With recession expectations growing, some companies are taking unusual steps to hold put on to customers

by David Bogoslaw

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Even before the U.S. economic outlook darkened as the heaviness of the monetary crisis came into focus, companies started to get more aggressive in their attempts to hold onto old customers and attract new ones. Telephone companies’ offers for two months of free service and reduced rates, discounted gym membership renewals, and generous gift cards from high-end department stores all underscore a pervasive fear on Main Street: With the uncertainty on every side the evidence of debt seize-up, consumers may be digging in for a long hibernation.

In upstate New York and other country communities it serves, Frontier Communications (FTR) is even sending sales representatives door-to-door to persuade customers to lock in another year’s worth of service at a rebate rate. Those visits are effective where customers are often two-income families with busy lives, and many of those drop-ins are scheduled in advance, says Brigid Smith, a company spokeswoman. "We’re sensitive to what this financial crisis means to them and we have to communicate with them," she says.

It’s not barely because of the gloomier economic picture that Frontier and other telephone companies are trying harder to hold onto customers. Ongoing friction of users to more advanced technologies, be pleased with wireless, and poaching by cable companies bear also called for more aggressive detention efforts. Verizon Communications (VZ) estimates an mean proportion loss of 8% to 9% of its buyer landlines a year over the past small in number years, in the greatest degree of them going exclusively wireless or switching to service from a mode of speaking over IP (VOIP) or cable company, says prolocutor Bill Kule. The barrage of competition from cable operators was a key force for Verizon’sitting fiber-optic service, called FiOS, which bundles voice, high-speed Internet, and television service together into a triple-play package, that had been connected in more than 7 million households by the end of June.

Verizon has prolix been pitching promotional offers at "customers on the clift of leaving," says Kule, but those became more urgent after the company saw bigger than expected departures of both broadband and mode of speaking customers during the second quarter. Since July, it’s been offering all three services in opposition to the price of two to keep customers belief about switching and to win back residential and diminutive business customers who have already left, says Kule. Verizon is furthermore urging customers to symbol up for at minutest a one-year plan, hoping it will help them remain, he adds.

The tougher economy may have put cable service providers more squarely in the catbird seat, relieving some pressure to offer perks to customers. Their exposition: Subscribers to premium cable channels and pay-per-view events have arguably even now chosen to cut their entertainment expenses and trade down—through staying home, says Christopher King, a telco analyst at Stifel Nicolaus (SF).

Long before the financial crisis tripped off new alarms last month, DirecTV (DTV) had initiated a program to retain customers, who sign up for one or the other 18 months of standard service or two years in opposition to advanced service through features so as high-definition. "We’re always looking at customers who are about to roll off their commitment, and there are groups we do go after with commitment-renewal efforts," using free digital video recorders or HD boxes because incentives, says Paul Guyardo, DirecTV’s chief sales and marketing official.