When Marc Lefar was appointed chief marketing officer of Cingular Wireless in 2003, he was faced with the unenviable task of reversing the company's first loss of subscribers in its history.
He will encounter a similarly daunting challenge as chief executive of Vonage, the Internet-calling provider based in Holmdel, N.J., that on July 29 said Lefar will take over from interim CEO Jeffrey Citron. Clearly, Vonage is in better shape now than when Citron took back the reins from Mike Snyder in April 2007, when many analysts fretted the company might go under. [Citron had been CEO before Snyder].
Still, Vonage's growth is at a standstill, customer dissatisfaction is on the rise, and competition is gathering steam. The company added a mere 30,133 new customers in the first quarter, down from 165,646 a year earlier. The industry as a whole, meanwhile, added about 1.4 million subscribers, about the same number as a year earlier, according to research firm Telegeography. "[Vonage's] growth has come to almost a complete stop," says Telegeography analyst Paul Brodsky.
What's more, customer turnover surged to 3.3 percent a month from 2.4 percent in 2007 as rivals such as cable provider Comcast and wireless carriers including Cingular, Lefar's former stomping grounds, now part of AT&T, lure subscribers with sweeter deals. The market for Internet calling is crowding, too. In June, Deutsche Telekom's T-Mobile USA introduced a Web-calling service that T-Mobile subscribers can get for $10 a month, compared with $25 for Vonage's cheapest unlimited plan.
Lefar says he'll spend his first 60 days getting up to speed, but he has already sketched out plans for reviving growth. To reduce subscriber turnover, he wants to make further improvements in customer care. He also thinks he can find ways to get more mileage from Vonage's marketing machine.
He aims to explore the prospect of...

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