T-Mobile is attracting customers, in the millions every quarter. Now it needs to keep them. Will free pizza and a $46 share of stock do the trick?
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In a typically ribald presentation that absolutely didn't involve any double-entendres about spanking, T-Mobile CEO John Legere announced a series of giveaways he called "Get Thanked." The first set involves a free app, T-Mobile Tuesdays, which will initially give customers a free medium two-topping Domino's pizza, a small Wendy's Frosty, a $5.50 credit for a Vudu digital movie rental, and a ticket to the movie Warcraft, with other similar giveaways to follow each Tuesday.
On June 14, the giveaway will be a $15 Lyft ride. On June 21, it's a $20 MLB gift card. On June 28, nab a 1-year subscription to Bon Appetit magazine. More giveaways will come from partners including Samsung, StubHub, JackThreads, Hotel Tonight, Fandango, MLB, MGM Resorts, Buffalo Wild Wings, and Gilt, according to a slide displayed by T-Mobile at a Monday event.
"I'm gonna thank you like you've never been thanked before," Legere said. "You deserve a good thanking."
T-Mobile is giving every customer a share of stock, currently valued around $44, as a second gift. Customers who refer new subscribers will get an additional share, up to 100 per year; customers who've had T-Mobile for more than five years and refer subscribers will get two shares per new subscriber. To get the stock, subscribers must go through the T-Mobile Tuesdays app and sign up for a free brokerage account. T-Mobile will waive any transaction fees for the first year.
Customers will also be able to enter sweepstakes to win larger prizes such as a trip to Peru and a Warcraft movie viewing party.
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Finally, T-Mobile is giving away an hour of free GoGo Wi-Fi on all flights starting June 13, plus the ability to use over-the-top messaging apps iMessage, Google Hangouts, WhatsApp, and Viber freely during flights.
T-Mobile's giveaway program follows AT&T's announcement last week of "AT&T Thanks," an AT&T subscriber program giving away two-for-one movie tickets valid only on Tuesday nights, and "special content" for DirecTV subscribers. But T-Mobile is giving away far more valuable stuff, and more of it, than AT&T.
"I think that the AT&T announcement is the funniest thing I've ever seen," Legere said. "They proved my point that loyalty programs are broken, they're trickery, and they don't do anything."
What's Really Going On?
T-Mobile has grown by leaps and bounds over the past two years, thanks to an improving network and spectacular marketing. But with Sprint suddenly becoming much more aggressive, the company needs a way to counter Sprint's half-off service plan promotions, ideally without lowering its own monthly rates. It's all in the name of reducing churn, keeping the 66 million customers T-Mobile now has.
"The most financially sensitive thing in any wireless company's P&L statement is whether people are satisfied, and whether they stay," said T-Mobile COO Mike Sievert.
Stock not only has a cash value, it makes customers feel (literally) invested in the network. T-Mobile isn't diluting its stock with this program; it's buying the stock on the open market, which makes it look a little more like a stock buyback. Wall Street likes stock buybacks, which tend to raise share prices.
The partner gifts, meanwhile, may be coming from companies that are thirsting to get in front of T-Mobile's very enthusiastic customer base. T-Mobile CMO Andrew Sherrard said while the company pays for some of the perks, "there are partners that really want to bring people in."
"When that many millions of people get to interact with not just our brand but another brand, it's going to send a whole new set of partners thinking, 'Can I be the next week's partner?'" Legere said.
Now think of some of these brands: Vudu, which has always been far behind Netflix and Amazon in popularity; Warcraft, a very high-budget film that hasn't gotten great reviews; Gogo, which recently lost American Airlines as a client in its new planes; Lyft, always the underdog under Uber; and JackThreads, which...who? They need T-Mobile as much as T-Mobile needs them.
Unlike Binge On and Music Freedom, these perks also don't impact T-Mobile's network, which may be feeling the strain of taking on all those millions of new subscribers. We recently finished our Fastest Mobile Networks drive tests, and we'll have a full picture of T-Mobile's network quality in about a week.