Verizon (NYSE: VZ) introduced a new loyalty plan earlier this year focused on adding value for FiOS customers called My Rewards+, an initiative designed to recognize a customer's service choice and provide rewards for certain behaviors. Now it appears that it's paying off.
Following a pilot in Texas and Florida, My Rewards+ was launched across all of its FiOS markets last month.
This program is similar to the loyalty programs that are currently offered by credit card companies and car dealerships. It rewards customers for various activities like replacing their paper bill and paying online or renewing their contract.
Every time they engage in one of these activities they will earn points that Verizon says equate to 1 cent per point. Customers have the option of redeeming their points for a reloadable Master Card, merchant gift cards, or donating to any eligible charity of their choice.
One of the key drivers for Verizon to deliver My Rewards+ is customer retention. The telco conducted a study in 2013 to better understand why customers churn.
"The research showed that one of the top 3 reasons was Customer Loyalty and Verizon not having a Customer Loyalty program was a major factor for customers leaving," said Bob Elek, a Verizon spokesman, in an in e-mail to FierceTelecom. "That was the origin for the program. We heard clearly from our customers and we want them to feel valued."
Out of the 133 pilot participants that took part in an independent survey, over 25 percent said the program made them feel more valued, while about another 20 percent said they felt an increased likelihood to stay or a stronger bond with the telco due to the program.
Verizon's move comes at a time when its customer base is being poached by aggressive cable operators like Comcast (Nasdaq: CMCSA) that are upping their own broadband speeds and content libraries, even in markets where it offers FiOS.
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