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Is Telstra bribing its new customers? [Or just awarding ‘Loyalty Bonuses’?]


Recently, I was in the market for a good business plan for my mobile account. Comparing all telecoms in Australia I decided to go with Telstra. It’s not the cheapest service provider, but it is by far the best service provider in terms of network coverage. So, I made my decision, as an informed prospect, after conducting research on best plans and the best overall offering for my needs.

I thought about signing up online, but decided to give Telstra a call to see if they could sweeten the deal. It’s a known fact that every mobile operator wants your business and they give you a welcome credit for signing up. Telstra’s website states that new customers are eligible for three months credit when customers sign up on a 24-month contract.

I was happy with that, but after spending around 30 minutes on the phone with the salesperson I was convinced that he could offer me something better. After another 15 minutes of negotiation I was offered six months credit instead of the standard three months.

Well, I was quite happy with this deal so I decided to sign up on a 24-month business plus plan contract.

Here’s where it gets interesting

Once I said, “Yes, sign me up!” the salesperson said something very amusing. He said that this was a special offer which he classified as a “Loyalty Bonus” for joining Telstra.

A little taken aback, I told him that it was very nice of him to double the welcome credit classified as a  “Loyalty Bonus”. But then I asked him how he could offer me said “Loyalty Bonus” when I was not a loyal customer (remember that I hadn’t even signed up with them yet).

He said that he understood and that the loyalty bonus was a gesture of kindness that I would be a loyal customer with Telstra.

Wait a second: I was offered a “Loyalty Bonus” for signing up so, technically speaking, this should be an acquisition bonus. Generally speaking, acquisition bonuses are given to salespeople to acquire customers. I was negotiating a better deal for myself. To acquire my business the salesperson bribed me with an additional three month welcome credit.

Technically, a bribe is defined as “something given or taken with an intention to influence the conduct or judgment of the person receiving it.” Well, I was offered a better deal (which was not advertised) that, in fact, influenced by decision to join. So much for disguising a bribe as a loyalty bonus!

Not to be poetic, but what’s in a name, anyway?

Now, surely I’m not Telstra’s only new customer, and there are others out there with stories to share. Don’t get me wrong, I’m pleased with the deal I got, but I do wonder:

Exactly when is a bribe not a bribe?

Have sales tactics changed? Is it now standard practice to offer better deals to sweeten the offer for acquiring more customers — and are we quite OK to classify this as a “Loyalty Bonus”?

The questions still remain unanswered. If you have thoughts or ideas, loyal (and new) Anthill readers, please share them below.

Chintan Bharwada is a marketing expert with more than 13 years of hands-on marketing experience. Chintan specializes in Customer Acquisition & Retention, and Loyalty Marketing, and blogs at loyaltyandcustomers.com/

Image by Martin Kingsley