davesabine.com

This page contains an open letter that I invite the CEO of Telus (specifically the "Mobility" branch) to read. This generous advice and honest criticism might save their self-proclaimed status as "Canada's top wireless phone company" and, if they apply these criticism to their future policies, might produce several billion dollars in increased sales.

So...go ahead...read it.

To whom it may concern at Telus Mobility:

Why Should You Read This?

• ...because it should take less than an hour of your time and this discussion might be the most important response you have ever received from an outsider's perspective. Clearly, any money you've spent on market reports, studies, audits, whitepapers, and product roadmaps to overpaid consultants has been a wasted expense. I give you the following advice for free...

• ...because while Telus Mobility has seen an impressive growth in stock price over five years, Rogers Communications has grown more and Virgin Mobile is a new and daunting competitor. I should think that this concerns you.

• ...because I represent a massive portion of your potential consumers:

  • mid-30's Caucasian male
  • young family
  • new business entrepreneur
  • technically savvy

  I presume that folks like myself represent the majority of your target audience. Save perhaps for the teenage population, but I'd presume that folks like myself ultimately pay-for and are in charge of those teenage consumers (and you're losing those customers already to the much sexier Virgin Mobile).

• ...because I am not your customer. I would have liked to become your customer. However, after very careful consideration I doubt that I will become your customer. I have poured a disturbing twenty (20) hours pondering your various services, products, and rate-plans and still don't understand any of it better than I did three days ago and frankly you've already wasted enough of my time -- I will now search for a simpler provider instead.

What Do Your Customers Want?

I'm convinced that you have no idea what your customers want. So let me inform you of the basics and provide some suggestions as to how you can provide solutions:

We want to have and use a cellular phone. (That's obvious...I suppose that even you knew that.) But more...we want to use the phone that we saw online, or strapped to somebody else's belt, or on television, or the phone that we purchased last year from somebody else, or a phone we received as a gift, or a phone with a camera, or MP3-player, or with a funky paint-job, or _______________.

Your most successful position on this issue should be:

• Provide all options.

  I realize this would be very difficult but your current product line is simply insufficient -- for example, you missed out on this one and this one.

We want to feel that we haven't lost our shirt in the investment.

We know of course that we will lose our shirt. We know that our multi-hundred-dollar device will be as good as paper-weight in 18 months. Everybody buying a cellular phone already knows this.

Want we really do not want is to have a sales-person or "Client Care" representative try to convince us that we're getting a "good deal". You need not patronize us or try to make us look the other way while selling us obsolete and overpriced techno-junk. No matter what price-tag you create and embed in your "3 yr contract", we know that we're getting the shaft. So don't kid yourself, or us!

And there's simply no reason at all to wrangle your customers into a "3 yr contract" -- unless of course you believe that's the only way to shuffle a $500 phone into our pocket (as though we aren't smart enough to understand the real cost of the phone). THREE YEARS!? Don't think for a moment that your customers don't see what you're doing -- your slight-of-hand. And those customers who become irate with your toll-free "Client Care" representatives when they're told that they'll have to cash in their gold teeth to abort their contract in mid-term have every right and reason do to so. (I hope that you record those conversations "for quality control purposes" of course.)

Your most successful position on this issue should be:

• Do not hide any fees. And do not expect a contract.

  You can achieve this by selling the phone device separately for its full price. We'll pay for a phone if we can purchase "the" phone that we want. Those who want simple, will buy simple. Those who want the mother of all PDAs will buy it -- and they don't need to be tricked into thinking that they might get it free if they sign-up for three years and promise Telus that their first-born child will have a "Super Talk 50" plan.

We want to make and receive phone calls (of course).

That's a simple request really. But Telus has made it extremely complicated.

