Nextel’s Focus on the “best customers” - enterprise
Forbes has an interesting article on Nextel and how it’s successfully penetrating the enterprise and government segments.
Many still think Nextel is the carrier of only “blue-collar” workers, but this article hits that one solidly: to start with, 10% of its customers are goverment, but Nextel’s CEO sees that going to 20% in 2004. Secondly, 90% of its 12.3M users are business customers, who pay $71 a month (versus $50).
Beyond this, Nextel enjoys only 1.4% churn, versus AT&T’s 3.3% (I don’t know that of other operators).
Nextel seems to be doing many things right for businesses, undoubtedly a result of their decision to cater to specific industry segments: self-service management portals, federated address books, a simple application distribution method, packet-based data billing, and its industry leading Push to Talk capability. Customer service, according to this article, is one major source of competitive advantage - a component of the mix that often gets overlooked. It was interesting to learn that Nextel delivers this by hiring customer service personnel from the industry segments they target. Smart.
April 12th, 2004 at 7:18 am
This is dead on. Much of the wireless industry, and particularly, much of the wireless data world is hopelessly enamored with gadgets, consumer entertainment, and expensive PDA phone combinations for executives. Nextel, in contrast focuses on the real needs of businesses with mobile workers:
- simple straightforward business application support,
- sensible pricing,
- decent developer support,
- inexpensive data-enabled handsets,
- billing plans that make sense for a business.
Because of this Nextel reaps the obvious rewards: high ARPU, low churn.
I long for the rest of the wireless carrier world to take seriously the opportunity of wireless data technology for businesses.