Router upgrade for existing users. Poor handling?

Posts: 216 · Posted: Wed Dec 14, 2005 11:23 am Post subject:

OK, so what I was recalling was actually from a PM that I received from a Vonage rep. back in July. Here a quote from the actual message:

Quote:

Well just for information purposes, we don't swap old devices, YET! They are working on a system for that in the future. The only way they will swap that old device is if you say its faulty.

Posts: 8 · New Forum Member Joined: Dec 12, 2005 Posts: 8

for at least giving me hope. It's pretty poor that we can't even buy it at full price from our own Voip provider, let alone at a slight discount for a trade-in. Vonage is obviously going to have to feel their way through this issue but if enough existing customers make it clear that they need to be taken care of a little better when it comes to upgrades then maybe they'll get there quicker. hmmmm, wonder how we'd go about that?

Posts: 2257 · Posted: Wed Dec 14, 2005 11:36 am Post subject: Re: thanks

septic22 wrote:

for at least giving me hope. It's pretty poor that we can't even buy it at full price from our own Voip provider, let alone at a slight discount for a trade-in. Vonage is obviously going to have to feel their way through this issue but if enough existing customers make it clear that they need to be taken care of a little better when it comes to upgrades then maybe they'll get there quicker. hmmmm, wonder how we'd go about that?

This one's always an interesting issue.

Vonage needs to increase their customer base. They've already (in theory) given you some sort of concession when you joined, whether it be a free router (as in my case, regardless of my feelings on the quality of said router), a free month of service for you and/or someon who referred you, etc. They expect to make their money back by having you as a customer for a while. That's why they charge the cancelation fee for customers <1 year. To reclaim that "lost leader" money.

On the other hand, customers who have been around for a couple of years and are stuck on old devices DO need a way to get on more modern gear. It is kinda silly that the only way a loyal customer can upgrade their old gear is to cancel their contract, lose their number, and get new gear and a new phone #.

I suspect they will eventually get smart and develop the same model as the cell phone companies. The initial device is free or discounted, you can swap out devices as often as you want if YOU pay full for them, and you can do a free or severely discounted device swap/upgrade every year or two, just like a new customer.

That way, they get to "reclaim" the lost money at startup through the customers fulfilling their contracts for a year or two, and they get to retain customers by allowing them reasonably frequent low-cost equipment upgrades without giving them away too frequently.

Posts: 8 · New Forum Member Joined: Dec 12, 2005 Posts: 8

I would gladly sign a yearly contract, committing me to pay if discounted upgrades then became an option. Here's hoping that something that caters to existing customers comes along eventually.

Posts: 18 · Posted: Wed Dec 14, 2005 7:20 pm Post subject:

Nate,
You neglected to say that the cell phone company requires a new 2 year contract each time you take advantage of their upgrade offer.

Posts: 8 · New Forum Member Joined: Dec 12, 2005 Posts: 8

he mentions it toward the end and makes a good future suggestion for Vonage in the process. Damn I wish I could get that F1000 and get rid of my second router....

Posts: 2257 · Posted: Wed Dec 14, 2005 7:59 pm Post subject:

WDBryant wrote:

Nate,
You neglected to say that the cell phone company requires a new 2 year contract each time you take advantage of their upgrade offer.

Well, in a way, so does Vonage.

If you cancel in the first year after a "special price" (eg. after you sign up), you have to pay a cancellation fee of $40. With the cell companies, you generally have to pay a lot more, true (like my now-useless Cingular cell (I no longer have much use for a cell, though the service is great and I'm happy enough with Cingular per se) that has 8 months left, but which will cost me $175 to cancel), but other than that the idea is the same.

Vonage just words it differently. Instead of saying you are "committed to a contract that will cost you to cancel", they say that you can "cancel at any time", but that "a special early termination fee applies". Same deal, except Vonage's cancellation fee is FAR more reasonable, and they market it differently.

I would fully expect Vonage to say something like "you can have a router upgrade at a significant discount after you complete your one-year commitment to us, but that resets the clock on the $40 cancellation fee." Maybe that or you pay the difference between the discounted price and full retail if you cancel within a year. That would be a perfectly reasonable and legitimate demand for them to make, since they are offering a special upgrade or deal, and as a business they want to reclaim the money from that, of course.

Either way, it gives loyal customers a way to upgrade their equipment at a discount. Otherwise, loyalty is actually being PUNISHED, since you are paying the ongoing rate that reflects a "special startup deal" you got a long time ago, and you're better off cancelling and signing right back up again to get upgraded equipment. Either that or they can offer a $2-3 a month discount after the first year, if you elect NOT to get a hardware upgrade, since there's no discounted hardware to reclaim costs from any more.

Posts: 8 · New Forum Member Joined: Dec 12, 2005 Posts: 8

I'm not alone in thinking we're being hard done by then. Excellently put argument sir. I'd be happy to pay the discounted price on condition that I paid the difference if I cancelled in the following year. Now if only we could get the CEO of Vonage to read this at exactly the same time he has a moment of clarity......Seriously though, not only would it work for us but I think in the long term it would work for Vonage as the world slowly turns to Voip and competition heats up. Customer retention will be crucial.

Posts: 2257 · Posted: Thu Dec 15, 2005 8:04 am Post subject: Re: Hurrah!

septic22 wrote:

I'm not alone in thinking we're being hard done by then. Excellently put argument sir. I'd be happy to pay the discounted price on condition that I paid the difference if I cancelled in the following year. Now if only we could get the CEO of Vonage to read this at exactly the same time he has a moment of clarity......Seriously though, not only would it work for us but I think in the long term it would work for Vonage as the world slowly turns to Voip and competition heats up. Customer retention will be crucial.

Yes, well, I think Vonage will probably wake up and smell the packets at some point in the near future. Remember, these guys are in a totally new business - marketing a former geek toy (VoIP) to non-geeks. It's an "aggressive" goal to start with.

I wouldn't be at all surprised if they are finding out that, with the canceled accounts due to bad Internet connections, the massive handholding due to selling this stuff to the "technically declined" (no offense), and the fact that they are spending huge efforts trying to stabilize firmware to the point where these devices can handle all the various scenarios that a land line switcher can handle... well.. they probably lack the resources (financial and otherwise) to get into an en masse exchange program.

I'm sure Vonage isn't hurting for dough, but offering customers an exchange is a huge short-term cash outlay, and it benefits them not a bit in terms of income, only in customer retention. And, seriously, once you get into Voip and get used to $25 a month for unlimited calls, most people would be reluctant to cancel. Price is their retention factor right now.

Some will cancel and re-sign. That will cost Vonage *LESS* than if you asked for an exchange of devices, because they don't have to coordinate a MAC swap.

Some will go out and buy a new device and ask for a MAC swap. Again, since Vonage doesn't have to give out devices, it costs them less.

A few will cancel outright and not look back. But, where are you going to go? Another Voip provider? Great, but Vonage is the cheapest of all of them. Would you really commit to losing your number, and spending $5-10 more a month, or more, just because Vonage won't give you a $50 device?

They'll start a swap at some point, no doubt, but it'll take a while to justify the up front cost.