantage in launching its new high-speed 4G network has been a key factor helping it attract a larger share of new customers compared with competitors.
Instead of using major handset launches mainly to lure new subscribers, Optus allocated the iPhone 5 largely to existing customers — about 80% — as part of its approach to retain its customer base.
Optus is moving to have tighter control over retail distribution by building more Optus-branded stores and ending resell arrangements with some retailers such as Telechoice and Allphones, shifting toward a model where Optus owns more of its stores.
Optus’ consumer division head Vicki Brady acknowledged the industry has a reputation for poor customer service and said it’s clear telcos are not meeting customer expectations generally. An Optus survey found the industry ranked second-last for customer service.
Optus is owned by Singapore Telecommunications (Singtel). The article notes Optus’ strategy shift toward existing-customer focus and retail control under its current ownership.
Investors may want to monitor Optus’ customer retention and churn metrics, new customer additions versus competitors, rollout and performance of Optus-branded stores, and any published customer service indicators — all areas highlighted in the company’s shift toward prioritizing existing customers.
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