Alltel continues to surprise. On the two-year anniversary of My Circle, Alltel introduced what amounts to the first loyalty program in wireless. If you remain on the My Circle program for two years you get to add another contact to your plan. Those who signed up for the plan two years ago get an 11th number to which they can make unlimited calls. Those who stick around for another 2 years, get a 12th, etc.
Those of you unfamiliar with My Circle probably know it better as T-Mobile’s myFave. Shortly after Alltel launched its circle of 10 plan in 2006, T-Mobile copied it, though cutting the number of contacts in half. The other carriers haven’t followed in T-Mobile and Alltel’s footprints, but the concept of unlimited has certainly become a key market driver. Some operators are offering unlimited calls within their own networks. All of them now have an unlimited domestic calling plan with no restrictions.
So what’s so new about Alltel’s promotion? Well, it’s a true loyalty program. There are other examples of operator programs that reward customers for staying customers. AT&T’s rollover is one. New phone subsidies at the end of a contract are industry standard. But they all have strings attached. Rollover is part of a service plan. Free phones require new contracts. Alltel isn’t requiring a new purchase or a new contract to add number 11 to My Circle. It’s just giving it away in gratitude for sticking with the operator.
“In a loyalty program, you want to get something of real value,” said Alltel chief marketing officer Frank O’Mara. “One-number unlimited calling is something of real value.”
Now it’s just a question of whether the other operators follow Alltel’s lead. Churn is still a big issue in the wireless industry–affecting some more than others. Maybe it’s time the industry takes a cue from the airlines and the credit card companies. Instead of locking customers into contracts, maybe making their services more valuable the longer they use them is the way to keep them.