In May of last year Xfinity Mobile entered the wireless marketplace as a competitor. Since that time, everyone is wondering how they are doing. After meeting with them, getting a better understanding of their strategy and seeing their performance, I would say, so far, they are on target. However, their growth strategy is different than you may think.
It’s important to understand the reasons Comcast entered wireless and why they have different goals. They are not taking the same strategy as the top four wireless competitors, namely Verizon Wireless, AT&T Mobility, T-Mobile and Sprint. These four are all competing with each other, trying to win market share in more traditional ways.
That’s not the Xfinity Mobile strategy at all. Yes, they are an MVNO. Yes, they resell Verizon Wireless services under their own brand. Yes, they sell a competitive wireless service and yes, they do compete with other carriers, but that’s where the similarities end.
Rather than trying to become number one and sign up as many new wireless customers they can, they are only selling Xfinity Mobile to their existing customers. This is a much smaller universe than their competitors are focused on.
Xfinity Mobile strategy is creating a sticky bundle
If their strategy is to sell Xfinity Mobile to their existing customers, that’s a smaller group then the general public focused on by their wireless competitors.
In this first stage of growth, they are focused on creating a sticky-bundle of services to keep their customer base intact as the industry changes around them. And so far, this bundling strategy seems to be successful.
Their primary goal is to make sure their core customers stay their core customers. That’s why they don’t spend the same kind of money and effort on advertising as Verizon, AT&T, T-Mobile or Sprint. That’s why they don’t need to have stores in areas where they don’t offer pay TV.
They are using Xfinity Mobile to create a sticky-bundle. Something I have talked about countless times over many years. This idea works. This is why many other competitors offer a multitude of services. They all want to build their own sticky-bundle.
The idea behind this is simple. If you get your customers to buy multiple different services from you, and at a significant discount for bundling, they find it difficult to unbundle. To walk away. The reason is simple. Doing so means they will lose all the benefits and discounts they enjoy.
Wireless competitor tries to distort what’s happening
Recently, one of the wireless competitors pointed a finger at them, saying they are not winning. They used terms like “irrelevant” and “incompetent”. They also suggested Xfinity Mobile would never win. To this I say, this competitor simply doesn’t understand the strategy. Perhaps, they are looking at this from their own perspective. And that’s the wrong way to look at this.
Everything I see says the Xfinity Mobile strategy seems to be working well, to date. It has been less than a year and they have already signed up nearly 400,000 of their existing customers to their new Xfinity Wireless service. And that was a month or two ago. This success solidifies their core base of customers. And that growth wave continues.
Keep your eyes on the wireless ball
Workers, customers and investors need to keep their eyes on the ball and not pay attention to chatter of industry competitors who try to confuse the issue and point us in the wrong direction. It’s important to understand, today we can no longer judge all wireless players with the same yard stick.
The wireless war won’t be won by bullies. Wireless will be won by great marketing, great relationships with the customer, better service, quality, bundles, price and more. Carriers that focus on these areas will be the long-term winners.
Remember, there are two distinct strategies in today’s wireless marketplace. Some competitors are trying to win market share while others are just selling to their own customer base to stabilize their business with a sticky-bundle. Both strategies make sense, but both are very different.
Based on what I see so far, the performance by Xfinity Mobile today looks strong and is doing exactly what they want it to do. It creates a sticky bundle. It makes it more difficult for customers to leave. This helps the company maintain their customer base. Which is exactly what they want.
It will be very interesting to watch Comcast Xfinity Mobile continue to grow and change in the wireless marketplace going forward. In fact, it has always been very interesting trying to keep up with this fast growing and rapidly changing industry.
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