Comcast’s Xfinity Membership and the True Nature of Rewards Programs

Full Transcript

Don Kellogg 0m10s

Hello, and welcome to the two hundred and eightieth episode of the week with Roger, a conversation between analysts about all things telecom, media, and technology by Recon Analytics. I'm Don Kellogg, and with me as always is Roger Entner.

Roger Entner 0m22s

How are doing, Roger? Hey. I'm good.

Don Kellogg 0m24s

So, Roger, we had some news in the wireless space this week. Xfinity or Comcast has come out with a new loyalty program for Xfinity customers called Xfinity membership. Do you wanna tell us a little bit about it?

Roger Entner 0m38s

Sure. In a welcome sign of Comcast carrying more of its customers, They rolled out the loyalty plan. It comes in four tiers, silver, gold, platinum, diamond, and it's defined either in years or numbers of services. So silver is like zero to one year or one service, gold is one to five and two services, platinum is five to ten and three services, diamond is ten years and four services, and you get a golden watch. No, sorry, no golden watch for you, but you get an annual diamond member gift.

Roger Entner 1m19s

But the thing is, you can jump immediately to diamond by being a quad player, And so there are shortcuts. It gets richer over time where I think it's a little bit interesting that, you know, they're throwing in the unlimited mobile line included for one year as a loyalty thing when that's an acquisition thing. So I think here they were like, you know, and everybody gets that. So if everybody gets it, it's not really a loyalty necessary thing, but good if you think like that. And so they're throwing like interesting goodies in it.

Roger Entner 1m55s

Quite a few of them are ill defined or mystery, like what's the annual Diamond member gift. Could be great or not, you know?

Don Kellogg 2m4s

Well, they're also riffing off of T Mobile Tuesday, although they're missing some of the alliteration. They're doing rotating weekly treats every Thursday, so who knows? There might be free tacos in there.

Roger Entner 2m15s

Well, that would be great. And so I know we talked internally about it, but did I talk about, like, loyalty plan and it's a misnomer?

Don Kellogg 2m24s

I think we briefly talked about it a couple weeks ago, but maybe give us a short refresher.

Roger Entner 2m29s

Sure. So, you know, we've been doing a lot of research around that. And one of the striking things about loyalty plans is that they don't drive loyalty. But their acquisition plans, it's people coming in are using that as their tiebreaker or decision factor to pick the new carrier. When you look at it, customers are leaving you mostly for when things went wrong.

Roger Entner 2m58s

They are increasingly seething when you charge them more and more, but that usually doesn't break the camel's back. When there is a service outage, when there is a bill dispute, something triggers people. We know the triggers. Right? But people should sign up with us to know the triggers.

Roger Entner 3m18s

Right? So this one, where it is relatively vague on a lot of things, I'm not sure it will actually do the trick. We've been talking around it like what T Mobile does, where they throw the entire kitchen sink at people. I criticized it with you. Right?

Roger Entner 3m38s

And then I got educated, and I get it now, where it's you just pick a couple of things there, and it's so many things that it's something for everybody that will give them their jollies. This one doesn't really give me the jollies. Right? When I look like, oh, this is the loyalty plan, I get Wi Fi hotspot access, I'm like, really? Oh, I'm so excited.

Roger Entner 4m3s

You know?

Don Kellogg 4m3s

So there are a couple things here I think that are interesting that I think have quantifiable value, but I I agree that a lot of this is vague. Right? The Diamond member gift and the first access to new product experiences. Like, what is that?

Roger Entner 4m17s

Yeah. You're the Guinea pig now. Congratulations.

Don Kellogg 4m19s

Right? In the platinum level, which is, you know, five to ten years or three Xfinity Surfaces, you get a smartwatch, which is not terrible.

Roger Entner 4m27s

Well, depends on the smartwatch.

Don Kellogg 4m29s

Depends on the smartwatch, but I wouldn't expect them to be giving out four year old smartwatches. I would imagine something that's reasonably competitive. And then Peacock Premium, which is a decent streaming service that typically goes for about $11 a month. Yeah. It's their own streaming service, so they can price it however they want.

Don Kellogg 4m45s

There's no markup there or anything like that. But those, think, are are tangible values. But a lot of the other options may be less tangible. Right? Yeah.

Don Kellogg 4m54s

Things like Wi Fi hotspot access is good, and it's included with everything. And I think it has been included with everything already for them anyway. Right? So it's interesting that they're kind of trying to emulate some of the aspects of the T Mobile rewards stuff and not some of the aspects of, like, what Verizon does where they give you kind of options to buy discounted versions of all kinds of bundles and things like that.

Roger Entner 5m17s

Well, but Verizon also gives you some stuff for free in their loyalty program. Right?

Don Kellogg 5m24s

Absolutely. But I think, you know, like, getting a pretty significant discount on a streaming service, for example, like a Disney plus or something like that, I think has more kind of quantifiable value.

Roger Entner 5m35s

Yeah. But it feels like nickel and diming. On one hand, I get the value, but it feels like nickel and diming, especially compared to what T Mobile does. And that's one of the things. Verizon needs to simplify that program and that plan.

Roger Entner 5m50s

That's a key thing. I like what Verizon did there, but they made it too complicated, really good intent, complicated execution. I would have done it differently.

Don Kellogg 6m4s

I think it's like, hey. Here's all the things you can get in addition. Like, do you wanna get, you know, a discount on sort of streaming service x? I don't necessarily find that complicated, but, like, it's not as kind of straightforward as, hey. Here, come on board, and we'll give you this giant basket of things, and you may not even know all the different perks you have.

Don Kellogg 6m21s

Yeah. T Mobile's got travel and gas and streaming and, you know, by the way, you have MLB games and hockey stuff and, you know, all kinds of different things that you may or may not engage with, right?

Roger Entner 6m33s

Yeah, which is fine. There's only a certain percentage who are buying a certain amount of these things, right? And that's by design. You're by design not meant to take everything from the crap back, but there's more than enough to make you happy.

Don Kellogg 6m49s

Well, and the other thing that I think is tough with the cable guys is how much do they need a loyalty program or rewards program because they don't publicize churn.

Roger Entner 6m57s

Right?

Don Kellogg 6m58s

So we have some ideas from back of the envelope type work that we've done. And, you know, we we think it's higher than generally postpaid and and lower than prepaid. But will this move the needle or not is the open question. I think we both agree on that.

Roger Entner 7m11s

I think it's a very encouraging first step. I think they will iterate on it several times. It shows that Comcast is serious when it said like, we want to be more customer centric, right? These are the tangible results where this makes sense, and here's what we're doing about it. Are they going to be perfect for the first time?

Roger Entner 7m35s

I don't think that should necessarily be the standard. If their customers are happy and we're unhappy, it's still a win. Right? They don't have to make us happy. They have to make their customers happy, and we'll see if it makes them happier.

Don Kellogg 7m49s

Well, I think some of it is additive. Right? And

Roger Entner 7m51s

so I will be looking at the NPS figures. Right? Right. Right. Right.

Roger Entner 7m55s

We're testing them every week, and we can see if it makes a difference or not.

Don Kellogg 7m58s

Yeah. What what I didn't see or hear is, like, priority care for customers that have been around for a long time, which I think is one of the things that we see with all the cable companies is where they can make up some ground. We'll see. We'll definitely keep an eye on it.

Roger Entner 8m12s

What would be even better than better care is not causing care calls in the first place. I always view it like, you know, customer care is the cleanup crew. Cleanup crew to Aisle 11, you know?

Don Kellogg 8m26s

All right. We'll talk next week. Thanks, Roger.

Roger Entner 8m29s

Talk to you next week.