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Open Letter to Daniel Mead, Verizon CEO

Dear Mr. Mead,

I will first state that I am a loyal Verizon Wireless customer, because that fact may impact your view of the comments that follow.

I think that the age of 2 year contracts is over. In my limited knowledge of the cell phone industry and how it works, I see the strongest argument for the two year contract being customer retention. If you make them sign on for 2 years, you’ve got them for 2 years.

While that may still be a concern for smaller and/or inferior carriers, I don’t see that as a major problem for Verizon. And if we can agree that retention is not a major issue, we might also agree that a 2 year contract is hurting sales.

Here’s my point. In today’s age of technological advancement, each model phone lasts on the “new” shelf for about one year. In a world where Apple silently stated that updates and upgrades are an annual occurrence and the fearful competition followed, a company like Verizon stands to benefit.

By instituting a 1 year contract instead of the long-standing 2 year, you might encourage people to buy more phones. And those same people might buy newer phones (more expensive). You can make the same amount from monthly fees and more from phones. Sounds like a win to me.

And think about the marketing opportunity that comes with shortening the contract. I bet you win more customers from that marketing campaign alone than you would risk losing to other carriers after 1 year of service.

Of course I’m just one man looking at this thing from the outside. But sometimes, that’s what it takes to come up with the next big idea, am I right?


Zach Heller