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Dish and the Free Word
February 26, 2008
Today both Echostar and Dish Network announced their numbers for Q4 of 2007 I had the pleasure of sitting on the phone listening to Charlie Ergen speak for two hours as this was the first time Dish Network and Echostar have had separate earnings call.
From where I sit the number for both companies over the last quarter were not good and in my opinion the poor numbers had little to do with the changing economy, from where I sit the downward spiral of new customers was due to the poor promotions in the 4th quarter of 2007 from Dish Network. On August 15th, Dish Network dropped their very popular $10 off for 10 months promotion. The day they did this many retailers reported to me that their sales dropped like a rock. The numbers presented today back up these retailers’ comments to me.
To make matters worse Dish also dropped other promotions such as free premiums for 3 months and the popular 6 months free HD promotion.
I know Charlie hates giving stuff away for free, but in this day and age folks would rather go with a company giving away freebies then go with a company offering no frills.
One thing I see today is that consumers have no brand loyalty, they go with the companies who give them the biggest bang for their buck, and if another company comes along with a better deal consumers will drop their current company in favor of the better deal.
I see so many customers that bounce from Dish to Cable, to DirecTV, back to Dish and repeating the cycle that it’s sickening to me. I have a lawyer who works in my office who is a DirecTV subscriber, and a few times a year he calls DirecTV and tells them he is thinking of canceling DirecTV and going with Cable or Dish, and every time they offer him upgraded equipment or free equipment to keep him as a customer. He does this all the time without ever really ever planning on leaving DirecTV. Guys like him must cost companies like DirecTV millions of dollars every year. Personally I don’t like folks like that who abuse the system like this, I am the kind of guy is shy about asking for service credits when he has a problem with his service, but hey that’s just me.
I hate to say it but we Americans for the most part are cheap, we love to jump at anything marketed as being free. And many times we don’t look at what these free products actually cost us. Sometimes free has a heavy price tag attached over the long run, while at other times free means that you get what you pay for.
The fourth quarter was a strange period for Dish Network; as the company was split in two, so wont really see the big picture of what this all means until we see the results in May of Q1, 2008.
So now it will be interesting to see what the company does to finish off this customer, keep its current watered down promotion, which is barely generating any sales, or will Charlie need to bite the bullet and give more stuff for free?
There is that free word again… man I hate that word. See you next time!
Posted by Scott Greczkowski on February 26, 2008 | Comments (3)
