ReveNews
If Vonage Would Only Listen!
Some of the most important determinants of success in e-commerce that most merchants overlook are customer retention and how to foster positive brand equity during the process of customer attrition. So I present the following as a case study of WHAT NOT TO DO:
1. On March 1st, 2004 I signed up for the Vonage VOIP phone service. Through May 1st, 2006, I was billed approximately $1,022.78 and referred two customers for a total credit of $75.00. On October 21st, 2004 I was billed $99.94 for a defective product. It was my understanding that the Vonage was going to replace the defective unit for free. Apparently that did not happen as scheduled and it is my fault for missing the charge, but I never should have been charged. MISTAKE: This builds negative brand equity.
MISTAKE: Failure to Identify high LTV customers: Vonage’s CRM should have identified me as an early adopter, loyal customer, and somebody who would be easy to retain.
2. Earlier this year, I spent what must have been at least 2 hours on the phone with technical support. The technical support team said my router was defective and that it would cost me about $100 for a brand new one. I informed the TSR that I would cancel the service and get a free router from another provider if they did not subsidize or provide a free router.
MISTAKE: Vonage failed to determine the cost to retain me versus cost to acquire a new customer: It is my understanding that a Linksys router costs approximately $50 (probably less) + shipping. The average cost to acquire a new customer in the VOIP space is $100-$125. All they had to do was provide a new box and I would’ve remained a loyal Vonage customer. As it turns out, when I switched to another provider and randomly tried my Vonage router again it ACTUALLY worked - so the technical support was 100% wrong.
3. On 4/4/2006 I requested a port from another VOIP provider. On 5/5/2006, Vonage should have received a request to port my number to another provider. It is my understanding that once a port request is made it is hard to be cancelled, but Vonage probably could have called me and asked me to cancel or somehow reverse the port request.
MISTAKE: Failure to identify the defection of a loyal customer, a customer who clearly stated his intention to cancel the service if another router was not provided free of charge, and now had a request to port his number to another carrier should have been flagged for some type of attention - email, phone call, smoke signals? They had TWO WEEKS minimum to contact me, but never did.
4. On 5/16/2006, I received confirmation that the number was ported and would be completed on 5/25/2006. On 5/25/2006, I went to Vonage’s website, went through the contact us section, selected ‘Service Cancellation’, and ‘I would like to cancel my account’. While annoying, I could understand a merchant wanting to get me on the phone to find out why I was trying to cancel. At 11:38:44 AM EST I spent the next 20 minutes and 49 seconds on a call with customer service explaining why I wanted to cancel.
MISTAKE: When I asked if my account was cancelled, the CSR instructed me to call ANOTHER number to cancel. The CSR didn’t even try to ask me what it would take to prevent me from canceling the service. Typically this type of process is implemented to get the consumer so frustrated that they will just give up.
5. BIG MISTAKE: After that I was instructed to call ANOTHER toll free number where I was greeted with a message that indicated I would be required to hold for a MINIMUM of 15-20 minutes. Ultimately, I spent 20 minutes on hold and 29 minutes and 31 seconds total trying to finally cancel this account. At this point I was so alienated with the process I had to go through I do not even recall whether the CSR would ask what it would take for me to remain a customer, but it would not have been good enough after that experience. The CSR may have, but at this point I was so angry short of giving me phone service forever I was leaving.
While this is not intended to be a comprehensive discussion on CRM, there are a few really basic CRM lessons that can be taken away from this experience:
1. Identify High Value, Loyal Customers: These customers should be the easiest to retain. There does not appear to be a system in place within Vonage to do this adequately or you wouldn’t be reading this blog.
2. Communicate with High Value, Loyal Customers: I would have been a great prospect to add another line, expand services, or even a candidate for a survey on how to improve services. If they did offer a survey, there was no incentive for me to respond to it. They could’ve done this with a simple promo saying, “Win 3 free months of VOIP service, please fill out a short survey and we will select X winners at random for 3 months of free service.”
3. Financial Analysis of Acquire vs. Retain: Clearly there was no mechanism for Vonage to meet my simple needs - I didn’t want to buy a new router because after their Tech Support improperly diagnosed the problem. The VOIP space is rapidly becoming a commodity - service rates are falling and acquisition costs are increasing. It would have been cheaper for Vonage to retain me than to acquire a customer to replace me.
4. Identify ‘At-Risk’ Customers: If a customer who has one phone line with your service requests a port and that doesn’t raise a RED flag within your CRM system there is a problem. In addition to that, because I was testing another service provider, Vonage could have seen absolutely ZERO outbound calls from my VOIP number.
5. Cancellation Process: If a consumer is about to cancel a service, it is not unreasonable to try and get them on the phone. Once on the phone, the CSR should have a series of retention options that can be offered based on the value of that customer. Alternatively, an exit survey for feedback could be used to identify what it would take to retain the customer.
