"Sneaky Marketing" 101
<< Must put tears in Jorma's eyes. >>
This one put tears in mine.
Is Jing Yang an alias for our respected friend XXXX (where the XXXX's stand for the name that shalt not be mentioned on this thread)?
Do you suppose AWS is incentivizing its employees this way in order to migrate subscribers from IS-136 to GSM and that is why GSM is the fastest growing wireless technology in the US?
>> Behind 7 Million CDMA Customers
Jing Yang
ChinaNex Forum
March, 2003
chinanex.com
When Unicom announced it would get 7 million CDMA customers in January 2002, the company was determined to create a miracle. While most people questioned its feasibility, Unicom was making its own calculation: use GSM to target low-end customers and CDMA mid- to high-end customers (defined as spending at 200 yuan or more a month). In other words, Unicom wants to lure the public with CDMA's advantage in technology.
But the situation in the first few months was disappointing and the company seemed to have run into big trouble. During the first five months, only 1 million customers signed up, which included 400,000 transferred from the defunct Great Wall CDMA network. For a while, the goal of 7 million customers was dubbed as "mission impossible."
Then the seeming impasse made a dramatic turn. By August 15, the number of customers reached 2 million, 3 million by September 25, 4 million on October 14, and 5 million in earlier November. By December 25 the number of CDMA customers had grown to 7.01 million. Another surprise to the market, this time a happy one. To a great extent, Unicom has employed special methods to create the miracle in marketing and sales.
Is it really true Unicom gained 7 million CDMA customers as it has claimed? If so, how did the company achieve the goal? With this question, we visited Beijing and Guangdong for clues.
A small business owner in Beijing said his decision to use CDMA was based on the incentives that Unicom promised free calling minutes plus a free handset. To many, free call is a big teaser as Unicom said in its advertisement, "Call as much as you please and leave the charge to Unicom."
The incentive policy began last March in major cities. In Guangzhou, for example, customers could send in a lump sum for a handset and 500 yuan ($60) deposit for calls to receive a handset. In exchange, customers must stay with CDMA for three years and make a minimum of 128 yuan ($15.4) of calls a month. The cost of handset will be used to prorate monthly bills for three years, and customers can keep the handset for free after the term ends.
It is not unusual to use incentives to stimulate demand, but is it really that these measures earned 7 million customers for Unicom? Interviews with Unicom employees have revealed some surprising discovery.
One employee told the reporter most part of the goal was contributed by "full workforce marketing," the method that converts every employee into marketer by engaging in "information dissemination, training and service." Unicom sent down a notice which called all employees to "maximize" personal skills to recruit customers; with it, there would be award for reaching the quota and penalty for failure. Apparently the policy worked. In Guangzhou, for example, more than 10,000 new customers were snatched by the local Unicom employees during a short period, nearly 20% of total new customers.
However, the problem with employee marketing soon surfaced. Sources say in order to make up the number, Unicom stretched the tactic to the extreme by forcing employees to earn bonus and not to be fined. In the meantime, the company had to lower the requirement for new customers by eliminating minimum deposit.
There are other problems such as delinquent monthly payment and calls made by phony numbers. Employees at Unicom Guangzhou said as much as 5 million yuan ($600,000) in payment could not be collected in time, or an average of 1.3 million yuan ($150,000) a month, that's a lot for a new service in one city.
What did Unicom do to cope with payment default? Guangzhou Unicom issued a new internal document stating that the operator will retain all withhold funds paid in advance for handsets and monthly plans. For customers recruited through Unicom employees, half of defaulted payment must be compensated by employees, and another half by his department. This was a big blow to employees because many of them only made recommendations and were not responsible for checking customer's records. What's more surprising, Unicom required employee compensation not be deducted from their salary, but in the form of monthly payment delivered to the service outlet. In other words, Unicom can retrieve bills overdue while cover delinquent account in the book. Employees say they are very unhappy about the policy, but the local operator has pressed on. Many suspect there is some kind of interest sharing between Guangdong and Unicom. Unicom "politely" declined interview on the news.
This may well be just one of many marketing tactics used by Unicom that we may never know for sure. One thing is clear, sneaky marketing may have won many customers for Unicom, they will also create unexpected headaches for the company. The question is: Will these tricks help Unicom pull in 13 million customers promised for this year once they are exposed? <<
- Eric - |
