T-Mobile’s UnCarrier Plan: Powerful Strategy for Customer Acquisition and Retention

By Vignesh Subramanyan | Small Business

As most of us have heard by now T-Mobile has introduced a new Jump Program that allows customers to upgrade their phones with ease. The plan is simple:

  • You can upgrade your phone twice in 12 months
  • Your old phone must be traded in a reasonably “good condition”
  • You can purchase a phone by paying the full price right away or by paying installments for 2 years
  • When you upgrade a phone, your previous monthly payments are wiped clean and you start fresh

This service, that will cost $10 per month, requires that a customer be enrolled in the Jump plan for at least 6 months before the first upgrade. The innovative program also serves as an insurance plan that protects your phone from any damage, loss or theft. This program goes live on July 14th, 2013 and will serve as a new concept in the traditional 2-year contract industry.

T Mobile’s UnCarrier Plan: Powerful Strategy for Customer Acquisition and Retention image TMobile 600x105T Mobile’s UnCarrier Plan: Powerful Strategy for Customer Acquisition and Retention

Image Source: Wikimedia Commons

T-Mobile’s new plan is a complete contrast from its competitors such as AT&T and Verizon, who altered their contracts to a full 2 years, an increase from the original 18-months before an upgrade is available. Although T-Mobile is shying away from the norm, the decision is not without a plan. As T-Mobile’s Marketing Chief states, “We think we can make a big market in refurbished devices.” Since the Jump program will vastly increase their inventory of used phones, T-Mobile aims to sell or re-use a majority of these phones. This strategy provides the company an additional source of revenue while also portraying the brand in a positive light to customers.

This plan is not only a passionate attempt by CEO John Legere to offer customers a hassle-free way of upgrading, but also an important attempt by T-Mobile to retain existing customers. With the industry suffering lower than usual average retention rates, T-Mobile’s Jump Program may offer just enough of an incentive for customers to stay put with one carrier. T-Mobile has also announced the addition of the iPhone to their lineup, which may bring back some previously unhappy customers.

The Jump Program provides some long awaited freedom for smartphone connoisseurs, such as iPhone users who previously had to skip a generation due to the 2-year contract, along with lucrative business opportunities for T-Mobile. Although it may be too soon to discuss device unlocking and the extinction of service contracts just yet, T-Mobile has definitely opened up some exciting new possibilities for phone carriers.

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