Cellular firms fight to retain customers Emphasis placed on personal service

August 18, 1991|By Leslie Cauley

When a Baltimore doctor threatened to cancel his cellular phone service because he didn't have time to take his BMW to the shop for antenna repairs, Bell Atlantic Mobile made him an offer he couldn't refuse: A service representative volunteered to take the car in.

"I think it shocked him that we would do that," said Cary Stanek, a customer service specialist for Bell Atlantic Mobile (BAM), the cellular arm of Bell Atlantic Corp. "He stayed with us."

Score another one for the BAM retention unit, a service SWAT team whose sole mission is to keep customers on the Bell Atlantic network. BAM service reps don't typically offer curb service. But they do hit the pavement and, if necessary, knock on doors to appease dissatisfied customers, says Douglas Klees, manager of the eight-person unit.

Cellular companies are moving aggressively to boost customer service these days, as the high-flying industry gets its first taste of a slowdown.

In 1991, cellular companies will see a net gain of only 1.7 million subscribers -- the first year that subscriber growth has slowed -- says Herschel Shosteck of Herschel Shosteck & Associates, a Silver Spring-based cellular consultancy. About 1.9 million subscribers signed up for cellular service last year.

That dip has sent a chill through the industry. To keep growing -- and to avoid costly customer recruitment -- companies such as Bell Atlantic and Cellular One are working hard to retain customers.

The greater emphasis on customer retention is likely to translate into better service, features and pricing."It's a lot better marketplace for the consumer because it's forcing us, both Bell Atlantic and Cellular One, to service our customers better," Tim Morrisey, Cellular One's general manager, said.

BAM and Cellular One control the Baltimore-Washington market. year-end, BAM will hold 57.5 percent of the region's estimated 6.9 million cellular customers, according to Mr. Shosteck. Cellular One, which is owned by St. Louis-based Southwestern Bell, controls the remaining 42.5 percent.

BAM set up its retention unit in June 1990. Nicknamed the "save" unit, it is the company's last line of defense against "churn" -- the industry term for cellular customers who cancel their service.

Rival Cellular One doesn't have a special retention team. But it is increasing its customer service unit from 18 to 40 people, Mr. Morrisey said. Like BAM, the mission of Cellular One customer service reps is to cut down on churn.

The emphasis on churn has not come about by accident. Cellular companies lose up to 4 percent of their customers each month, (( making it the industry's most persistent and prickly problem.

Churn also is an expensive problem. Counting commission fees and administrative costs, companies typically pay $500 to $600 to sign up each new customer. A quick turnover in the customer base can quickly strain the bottom line.

The churn problem has been exacerbated by the weak economy and strong sales of cheap phones costing less than $100, industry experts say. As recent figures indicate, people who buy cheap phones tend to be quick to sign up for service -- and quick to cancel when the cellular phone bills come rolling in.

Other factors also play into churn. Poor reception, dropped calls and transmission problems may exasperate customers so much that they cancel service.

Customer problems sometimes require some creative solutions, according to BAM's Mr. Klees.

During the Persian Gulf crisis, for example, a number of BAM customers put in cancellation requests. Most people requesting cancellations were committed to military duty abroad and didn't want to pay service fees while they were away.

The solution: BAM offered to freeze customer accounts and to hold open their telephone numbers until the customers were ready to reactivate service. To sweeten the deal, BAM waived the $50 activation fee.

Both BAM and Cellular One are trying to sniff out customer problems before they turn into full-fledged emergencies. Cellular One, for example, recently started sending out "welcome kits" to new customers. The kits explain basics, such as how to use a cellular phone, how to read a bill and whom to call for help.

BAM's version of the welcome kit is a "welcome call," made to every new customer. Service reps answer questions new customers may have, then follow up with another call several days later. Both companies give strokes to existing customers, too. BAM customers who complain about static or dropped calls -- signs of antenna problems -- are likely to receive a coupon for a free antenna adjustment. Bruce Rappoport, a member of the BAM retention unit, said he gives away about two of the $35 coupons a day to callers.

He said, "We'll even give them a new antenna if there is a problem."

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