6. Two-Tier Cancellation: I was infuriated by the fact that when I called the second number that I was immediately greeted with a 15-20 minute wait time. At that point I was so livid that I would NEVER, EVER use Vonage again and would actually encourage customers to explore other options. This is a great recipe for building negative brand equity. The only experience that I could consider worse would be trying to cancel AOL several years back.
These basic concepts can be applied to almost any service oriented business including affiliate management. I know a lot of incredibly talented affiliates in competitive spaces that are currently not receiving the attention they need. I have to re-check my numbers as they are cursory estimates from memory, but with regard to Vonage, it is my understanding that they lose 2-3% of their customers per month or 24-36% per year. At a 30% attrition rate, the cost to acquire a customer that is actually retained jumps by 30% or so. In the VOIP space, customer acquisition costs are increasing, margins are decreasing, highly capitalized cable providers are entering the space and the stock tanked about 20-25% from the IPO price. Until Vonage is actively able to implement a CRM program to identify high value current customers, identify at-risk customers prior to cancellation, and change the cancellation process from one that is an endurance test to one that works with the customer to identify economic incentives to retain the customer in a manner that is cheaper than acquiring a new one I think Vonage has more risk than reward.
I have a busy schedule. They say one more person who is happy tells 25 people about a positive customer experience who in turn tell an additional 25 people. It works the same in reverse. They also says that for every 1 customer complaints, that you never hear from the other 100 - you just start builidng negative brand equity and eventually lose more customers. So if I took the time to write this . . . how many other angry Vonage customers are there?
Vonage may be listening, but I am not sure of the quality of the message is coming through loud and clear.
nightmare.
Out of curiosity, what did you switch to, and is it better?
Scott,
My .02
I switched on price, but I really don’t use it much and quality is not better than land line. (I do like retrieving voice mail online since I am on the go alot.)
Usually it is Skype and Cellphone for me and those serve quite well.
Although I don’t think the cell phone really “Frees me”…more like a mobile anchor sometimes.
-wayne
I switched to voip.com. Right now they are in beta mode, but generally offer more functionality than Vonage. They have other more complex features that I find interesting such as anonymous call rejection, selective call acceptance or rejection, and click to call where you can enter a number in your computer, it rings your phone, and then it rings the party you wanted to call.
How is the call clarity with voip.com? Do they offer you everything you wanted? We’re thinking of switching and they look like a pretty good deal.
I use Vonage in the UK and have a Canadian virtual number, too, because I do a lot of business on both sides of the pond. Recently, Vonage ran an advertisement in a national newspaper that promoted the fact that new customers can phone between the UK and Canada for free (not just Vonage to Vonage calls).
In other words, my loyal service is subsidising special offers to new customers. I called Vonage’s customer service to ask if it was possible for me to get the same deal as I am a customer of several months’ standing. I was advised that the only way to do this would be for me to cancel my account, then sign up for a new one. This is a non-starter because it would mean losing both my Canadian and British phone numbers, as well as paying another connection fee. An email to the head of UK operations illicited similar advice.
Vonage is willing to risk me closing my account and not subscribing again, rather than offer me a comparable deal that rewards me for sticking with the company in an increasingly competitive market. Instead of creating all of this friction and ill-feeling, how hard would it be for Vonage to ensure an existing customer remains satisfied with its service?
I am very happy with Vonage.
As a customer?? No way! As a SHORT SELLER!!
This company tries to avoid cancellations by giving people the runaround. But I got news for them - if their service is crap, ultimately the customer is twice as motivated to get rid of it, and will tell many others not to do business with them.
And the happy people - those who are short the stock. It is great to see every day this Piece of Shit company heading deeper into the toilet.
Jabbering with Jabra: What happens when CRM goes right?
Like most Internet savvy individuals with an obsessively compulsive need to be connected 24/7 I use a wireless headset. I recently purchased the Jabra JX10 bluetooth headset. It consists of a ‘polycarbonate’ (’plastic’) ear hooks that firmly hold the h…
Here’s my Vonage horror story.
I opened an account with Vonage on Feb 22, 2005 authorizing them to make a monthly charge to my AmEx card (BIG MISTAKE … NEVER DO THIS). They said they’d “port” my two Comcast phone numbers over to Vonage within 30 days. They never ported the numbers.
July 3, four months later, I was sick of waiting and felt that I’d given them much more time than needed. I called them and told them to cancel the account (they had been charging the AmEx card $54 every month and in the meantime I also had to maintain my Comcast phone service account in order to continue to receive incoming calls … since my Comcast numbers hadn’t been ported to Vonage, in order to get incoming calls I’d have had to have told everyone I know to call me on the numbers Vonage had “temporarily” assigned to me. So I was paying for TWO phone companies and I just got sick and tired of waiting).
The Vonage CSR who answered my cancellation call refused to cancel the account (!!) and said I had to talk to a special “Account Manager” over the phone (a written communication would not be sufficient!!) because the person I was talking to said he wasn’t “authorized” to cancel an account and no Account Manager was currently available to talk to me! UNF***ING BELIEVEABLE!!
