Churn rate, the buzz phrase for how many customers Canadian wireless providers are losing, is something they all wish would go away.
Rogers, like most other wireless providers in North America, is losing customers. The churn rate of Canada’s largest wireless provider is now 1.73%. That’s better than rival Bell’s, whose rate is over 2%, but high enough that Rogers CEO Nadir Mohamed was forced to address the matter on Rogers Q3 conference call.
Recently, Rogers unveiled what they hope is at least a partial solution. In mid-December, the company partnered with Vancouver-based softphone innovator Counterpath (TSX:CCV). Rogers One Number uses Counterpath software to integrate a subscriber’s mobile number with with a desktop softphone that includes email and text messaging. Rogers has offered the service free to subscribers, and rolled out a national advertising campaign to promote it.
Another current national advertising campaign also addresses churn rate, this time from Rogers western rival, Telus. In 2011, Telus says its wireless subscriber churn rate was 1.68% in 2011, up from 1.57% in 2010. Part of the company’s solution is its Telus Learning Centres. The Learning Centres allow clients to book a one on one or group session to learn about specific devices or operating systems. When Telus rolled out the BlackBerry PlayBook in April of last year, it offered a free 45 minute session with a BlackBerry PlayBook “pro specialist.”
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Telus hopes its Learning Centres create a personalized customer service experience that will retain customers. Will it work? The company has to look no further than a few miles away from its own head offices to Burnaby-based Glentel. The Telus Learning Centres bear a striking resemblance to Glentel’s wildly successful model of providing hands on customer service at convenient locations, such as kiosks in malls and other high foot-traffic places.
Glentel opened its first Wireless Wave store in Burnaby’s Metrotown in 1997, and has since opened more than 130 more. Glentel’s Retail Canada division, which operates under the brands Wireless Wave, tBooth Wireless and Wave Son Fils, saw sales increase 13%, to over $100 million in Q3 2011 versus the $88.9 the company posted in the same period in 2010. The improved numbers have sent shares of the company rocketing from (adjusted for a stock split last year) lows of $3.50 in early 2009 to recent highs near $23 midway through this past February.
Glentel’s roots actually go all the way back to a New Westminster auto glass shop that was founded by the Skidmore family in 1946. In 1985, Glentel became the original service dealer to Rogers; a move that seems less unlikely when one recalls the mania and prestige that surrounded having an actual working phone in your car in those salad days of cellular. By 1989, the little glass shop was called TCG and it had just completed a purchase of a company called Glenayre Electronics, which it renamed Glentel.
Glentel’s foray into retail was characterized by a high level of customer service that would be familiar to patrons of Apple’s Genius Bars. Glentel, said CEO Tom Skidmore succeeded because it trained its staff “to stay away from industry jargon and speak in plain terms.” Skidmore, in talking to Cantech Letter’s Nick Waddell in early 2011, pointed out that its own Glentel University staff training program has twenty-six courses, and continuously updates its staff on the newer devices. If these things weren’t important, said Skidmore, companies could “just put smart phones and accessories on a wall, put it in the food court and sell it from a shelf.”
While Glentel, which sells carrier plans as well as devices, now occupies a powerful role between manufactures and consumers, the wireless giants have clearly discovered that life would be better without the middle man. In an age where online shopping growth is in the solid double-digits, the battle for physical space has tightened noticeably of late, after Bell acquired The Source stores, Telus purchased Black’s Photos, and Rogers made a deal to sell products in Shoppers Drug Mart.
In 2010, sensing its model had saturated the Canadian market, Glentel went south for the first time, buying a controlling stake in Diamond Wireless, a major third-party reseller of Verizon Wireless products in the U.S. Now, less than two years after entering the US market, Glentel’s footprint there is already half it its Canadian one, sales from its Retail U.S. Division topped $117 million in the nine For the nine months ended September 30, 2011.