The metrics driving Verizon’s turnaround

Good morning. Verizon is starting to show what happens when customer experience becomes a growth strategy.

The telecom giant is in the midst of a multi-year transformation toward a leaner, AI-driven model. On the company’s Q1 earnings call Monday, Dan Schulman, chief executive since October, pointed to churn as “the clearest measure” of whether the company’s efforts are resonating.

Verizon, No. 30 on the Fortune 500, reported its first positive first-quarter postpaid phone net adds since 2013—a net addition of 55,000 postpaid phone subscribers. Postpaid customers, who pay monthly bills under contract, are considered the most valuable because they carry the largest bills and are less likely to switch providers.

Consumer postpaid phone churn was 90 basis points in Q1, a sequential improvement of 5 basis points from Q4, and improved further in March to below 85 basis points. “That is a significant improvement both sequentially from Q4 and within the quarter, and it reversed the upward pressure we had seen in churn over the past several years,” Schulman said.

Lowering churn makes Verizon’s “marketing dollars work harder because we are not simply replacing customers who leave; we are adding to a more stable base,” he said. The company is no longer predominantly reliant on expensive promotions to drive growth, instead focusing on a “disciplined, repeatable, and fiscally responsible” approach, he added.

Schulman, the former CEO of PayPal and previously Verizon’s lead independent director, succeeded Hans Vestberg. He was charged with steering Verizon’s next phase of customer focus and financial growth. Under Vestberg, Verizon struggled to articulate a clear strategy around market positioning, branding, and pricing, according to analysts.

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