Expert sees dangers in promo pricing trend

AT&T will sell new customers a triple-play bundle for $109. Comcast offers the same for $99. Verizon boosted FiOS sales earlier this year by giving away HDTV sets with each sale, but its new customer tallies fell in the second quarter when the promotion stopped.

All of these may be examples of what one global consultant sees as companies teaching customers to constantly seek cheaper services, rather than courting current customers with newer products that add value.

Andre Weber, partner at Simon-Kucher & Partners, warns that U.S. service providers, in particular, suffer from new customer acquisition syndrome.

“I personally think the U.S. broadband industry and U.S. mobile industry need some sort of mind-set change to get away from thinking that new customer acquisition will solve all your problems,” Weber said.

In the 1990s, price competition got out of control in the long-distance industry — and helped kill that segment entirely as brand loyalty evaporated. The same thing can happen in the wireless and broadband segments, Weber warned.

He believes service providers should develop a pricing portfolio that meets the wide-ranging needs of customers and restructure their sales processes — and incentives — to focus on upselling current customers with new features, as well as tailoring packages to calling patterns and habits.