April 23, 2007

Vonage: No New Customers

If you believe the phrase "It is 'x' times cheaper to retain a customer than to acquire a new customer", you'll have a wonderful lab experiment to monitor, courtesy of the plight of Vonage (thanks, Jim Fulton).

Earlier this month, Vonage was barred from acquiring any new customers as part of their ongoing dispute with Verizon. Vonage attorney Roger Warin said it best:

"It's the difference of cutting off oxygen as opposed to the bullet in the head," Warin reportedly said. Urging the judge to reconsider, he added that the decision would "in effect slowly strangle Vonage."

What would you do if your company were not allowed to market for new customers anymore? What levers would you pull to prop-up sales as long as you possible, before your business imploded?

Page Counts When Bifurcation Hurts All Other Customers

Yesterday we talked about the fact that best catalog customers (a minority of your file) deserve MANY catalogs that are merchandised with...