Imagine for a moment that you've purchased a vehicle and now you want to drive it...but your license issuer explains the following:

• Some cars can drive on paved roads.
• Others can drive on gravel.
• Some cars can drive on both, but only within city limits.
• Outside city limits, the car may only work on gravel ( unless of course you travel to a neighbouring province and then you can expect the car to drive on gravel and pavement but limited to only 50 km/hour [ unless you've paid in advance for the "Drive Canada 50" rate-plan in which case you can drive the first 50 kilometres at full-speed but every kilometre thereafter will cost you three (3) times the original rate. ] OR [ you might have the "Drive Canada 100" rate-plan and the "SPARK" add-on which would enable you to drive and listen to the radio { but only while on paved roads } ] < -- If you weren't smart enough to sign up to the "Drive Canada" plan, then read the Important note on rate plan changes article. -- >
• If you'll drive your car for 30 minutes daily (on paved roads) then you'd be better off with the "Drive 30" license. You can drive more of course, but you'll pay $1.10 for gasoline up to the first 30 minutes, then $19.00 for every 8 minutes thereafter.
• Of course, you might want to drive with your lights on and sometimes on gravel so... ( you should buy an extra battery ) And ( a charger ) And ( if you'll drive more on gravel than pavement [ then you should have purchased the "SPARK 4" (with "pavement or gravel driving" features and "the mud-flap add-on") ] But you didn't, so... [ you'll have to contact our "Driver Care" representative and just tell them to add the feature to your car ] )

I hope I've made my point clear. Imagine how absolutely ludicrous it would be if, when we purchase a car, we are expected to know what kind of roads we'll drive on, where, and how frequently. Imagine how absolutely ludicrous it would be if the price of your license and insurance were variable based on what you believe to be your future driving habits.

The problem with this paradigm that you've created with your rate-plans is:

• Person "A" and Person "B" may utilize their phones in exactly the same way for exactly the same amount of time in a one-month period, yet their phone bills might be entirely different based on which rate-plans they chose when you locked them each into their "3 yr contract".

I'm sure you don't perceive this as a problem, instead you clearly understand that you made more profit from one of those customers. We understand that too!

Your most successful position on this issue should be:

• All services on! and One rate (for everybody, everywhere, every month, all-the-time).

  If you cannot manage that, then at the very least the price of your service should be based on our "past usage" and not our guesses and estimates about our "future" usage. Surely, you have the technology and skill to study a customer's usage through a month and automatically apply the most effective and cost-saving rate-plan to that month's bill. Open up all the services and let the customer just use their phone -- do whatever they'll do then tally up the data and charge them according to the lowest possible rate-plan and add-on(s) for their usage that month. Call it the "Always Lowest"-rate-plan and then send me $1.02 from every new subscriber to repay me for that gold-nugget advice. Your customer-base will grow rapidly because this policy is simple, to the point, and they'll trust you.

We want to have access to some of the "luxury" features from time-to-time. We know that the phones are capable of such things -- perhaps we'll make use of them some days.

What we don't want (in regards to this matter) is to have to decide and know which services we'll use and how often prior to buying the phone. Let me reiterate the solution from above: All services on! and One rate (for everybody, everywhere, every month, all-the-time).

We want to know at the onset how much we will spend per month for wireless phone service. We do not want any mystery about this cost. We want to be able to predict and create a budget for this expense.

I suspect that your well-paid analysts know that every subscriber to your service is liable to pay you approximately $100 per month per phone regardless of which rate-plan or term-contract they've chosen.

I know this...why don't you?

If this assumption is near the mark, then you'd be better off to just tell us, "$100 per month", and don't bother with the endless menu of rate-plans. But perhaps there's room for two rate-plans: "$100 per month" or "Prepaid" (for those who truly try to limit their cell-phone usage to emergencies only). It could be that simple.

Have you, yes I mean you, ever visited your retailers as an anonymous consumer and asked them to help you determine the best rate-plan for your needs? They cannot do it -- they don't understand the rate-plans any better than the consumer does. I'd suggest that is a major problem in your marketing strategy.

I suspect that if you ask EVERY ONE OF YOUR CUSTOMERS (personal and/or business clients), their response to the points above would be:

"Yes, I agree"

or

"Yes, that's exactly what I want too"

How Much Does Your Service Really Cost?

