Major US wireless carrier T-Mobile took another step forward in its quest to be more customer-centric in early June 2016 by giving away a T-Mobile Share (TMUS) to every single one of its customers. More accurately, every single T-Mobile subscriber line earns a share through T-Mobile’s “Stock Up” marketing program, promoted with a flashy “Stock Up” campaign on social media.
T-Mobile will also offer its customers a share for every new customer that they refer to the carrier. So, for every new T-Mobile subscriber that joins as a result of a customer referral, T-Mobile will grant the advocate one share in the company, with the ability for subscribers to earn up to 100 shares a year. The company is apparently paying face value for the share that it is distributing to its new shareholders, and the company estimated there would initially be around 1 million shares issued through the program. And those shares might be worth something. T-Mobile’s stock price has had a good run over the past few years, and some analysts believe they are considered ripe for acquisition by their competitors. Unlike industry giant Verizon, their stock has grown almost 150% in the last five years, when other carriers have remained in the doldrums.
T-Mobile has been working hard over the past three to four years to grow its market share in the US. After trailing in fourth place behind Verizon, AT&T and Sprint for a few years, 2015 marked the year that T-Mobile displaced Sprint and moved into third place behind AT&T with just over 16% market share in Q3 of 2015. Consumer Reports recently ranked T-Mobile as the Number 1 national carrier based on the publication’s readers’ sentiments about carrier value, voice quality, text services, data speeds and customer support. Heady days for Team Magenta indeed.
This new referral program comes with a new twist, and we like it. Many wireless carriers offer referral programs today. In the interest of full disclosure, Buyapowa offers referral programs for wireless carriers across the US and Canada. Our clients typically offer compelling rewards to advocates when referrals turn into new customers. These rewards take many forms, from pre-paid credit cards to third-party vouchers to account credits where the reward funds are credited to the user’s account. That last method has the benefit of placing the reward money back into the subscriber’s account and into the coffers of the carrier itself. Many wireless subscribers don’t track their wireless account bill every month and sometimes there can be a mental disconnect between the act of making a referral (advocating for the brand) and the event of receiving the reward – when that reward is paid directly into an account, out of sight and mind of the consumer.
The idea of a referral reward being something different from a cash to an account credit is always interesting. Some brands — like Tesla and others — offer unique rewards in order to pique the interest of the consumer. Some research has shown that consumers are not always stimulated by the reward value itself, but often how it is presented. T-Mobile’s share reward is something unique in the industry, gaining both media attention and viral shares that help to identify T-Mobile as a unique brand in one of the most competitive markets in the world. AT&T offers a $25 promotion card reward to its customer advocates for referring their friends, Sprint offers a $50 American Express card and Verizon offers $25 for their program. It’s abundantly clear that referral programs work wonders for wireless carriers. We’ve seen our own clients achieve staggering growth results through the application of a referral program, and it’s refreshing to see T-Mobile taking a unique approach to rewarding their customers.
T-Mobile also has a loyalty rewards program in place, accessed through a T-Mobile customer app that allows their subscribers to access free or discounted services on their T-Mobile phone.
Unique and differentiated referral programs can gather attention quickly, and this particular program has caught the interest of a broad sector of subscribers and media. There are a lot of regulations in place that control how and when companies can “give away” their stock. Some do it through automatic dividend reinvestment programs (DRIPs) that can offer a discount off the face value of the share that is purchased through the reinvestment. But that’s boring and complicated. According to CEO John Legere, no public company has ever done this before. And while we haven’t fact-checked that claim, giving away shares as a “thank you” for a customer advocate referral conducted through an automated referral marketing program is most certainly innovative, and means that the brand is not only confident enough in its belief that subscribers want shares in the company, but it also believes that customers will value them more greatly than cash.
The outcome remains to be seen, and we’ll be watching carefully to see if T-Mobile’s subscriber growth patterns are positively impacted by this unique and intriguing reward.
What do you think of T-Mobile’s automated referral marketing program?
Would a share in your wireless carrier’s business encourage you to make a referral?