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Apr. 15, 2008

For the third year in a row, Verizon Wireless topped the charts as being one of the best wireless carrier in terms of leadership, financial performance and innovation.

However, Verizon’s biggest accomplishment over the past twelve months may be in keeping its focus on customer service.

As Verizon President and CEO Lowell McAdam says "if you think you’ve fixed something, look back in six months because it’s probably broken again. In other words, build a better mouse trap."

Other numbers also do the talking. Technology Business Research figures Verizon Wireless’ lifetime revenue per subscriber was $4,273 as of the third quarter of 2007. AT&T’s lifetime value was calculated at $2,989 – a pretty dramatic difference, indicating Verizon customers are willing to stay a lot longer.

“I have to give Verizon a lot of kudos for hitting all of the numbers,” says Roger Entner, IAG Research analyst. “The stress is on consistency.” Current Analysis Bill Ho concurs: “It’s just a monster,” either stabilizing or improving each quarter.

Wireless industry analysts also point out that Verizon likes to set industry precedents by being the first to pro-rate early termination fees or publicly come out against a wireless phone number directory. For example, 2007’s move to no longer require contract extensions when customers change their calling plans merely reflects a confidence that customers aren’t so inclined to jump ship, they say.

Verizon’s so-called churn rate in the fourth quarter of 2007 was about 1.2 percent compared with AT&T’s churn rate of more than 1.7 percent.

Granted, Verizon Wireless is not the nation’s largest carrier. Last year, AT&T finished with 70.1 million subscribers, netting 2.7 million in the fourth quarter alone. By comparison, Verizon Wireless finished the year with about 65.7 million customers, attracting two million net customer additions in the industry’s ever-important fourth quarter.

McAdam added “we try to stay very attuned to the market, noting that he gets about 2,000 letters a month. Another factor is keeping an open mind. I think there’s a very good culture in Verizon in that we have a lot of open doors, and it’s easy to talk about ideas with executives like Verizon Communications Chairman and CEO Ivan Seidenberg."

As evidence of Verizon Communications’ support, Seidenberg was there for Verizon Wireless’ recent Open Development Device Conference, where the carrier outlined a major shift in strategy. The perception that Verizon Communications, co-parent of Verizon Wireless with Vodafone, is somehow holding back the wireless unit from displacing more wireline users is not accurate, McAdam says.

On the contrary, he says, if the parent company is going to lose wireline customers, it would rather see them go to Verizon Wireless than somewhere else.

Verizon Wireless’ first-mover advantage isn’t confined to the regulatory arena, however. Verizon was the first to promote unlimited $99.99 voice calling plans, and it announced data plans of 50 MB for $39.99 and 5 GB for $59.99 monthly access last year.

Rather than offer unlimited voice plans in select smaller markets as is the model more akin to Cricket/Leap Wireless International or Metro-PCS, the carrier offers a nationwide footprint, albeit at a higher price point. Analysts says it’s a good move to counteract cable companies and cheaper VoIP solutions and grab that section of the market that already might be paying $70 or $80 a month.

McAdam says there’s not any formal internal process when it comes to getting ahead of industry issues or breaking from the pack.

However, Verizon certainly tries to figure out what’s going on with customers by regularly getting their feedback.

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    This article was featured on Business 5.0.

Source: Verizon Wireless.