Welcome, Distress Discount Packages

Posted by: Olga Kharif on October 10, 2008

Ranjan Mishra, founding partner of consultancy ESS Analysis, has an interesting idea: To help out customers stuck in between a rock and a hard place in the current financial crisis, he suggests that wireless companies start offering “distress discount packages.” Various assistance programs could be modeled after what’s already implemented by utility industries and gyms, which have long offered a free month or two to members who have lost their jobs.

In the coming months, I think that idea of special deals is going to spread well beyond wireless, into home phone, TV, broadband and other services. When I talked to my auto insurance agent today, he said he’s been inindated with calls from customers unable to pay their premiums and asking for special deals. Companies that subsist on monthly subscriptions — outfits offering online music, paid content, and other services — will feel the pinch, too. As consumer spending tightens, a lot of providers will have to start offering special deals — or resign themselves to loosing subscribers.

This has huge implications for a lot of companies’ revenues and profits outlook.

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Reader Comments

dg

October 10, 2008 08:17 PM

Kinda old hat in a new package. I've yet to meet a company that won't cave to something free, extended or discounted if you're in good standing and threaten to bail. Maybe Ranjan needs to start reading The Consumerist: http://www.consumerist.com

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BusinessWeek writers Peter Burrows, Cliff Edwards, Olga Kharif, Aaron Ricadela, Douglas MacMillan, and Spencer Ante dig behind the headlines to analyze what’s really happening throughout the world of technology. One of the first mainstream media tech blogs, Tech Beat covers everything from tech bellwethers like Apple, Google, and Intel and emerging new leaders such as Facebook to new technologies, trends, and controversies.

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