U.S. Cellular revamps rate plans, rewards loyal customers

U.S. Cellular is breaking from the postpaid operator pack by offering customers a new rate plan policy, called The Belief Project, which rewards customers for their loyalty.

Alan Ferber, executive vice president of operations at U.S. Cellular, The initiative offers reduced overage charges, earlier phone upgrades, paperless billing discounts and free accessories. But perhaps the most significant part of The Belief Project is that U.S. Cellular is not requiring customers to sign an additional two-year contract after they fulfill their first one. "This is the first time a carrier is recognizing customer loyalty and freeing them from the cycle of signing contracts," said Alan Ferber, executive vice president of operations at U.S. Cellular, in an interview with FierceWireless.

Ferber said the company queried its customers and found that having to sign a contract was one of their biggest frustrations. "Customers are telling us they want something better, they want to be respected and valued."

Company executives believe the new program will improve churn. "Customers on The Belief Project will be getting a 5 percent discount on their bill, reduced overage charges and phone upgrades. If they leave, they will have to walk away from those rewards and go sign a contract with another carrier that doesn't offer those benefits," said John Coyle, senior director of strategy with U.S. Cellular.

Frost & Sullivan Analyst James Brehm is bullish on the program. "I believe this is a game-changer on how to manage and handle your relationship with customers."

Although U.S. Cellular is eliminating recurring contracts, company executives do not want to be grouped with other no-contract wireless firms such as Leap Wireless (NASDAQ:LEAP) or MetroPCS (NASDAQ:PCS). "We are targeting a different customer," Ferber explained. "We are targeting the traditional postpaid customer that wants a high-quality network, a wide variety of phones and values things like a rewards plan and national rate plans."

Specifically, U.S. Cellular's Belief Project offers:

  • U.S. Cellular customers may be able to upgrade their phone as early as every 10-11 months, instead of the standard 18 months, depending on their rate plan.
  • Customers who sign up for both auto pay and paperless billing with a debit or credit card get a 3 percent discount on their monthly bill. Customers who sign up for both and use a checking or saving account receive a 5 percent discount.
  • All postpaid customers can earn points, and can redeem points for things like phone upgrades, accessories, overage forgiveness or ringtones. Customers are automatically enrolled in the reward program when they sign up for any U.S. Cellular Belief Plan.
  • Voice overage charges will not exceed $50 for a single line or $150 for a family plan. Text messages will alert customers when they reach 75 percent of their allotted minutes or text messages and again at 100 percent, so there isn't a surprise when the bill arrives.

 For more:
- see this press release
- see this BusinessWeek article
- see this Reuters article

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