July 8, I called again and tried to speak to an Account Manager. The guy I spoke to, “Victor,” again told me that there was no account manager available! I was upset, but calm, and told him that I would stay on the line till one became available. He said “Sure, no problem.” I was on hold for appx. 40 minutes and every few minutes Victor came on the line and told me he was “working on it”.
I asked Victor why Vonage had never ported my Comcast numbers over to Vonage. He said that “the carrier Vonage uses to port numbers” had simply never done it. Finally, Victor told me that they’d have an Account Manager call me … I didn’t believe, however, that I would ever get any call.
Right after I hung up I happened to check my email. There I found a computer generated email from a “Vonage Account Manager” saying what a pity it was that I wasn’t home when they had tried to reach me by phone!!! And get this … the email time stamp said they had tried to call me during the time I was actually on the phone with Victor!! I have call waiting so I know they did not tried to call me.
On the following Monday I finally actually got through to an Account Manager, Irene M. …! I told her I wanted to cancel the account and that I wanted my money back because they had never delivered the service they had promised, i.e., to port my numbers over so that I could cancel my Comcast account. Irene would have none of it and instead for around 15 minutes kept trying to convince me that I should not cancel the account.
Of course, being fed up with the very poor customer service along with their initial refusal to cancel the account, I stuck to my guns and insisted that I wanted the account canceled.
Finally, Irene said okay she would cancel the account and then added that there was going to be a $41.00 cancellation fee!! Oh brother … ! I felt the heat rise. I told her they had breached their agreement to port my numbers within 30 days and that they had no right to charge me after they had failed to provide a promised service. Of course, she also refused to refund the amounts they had already charged me. I was LIVID!
So I told her that I was revoking any authorization for any more charges to my AmEx card and that I was going to dispute them with AmEx. She said “Fine..” and then finally said she would go ahead and cancel the account. All of Irene’s comments were made with the most hostile of attitudes and the manner in which she said she’d go ahead and cancel the account made me believe that she would never actually do it. This happened on July 11.
Of course, I called AmEx and started a dispute process over the past Vonage charges. I also told them not to allow any future charges from Vonage. They said, “Oh, so sorry but we can’t do that … you have to work it out directly with the merchant.” This is why I now ABSOLUTELY NEVER let anyone make periodic charges to a credit card of mine… because if they don’t voluntarily stop the charges the credit card company won’t do anything at all to block future charges. Remember that.
On July 21, I got an email from Vonage informing me that they had “successfully charged” my AmEx card as of July 22 for another $54 and had successfully ported my number to Vonage !! I immediately called Vonage. This time “Vincent” came on the line and proceeded to check my account. “No, your account is still in full force …” he says. Then, “Oh … here’s a note here that someone said to cancel the account on July 13, but for some reason it wasn’t done. Hmmm….” I said, “How am I supposed to cancel the account?!?! Then he says, “Gee, I’m sorry … you’ll have to call back during business hours and talk to an Account Manager….”
Bottom line is that they finally ended up telling me that I had never signed the autorization to port both of my numbers - voice and fax lines - over to Vonage. Actually, I did sign an authorization to port the numbers thinking that the single authorization covered both numbers. But it seems that a separate authorization has to be signed for each number. But no one from Vonage ever called me to say that they had received the first authorization and needed a second authorization for the other number!!! What bozos!
It finallly got to the point where every month I called AmEx to dispute the Vonage charges that were made for the 5 months during which they failed to port my numbers. AmEx dutifully charged the Vonage charges back to them. But WHAT A HASSLE!! And believe it or not Vonage actually had the balls to write six or seven pages of crap to AmEx to tell them why there shouldn’t have been a charge back to them !!! UNBELIEVEABLE !!! I truly HATE Vonage.
I make it a point to tell everyone I speak with about this horror story. It took around two and a half months to finally get rid of these leeches and cancel the account. And to be perfectly honest, for the one or two calls I made using Vonage the quality was quite poor… another reason I decided I wanted to cancel.
STAY AWAY FROM VONAGE !! If you don’t have high blood pressure you’ll get it. And if you do have high blood pressure they’ll make you dead!! STAY AWAY FROM VONAGE … unless you’re a complete masochist.
DID IT HAPPEN TO YOU???
I am a vonage customer.
Recently someone somehow hucked into my line and made phone calls to the Philippines.
vonage charged me almost $900 and refuses to credit my account. In fact they don’t believe I did not make those phone calls.
I have tried talking with them, talking with the SV. wrote a letter and got Zero response
I just wrote another letter with the hope Someone reasonable will view the bills and credit my account.
Their customer service is terrible.
vonage rally bad they betrayes people they charge people uncessarly they will say we can call to london after making calls they will bill us vonage is bad dont take vonage its really bad
I canceled my service because it was of very bad quality. I had just paid for the next billing cycle and the company canceled my service that day instead of letting me finish out my cycle. I told them to refund my payment and they refused.