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Vonage CEO: Customer acquisition cost "not acceptable," mobile phone client coming
Stating the obvious in Vonage's 2008 earnings call, CEO Marc Lefar called the company's expenses to secure new customers "not acceptable," and added that the net addition of customers and cost of customer acquisition "fell well below" expectations. Lefar rattled off a series of improvements Vonage needed to make in bringing on customers and improving problem resolution. He also briefly sketched out new product offerings, including some sort of mobile phone client to leverage WiFi.
For starters, the SLAC - marketing expense per customer brought onboard - has gone up to $309, despite reducing marketing costs by $3 million from the previous quarter. Last quarter, SLAC was reported at $289.
Lefar wants to improve the quality of prospects calling into the company. While Vonage's latest set of commercials have produced a 10 percent improvement in the level of interest compared to prior work, the company is looking for a new ad agency and expects to close a deal at the end of this quarter.
Once customers arrive, the onramp experience to get them beyond sign-up to actually using the service needs to improve; after three weeks, a quarter of the customers who have signed up haven't used the service.
Many customers who leave Vonage for competitive reasons are leaving due to call quality, Lefar said, so improvements are needed there as well.
Customer care is also a big cost center that Vonage needs to optimize. Lefar said the company gets 10 million calls per year into its call centers, but many of those can be "completely eliminated" with IVR and self-service web based tools. A 10 percent reduction in live calls would save the company anywhere from $6 million to $8 million per year.
New products Vonage is looking to include improvements to core services such as outbound caller ID and autoconnection to a 411 service. The company sees new market opportunities outside of the U.S., UK, and Canada to leverage its heavy international usage.
Vonage would also like to "take advantage of" open mobile applications, with download/preloaded apps using WiFi for local connectivity a "good opportunity." VonagePro is going to get fine-tuned, as the company develops an SMB offering to support up to 10 phone lines.
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Comments
Posted by Anonymous | February 27, 2009 - 3:01pm
Yeah, well the CEO may start with fixing up gus website for call quality concerns. After every few calls, Skype pops up and asks you about quality. I've had an issue between Vonage at home and a few but not all phones in my office in which the call breaks immediately into hard static. The issue recurs every time with those specific phones. Try to report it on the Vonage site? Impossible.
Posted by Dianne in Atlanta | March 2, 2009 - 11:25am
I've been a two-line vonage customer for several years. I've had very few problems at all - but when I have it's been a minor setting adjustment. I've had phones that failed (the actual handset) - - and I've had my ISP go down . . but Vonage has been pretty dependable. I had more problems with my landline than I've had with my Vonage!!
Posted by Anonymous | March 25, 2009 - 7:54pm
I would suggest that the CEO read complaints written by people who try to cancel the service. I got an email that my yearly contract was renewing and I immediately called them and said no, I don't want to renew and please cancel my account and refund the $299 they charged to my credit card. She cancelled the account but said I would not be getting any refund!! What? I just terminated service and I can't get a refund?? Marc Lefar, you need to wake up and do a little searching to find out all of the problems with Vonage. You have become the captain of the Titanic!!
Posted by Anonymous | March 30, 2009 - 4:15pm
Just cancelled, that was a picnic in itself! Service was terrible, dropped call after dropped call. Had purchased the Vonage package with three of their phones, found them very difficult to use, very frustrating. Input a number only to see the first number had not taken. The Phillipine gal that took my call talked so fast I could hardly understand her. Good riddance to Vonage.
lmg
Posted by Anonymous | May 11, 2009 - 10:21pm
I just cancelled my service as well. I am in the United States Army, about to be deployed, cancelled my service 2 months after renewing for a year and they will not partically refund my money. They said since I did not call in 45 days, sorry no refund. How did I know that I was being deployed earlier then expected. If this is the way they are going to treat a Soldier serving his country, then I do not need them. Now I am about $200.00 for 10 months of service I can't use.
Posted by Anonymous | February 25, 2010 - 5:30pm
same happened to me, disgusting how they treat their customers!
Posted by KRA | July 21, 2009 - 8:10am
Sorry, but, VONAGE outsources their customer service reps. I do NOT conduct business with ANY company that does this. JUST SAY NO !
Posted by Anonymous | July 25, 2009 - 12:49pm
I have just found out that vonage states I have made calls on my NEVER USED vonage system and has listed them for me. The modem has been in a storage closet ever since the first call I attempted did not go through. If they have a system where calls can be made by other people from my phone number, what else are they able to do? How many people have access to our phone lines, and possible through them, our computers? But if my modem is not hooked up, how can that happen?
Posted by MAD Customer 13761324876 | November 5, 2009 - 8:07pm
Vonage is a scam, they won't let you cancel, charge erroneous fees, etc. DO NOT DO IT!
Posted by Anonymous | December 2, 2009 - 11:00am
What does the acronym SLAC actually stand for?
Posted by Anonymous | January 5, 2010 - 2:46am
MAD Customer... I believe they have a scam going as well, but I just found out a way out. If you want to just vent your reason for leaving, or want to file a formal complaint to the office of the CEO. Send to Marc Lefar directly or try calling their executive response team at 888-580-4020.
A friend referred me to them, and found some positive info online regarding some experiences. Poor customer service is the downfall of this company.
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