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    Have Sky changed their business model?

    This is a discussion on Have Sky changed their business model? within the Sky & Sky+ TV forums, part of the Other Sky help and support category; Have Sky shifted their focus or modified their business model in relation to "Churn". I have recently corresponded with the ...

    1. #1
      Faust's Avatar
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      Have Sky changed their business model?

      Have Sky shifted their focus or modified their business model in relation to "Churn". I have recently corresponded with the Sky escalation team with regards to two issues. Issue one being the problems I have experienced with my Pace PVR2 since last summers software upgrade designed to put the box into auto standby - problems covered in detail by many contributors on this forum.

      Issue two being the emphasis placed on new customers with the discounts offered whilst their loyal customers have to pay through the nose for any hardware upgrades.

      To cut a long reply very short the upshot is that Sky offered me tea and sympathy over the Sky+ box but pointed out that the problems were mostly confined to those customers who had installed their own larger Hard Drives. Makes you wonder if they have purposely introduced the bug that is causing these problems. On the subject of offers to new customers they said that is a deliberate business decision and we all benefit as the revenue generated by new customers improves programming.

      Sky finished the email by stating that existing customers were important to them, however, if I wasn't happy with their response that I was at liberty to cancel my subscription.

      Not long ago Sky would have fought tooth and nail to keep a customer like myself paying approx 800 per annum, but now the attitude is you can go and we won't try to keep you?


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    3. #2
      reddwarfcrew's Avatar
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      Re: Have Sky changed their business model?

      someone posted a few days ago that they get 15 new customers for everyone 1 that they lose.

      With stats like that, they need to invest all their money in new customers not old.

      If the stats move more to 1 to 1 then customer retention will kick in.

    4. #3
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      Re: Have Sky changed their business model?

      Well that decision has just cost them 192 a year as we are dropping our subscriptions down to just 4 mixes - to be honest we rarely watch Sky Movies anyway as they just seem to be getting worse. We are then going to take stock at the end of the summer managing with just the 4 mixes and if we are OK with that then I think we will ditch Sky altogether and just go for a Freeview PVR.

      Yes, I can quite see now how this is a good business decision by Sky with revenue from customer going from 800 to zero
      Last edited by SatDish; 26-03-08 at 11:49 PM. Reason: no need to quote the preceding post

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      Re: Have Sky changed their business model?

      yep but you are looking at just one customer impact and not the cost for an entire retention program.

      There is quite a big cost to set up a retention program (admin costs, staff costs, training costs etc before you even get to the cost of the retention incentive).

      They can make more profit by investing that money in getting new customers than trying to keep existing.

      As I say if the swing starts to go the other way, the they would be better investing in a retention program, but with those stats it is not going to be profitable to run a retention program.

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      Re: Have Sky changed their business model?

      Does that mean if sky had given you a discount/free new box you would have continued to pay them 800 pound a year even tho you do not watch most of the channels ?

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      Re: Have Sky changed their business model?

      Quote Originally Posted by Faust View Post
      take stock at the end of the summer managing with just the 4 mixes and if we are OK with that then I think we will ditch Sky altogether and just go for a Freeview PVR.
      If i recall correctly, you have only just joined sky broadand. Therefore you must subscrive to Sky TV in some form or another until the 12mth BB sub is up.

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      Re: Have Sky changed their business model?

      1 customer leaves 800 (in your case) lost. On the same day 15 customers join paying 800 each per year 12.000 gained. Skys attitude at the moment proved right

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      Re: Have Sky changed their business model?

      Quote Originally Posted by reddwarfcrew View Post
      If i recall correctly, you have only just joined sky broadand. Therefore you must subscrive to Sky TV in some form or another until the 12mth BB sub is up.
      No not at all as they have already issued me with a MAC code for messing up the original migration and I have had a letter from them stating I will be released from the contract without penalty due to their poor performance should I wish to leave.

      Even if this wasn't the case they cannot make you continue to take their t.v. package just because you have BB. They could of course dump you from your BB service but what would that achieve?

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      Re: Have Sky changed their business model?

      Quote Originally Posted by Postman Pat View Post
      1 customer leaves 800 (in your case) lost. On the same day 15 customers join paying 800 each per year 12.000 gained. Skys attitude at the moment proved right
      I have just finished reading a very interesting City report from Morgan Stanley which has downgraded Sky stock as they expect Sky Churn to rise considerably and that they don't expect them to hit their 10 million customer target either. I have also been reading a very interesting article from Mark Anderson Sky's head of retention and new business (both areas now integrated) which if you believe him then what he says is completely contrary to the response I received.

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      Re: Have Sky changed their business model?

      It's not just Sky who do this now. Orange do exactly the same. Whether we like it or not new customers make more profit then older ones. At the end of the day we are all (or nearly) out of any contractual commitments to Sky for BB - Well I am anyway, so I could walk tomorrow if I wanted.

      Even Plusnet were offering a fiver a month discount if you would commit to a 12 month contract, heard similar for BT - They all want commitments. Broadband is so volatile at the moment, give it another 12 months and I bet you will see a lot of the smaller ISP's folding.

      Sky have it right imho We have had our Interactive discount when we signed up to them originally, why should they give us another? Yes free things are nice, but in all honesty when I called their bluff and told them to stuff it and cancelled, I was only in reality penalising myself and my family. Not Sky, they are just smart enough to realise that and call your bluff.
      ~ Never, ever, argue with an idiot. They'll drag you down to their level and beat you with experience ~

     

     
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