I have traveling for so long that I didn’t know the reason behind the drop in Vonage’s stock price which is now around $10. According to Russell Shaw the reason seems to be the fact that Vonage is being very aggressive with customers looking to cancel. The company is offering free services and a drop in price o keep customers.

For this the stock got hammered.

Here is my question.

If so many people are focusing on Vonage’s amazingly high cost of customer acquisition, why is it bad for Vonage to spend a far less amount to keep a customer on their network?

The phone companies do the exact same thing.

This isn’t a new practice.

I think it is very smart and it doesn’t seem like something worth punishing the company for. Rather they should be rewarded.