Method

iPhone and Verizon customers rejoiced today when Verizon announced the iPhone 4 arrival on its network February 10, 2011.

Verizon’s network quality was ranked the strongest by Consumer Reports last year, with AT&T’s network ranked last, so the commotion and high hopes for increased network quality are valid. However, where does this leave AT&T and its customers that are locked into a 2-year agreement?

Instead of proactively trying to give customers a better experience with the brand, AT&T has recently taken the defensive: upping early termination fees for smartphone users and refusing to offer billing leniency through customer service.

While there will be continuing difficulty to increase network capacity in areas of high traffic (such as New York and San Francisco), there should be another focus: improving customer service and forging a strong relationship with customers. Up until recently, the added benefit of being an AT&T user was the ability to own an iPhone. Instead of becoming part of the AT&T “family,” users are increasingly made to feel trapped into a service contract.

A retention strategy that focuses on providing more value to customers seems to have been overshadowed by one that forces customers to stick out their 2-year plan – or face a higher penalty. With various reports of bad reception and equally poor customer service, there are few positive stories to persuade existing customers that AT&T provides a better wireless relationship.

So, what should AT&T do? Advertising and PR campaigns are not a retention strategy. Instead, they should create sincere relationships with customers and build a service brand that provides users with the best treatment and added value while simultaneously improving their network quality.

As iPhone owners, our relationship currently lies with our phones, not the service provider. It could be any network, and AT&T is faced with the opportunity – and business requirement – to drastically change that opinion in their favor.