And now I'll describe some questions that I am faced with as a potential consumer of your services:

• Which phone should I get?
• Hmm...which one comes free with a rate-plan?
• Nope, not that one...I want other features...
• Ah...this phone looks good but there are four different prices for this device depending on which rate-plan I choose
• and there's a lot fine print at the bottom of this page
• Oh, Telus wants me sign a 36 month contract to get the phone at the advertised price!
• Not to mention that the rate-plan must also have web, email, data, talk, "Spark" (whatever the heck that is?!) and bunch of other enhancements to receive that low-low price.
• So, how much am I willing to lose?
• I wonder how many calls I'll make? How long will those calls be?
• Will I have to make more long distance calls in the future? Or less?
• Does Caller ID really work -- or does it work only with cell-phones on the same network?
• How much voice mail will I receive? I wonder if I can predict who will call me and how often (and whether I'll be able to answer their calls or if I'll be in a meeting when they call -- seven months from now, and 4:03 p.m.)? Do I need voice mail?
• How well does this-or-that device work on the internet?
• If it works well, will I use it more than I do now? or less?
• If it doesn't work well, then will I regret paying for that extra service? (Yep)
• Why do I have to pay for that extra service? Do I pay per minute?
• Oh...per megabyte!
• What if a software upgrade is made available? Will Telus provide the upgrade or will it cost extra?
• Gee, they seem to charge a fee for just about everything. I wonder If I'll pay per minute that the device is synchronizing to my desktop computer?
• Or is that charged per megabyte also?
• How much does it cost to receive a word as a text message? Does it cost as much as minute? Or more?
• What about TWO WORDS?
• Should I call somebody instead of text-messaging them?
• Should I write long sentences to get the most out of my per-text-message-fee?
• How many "free" messages have a pre-paid for? How many have I used up so far this month? (Why should have to keep track?!)
• I saw a great PDA online that has all the features I want.
• ...but Telus doesn't carry that model. Apparently it's compatible with their network, but they don't support that device.
• Which features am I willing to compromise then?
• Hmm, the PDA's that Telus carries are expensive and none of them have all the features that I want (not like that other device I saw and would be willing to pay a little extra for, but Telus doesn't carry it)
• So which "combination" of devices am I willing to carry with me in my pocket? Such-n-such Telus PDA, and a camera? Or, the-other-such-n-such Telus phone, and I could continue to use my older PDA? Well, with this-or-that accessory and those add-ons, maybe the phone will function like an MP3 player? Well, it will but it doesn't have a camera...and the phone with a camera doesn't have an MP3 player?!
• It looks like I'm stuck carrying 9 different techno-devices in my pockets (all because Telus doesn't carry that ONE device which does it all!)
• Hmm...I know that this PDA which Telus carries also supports WiFi, but does Telus allow WiFi or do they disable it? Yep! It's disabled! (Except of course, the device can connect to Telus-specific Hotspots for an extra fee.) No doubt that's because they want me to PAY to access the internet despite the device's WiFi capability -- and that greed is SOOOOO transparent.
• I *think* I'll use the phone N minutes per month (during the day) plus Y minutes (during evenings) and Z minutes in long-distance calls (within Canada) plus P minutes long-distance calls (to the United States)
• those estimates of course are pulled entirely from my imagination because I really have no idea how much I'll use the phone.
• So...

  N + Y + Z + P = .... ...no that's not quite right...maybe the formula is: [N*0.25 + Y*0.25 + Z*0.30 + P*(0.30*2)] ...er, wait a minute -- I forgot to account for their current promotion...so, [(N*0.25)*0.95 + (Y*0.25)/2 + Z*.... ...(getting nowhere with the math)... ...hmmm, I wonder which rate plan will save me the most money?

