In an effort to attract new customers, one mobile-phone carrier is extending a helping hand. Virgin Mobile USA will give customers who have lost their job three free months of service.
The company will roll out its Pink Slip Protection plan beginning April 15. The program includes a waiver of up to three months of monthly charges, including taxes and surcharges, if the customer should become unemployed.
"It's certainly prompted by the difficult economic environment we find ourselves in, and our customers tend to be in the mid-lower socioeconomic levels, very impacted by the current recession," said Jayne Wallace, a spokesperson for Virgin. "What inspired it was our direct conversations with customers, asking them what is important to them, what would be features of value we might provide."
New Virgin Mobile customers who opt for its monthly plans without annual contracts are automatically included in the company's Pink Slip program. Customers, however, have to have a monthly plan for at least two months before getting the protection.
Customers who lose their job and become eligible for state unemployment benefits within 12 months of losing their job -- and can prove it -- will be covered.
The Pink Slip program comes with Virgin Mobile's new $49.99 Totally Unlimited Calling prepaid program and will also apply to the company's new Texter's Delight program, for those who are thumbing more than talking.
"Virgin Mobile has always looked to be a customer champion and innovator -- for example, we introduced Sugar Mama in 2006, which lets customers earn free airtime in exchange for watching ads online -- and our Pink Slip Protection program fits right in there," Wallace said.
Job cuts are rising at a historic rate, leading customers to tighten their budgets and change their spending behavior.
"With the unemployment rate rising, the fear of job loss or salary reductions have made consumers watch every dollar," said Dan Schulman, Virgin's chief executive. "These issues tend to impact our prepaid base more than any wireless users."
Since 2008, Virgin Mobile has been trying improve its balance sheet. Last month during an earnings call, Schulman said the company began to show better results in the third and fourth quarters with more customers. Total customer additions in the fourth quarter were approximately 216,000, bringing the company's customer count at the end of the year to just under 5.4 million, a six percent increase over year-end 2007.
Still, Virgin executives began to implement cost-saving measures, including outsourcing all its information-technology infrastructure to IBM, reducing its head count by 10 percent, and renegotiating its network contract to get rid of any minimum payments and improve unit cost by 10 percent. All the changes are expected to produce $50 million in savings this year.
New network rates from Sprint gave the company an opportunity to pass the cost savings to customers. "This offer allows us to effectively compete in the market, and we believe will help to further improve our financial performance," Schulman said.