Pre-Paid Struggling to Keep Customers

Pre-Paid Legal Services (PPD Quote) broke its New Year's resolution.

The company's plans to improve customer retention have panned out about as well as a doomed fad diet. A year after promising better retention -- and sacrificing some growth in the process -- Pre-Paid is losing more customers than ever. For the second year in a row, the company has ended the fourth quarter with fewer customers than it started with.

Even after adding 153,501 customers, including a few thousand buyers of "identity theft shields," Pre-Paid finished the quarter nearly 2,000 customers short of where it started. A year ago, when its business started shrinking, Pre-Paid saw its stock slide 25% even as it rushed to reassure the market that the slowdown was temporary -- and even self-inflicted -- in nature. ...