• But, I'm liable to make more phone calls in December...
• So, should I change the plan in November to anticipate more phone calls...
• or will I save more by signing up to the more robust rate-plan initially?
• Is there a hidden fee to change the rate-plan in mid-contract?
• But what if I don't use all the "unlimited" or "free" minutes (I already know that their not really "free" because I'm paying for them!) Will Telus credit the next month with "unused" minutes?
• (Probably not, because they're greedy and I know that because that's the only way to explain why they make their rate-plans so confusing!)
• So...hmm...maybe I'll call their "Client Care" support desk and they'll help me understand which rate-plan will work best for me.

  Dialling: 1-866-etc. etc... push 1...then 4...then 3... on hold... wait...still on hold... wait...still on hold... wait...still on hold... Oh...was that a person's voice?! Nope...just a recording... wait...still on hold... Oh, it's ringing!! (Disconnected) Dialling: 1-866-etc. etc... push 1...then 4...then 3... on hold... wait...still on hold... wait...still on hold... wait...still on hold... Oh, it's ringing!! "Hello"...(finally a person) (talk for a while and learn that the Telus representative that I'm talking to doesn't understand the rate-plans either!) ...then back to square 1.

If you have skimmed through this letter so far...you shouldn't have. Above are just a small sampling of the problems that face your customers. It would be prudent for you to understand their dilemma and why you're losing clients to Virgin Mobile and others.

Next Problem: "Restrictive Services" and "Limited Flexibility" (Despite all efforts to appear flexible)

This can be explained on two fronts:

1. Due to the nature of your rate-plans, you must understand that the vast majority of your customers approach their new phone contract with hesitation. Your rate-plans are so numerous and so confusing that their only option is to choose frugality: "maybe I'll just start with a cheap/basic plan and if I start using my phone more, then I'll upgrade to a different plan". I suspect this accounts for 90% or more of new subscribers to your service. They arrived at your doorstep because you claim to be "Canada's top wireless phone company" and perhaps they're excited by the possibility that they can make use of the great new features of the modern phones; but in the end they choose to be frugal because understanding the true cost of using the enhanced services and extra features is impossible. And that is restrictive. Telus rate-plans aren't flexible, they are defeating!

   I doubt that your services are cost-prohibitive to many of your subscribers (even the ones who've started with the "Super Talk 20" plan -- one of your cheapest)-- perhaps more people would use (and pay) for those extra services if it were possible to understand how much they actually cost.

   The cost structure (not necessarily "the cost") restricts people from utilizing your services.

2. There are thousands of devices available in the marketplace and gone are the days when consumers couldn't purchase phones anywhere except their local telecomm provider.

   People are aware of mobile devices and aware that they can be purchased (without "3 yr contracts") and used on a variety of networks in conjunction with a variety of service providers.

   However, despite all flexibility and options that people see:

   • Telus appears to have a fixed list of devices available to their customers
   • And even on those devices, they often don't operate as advertised by the manufacturer but are limited to Telus-approved features. For example, this device has built-in WiFi, but it only works if the customer pays Telus extra. Don't forget though that the customer may have already subscribed to an "Email & Web" plan. So, the customer pays twice!

Next On the Chopping Block: "Consumer Confidence"

32,910,032 Different Rate Plans to Choose From! (Offer only good until September 4)

I doubt that you have actually visited your own website (if you have, then you would have resolved this problem long ago)...so let me point out a serious problem for you.

Visit this Page

33 rate plans

4 links to more rate plans

1 link to view bundles (more rate plans)

Now Visit this Page

16 rate plans

one link to view bundles (more rate plans)

And this Page

6 more rate plans

And this Page

22 rate plans

Yet Another Page

3 more rate plans

Yet Another Page

29 Add-ons

I was going to build a little chart to demonstrate the variety of combinations that are possible...but I can't. The best I can tell is that there are eighty (80)...as in EIGHTY different rate plans. Couple that with the fact that not one of them provides all the features that you offer which forces your customer through a process of mix-matching the plans and add-ons.

It is not possible for your consumer to feel "confident" that they've made the right decision when you force them to sift through thousands of possibilities (I'm not exaggerating). In the end, every one of your customers settles on a rate plan that they think may serve their needs but they know that they've paid too much or too little (in which case they know you'll charge them more than the going rate for services they didn't pre-pay for in their rate plan).

Inflated and Nonsensical Costs

In your "Talk Anywhere 250" rate plan, the "additional local minutes rate" is $0.15/minute. But with your "Talk 150" plan, the "additional local minutes rate" is $0.10. Can you explain to your consumer why?

No...you can't. There's no explanation that your consumer will understand or care about. Instead, the consumer only understands that their options include:

• Pay more than they should for their service.
• Or pay less (up-front) and then more than they should for their service.

Your consumer can see clearly that you just want their money -- and lots of it. The only reason you have any customers at all is that, until recently, there hasn't been many viable alternative service providers. But that is changing and I suspect (and hope) that your current cost-structure will need serious overhaul to be competitive. That doesn't mean you should offer "more rate plans" to choose from...it means that you should be as clear and simple as possible.

Market/Service Discrepancies

With my regional telecomm provider, I can have a land-line phone in my home for $24.99 per month. I can also have an always-on internet connection and cable HDTV for $35.95 per month. So, with those services I can:

Total Monthly Cost: $~61.00
Surf the Web	Talk on Phone
Watch TV	Listen to Radio
Check Email	Connect to the Office
Enjoy enhanced phone services like Caller ID, Voice Mail, everything else.
All the things we've come to expect from those techno-devices.

The most important thing is that those services are always that price -- every month -- no variation. If I want to do those things with my cellular phone, it may cost $100 this month, $220 next month, $60 the following month. That's ludicrous!

What your consumer wants in this regard is:

• To enjoy the ability to use their cellular phone in a flexible manner. We know that the technology provides the ability to perform all the above tasks via "mobile-devices". But the discrepancy in our cellular phone bills and our other related services is an immense problem for your industry.
• And...I think most people would accept that it may cost slightly more to enjoy the above list of conveniences on a mobile device in their pocket (or car, or office)...we'd be willing to spend a few extra dollars per month (compared to the "land-line" versions listed above) but when we begin to pay more for our cellular phones than we do on groceries then you have a severe problem to deal with. The problem I'm referring to is called "customer dissatisfaction".

A Little History Lesson

• In 1979, a person could purchase a cassette tape (their favourite music) for approximately $12.00.
• In 1980, the music industry produced a new format called the CD and consumers knew that it cost less (approximately $1.10) for the production of a compact disc than for the production of a cassette tape (approximately $3.00).
• But the industry decided to sell compact discs at twice the price of the cassette tapes. I paid $23 for my first CD -- I could have purchased the same music on cassette tape for $12 -- or I could illegally record it for $0.00.
• ...fast forward a decade or so...
• Napster and other point-to-point file sharing applications become the single largest and most popular method to distribute music -- all for free. The industry experienced no revenue from the file-sharing activity.
• And now, iTunes is the most important market force in the sale and distribution of new music. The revenue streams for the actual record producers are minimal -- credit-card companies and the iTunes retailer receive the largest portion of the revenue while the record companies are left with fractions of pennies.

Why did this happen? It's simple...because everybody knew in 1980 that the record companies were just being greedy.

Be careful that this doesn't happen to you. (Here's some bad news: It's already happening...) Your customers will leave you for another at the drop of a hat when the next new player enters the competition (a-ha! good thing you locked them into a "3 yr contract" eh!? You'll have to start giving away new phones at the end their term just to keep them around -- oh...you already do but I doubt that it's working like you hoped it would).

Other Problems

I'm sure I'll write more...but frankly I'm tired of this for now. The bottom line is simply this, (then I'll stop writing for the day): I wanted to be your customer because clearly you offer the services that I need and I believed you when you advertised "cool phones, great coverage and competitive rates"...but I'm now searching elsewhere because the hurdle is simply too high. If this letter has been a waste of your time... good! ...you've wasted my time too.