A few months ago, my wife and I ditched our cable service.
I could bore you with all the individual reasons but it really came down to the fact that we felt like we were being overcharged and not listened to.
Sound familiar?
Approximately 90 days after we left they sent in the “We want you back as a customer” dudette and guess what she offered?
She offered a much lower rate and she was suddenly ready to listen!
Time Out . . . Several months before we left we asked them how we could lower our cable bill. We didn’t demand that they lower our bill. We asked them what we would need to do to lower our bill. Things like ditching movie channels as well as a few hundred of the other channels that I’m confident contributed to the high bill.
They had lousy answers back then and their hands were tied.
Let’s get back to the “We want ya back” dudette.
She offered all kinds of free channels for the first 90 days or so and . . .
This part burns my hiney . . .
To pay all our penalty fees for cancelling with the new company.
Painfully, “Sales 101ish” moment in 3,2,1 . . .
Wouldn’t it have been less expensive & easier to just do the right thing when we were their customer?
The problem runs deeper than that because I believe this mentality punishes their customers.
Why?
Because you get a better deal when you aren’t their customer!
This mentality has another ugly face to it.
Don’t we punish our clients and especially early adopters of our product or service when we discount because we need to move product?
In essence we’ve said “Thanks for your business. You get to pay full price for buying too early while these other people get the better deal because we’re desperate now”
Just out of curiosity, how do you feel when you discover that the potential customer gets a better deal than you the customer?
Does it make you feel warm and fuzzy when they suddenly give a damn after the break up?
I hope that people who read this who are in a buying position don’t reward this type of behavior by cancelling their new vendor, new service etc to go back to the other company . . .
Who only gets it right when the buyer walks!
In those moments we now punish those who got it right without you having to leave.
Something to think about!
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Hi Paul,
one of my favorite subjects. Disrespecting existing clients is in my top ten list of poor customer orientation and needs to be punished. For me especially good in this are banks. In my home country nearly every bank offers you some candy if you change to them. Right now I have an ad from my bank in front of me which offers clients who move their share-portfolio over to them 1 % of its value, maximum 350 $ as a reward. Not bad, helps a bit to recover the losses these days. Maybe if I move my portfolio around from bank to bank I even make a profit in the stock market. Whenever I can I do not use companies who forget their loyal clients and are only after the fresh meat. Unfortunately there are also a lot of bargain hunters out there who support this kind of system. So, this should move us even more into the right direction. Reward your loyal customers and let the bargain hunters go to the bargain offers. Bad and bad fits well together.
Take care
Roy
Couldn’t have said it better myself Roy . . . Well stated!
Thank you for taking the time to stop by and comment!
Great post, Paul. Would you mind just stepping off the soapbox for a minute so I may add a few words to the topic?
Marketing 101, Sales 101, Customer Care 101….let’s face it, Business 101 tells us that it’s so much easier and far more cost effective and profitable to look after and sell more to your existing customers as well as getting new clients on board.
Just as you say Paul, there are so many large and small companies out there who just don’t get it. Or, if they do, they’re just hoping that their customers continue to exhibit the same apathy that’s got them onto the poor deal they are on today.
Yet, in my experience, many small companies do understand the concept of look after their existing customers. They just don’t (or won’t) find the time to understand how to or find the time to do what’s needed to make it happen. Unfortunately, such an approach leads to the same outcome you describe.
For large corporates, huge swathes of banking, insurance and utilities sectors demonstrate daily how not to do it. I expect the majority of your readership can directly relate to the experience you describe. In their world, it seems that ‘loyalty’ is a word only to be found in marketing theory.
Rather than being something to think about, I suggest the importance of client loyalty and retention strategies are something to recognise and take action on in our own businesses, whether employee or employer. If you think you’re doing it well, do it better. If you’re not doing it at all then now is the best time to start.
[Steps off soapbox. Starts working on what he just said!]
I like your soapbox better than mine Ian . . . you raise some wonderful points!
Thank you for taking the time to stop by and contribute!
This is so typical in my industry. Customers have figured it out and ask the same questions raised here. Why punish your existing customers by charging a list price uplift on items purchased after the initial install?
Paul,
We have a competitor that’s known for this. They take an account for granted with shoddy customer service, poor quality, the works. When the contract expires and the customer is fed up and ready to pull the account, they swoop in, slash their pricing and severely undercut all competition – which they’re able to do because they’ve been gouging this account for years. You would think savvy buyers would be able to see through this, but unfortunately the pricing game often clouds their better judgment.
This is a really frustrating situation to be in from the sales rep’s perspective because like you said” You would think savvy buyers would be able to see through this, but unfortunately the pricing game often clouds their better judgment.”
I’m all about forgiving but feel very strongly against a client having to leave or threaten leaving to get a good deal.
Thanks for stopping by Ms Granger 🙂
Right on Dude.
🙂
Agreed . . . Thanks for taking the time to stop by and comment!
EXACTLY! I hate this way of doing business. We have Charter. The same thing happened…lure you in with decent rates and good service. After the honeymoon is over – BAM! The rates go through the roof and customer service becomes a pathetic oxymoron. We had one very nice person to our office to try to figure out why the internet went down for 3 days every time it rained (this after having several others who thought we were nuts). We commented on how pissed we were with the price escalation. He told us to call to say we were canceling and they would negotiate a good rate with us. Somehow this seems like blackmailing to us, but from what I hear, the competition does the same thing. Thank you for the blog and for letting me vent.
Yeah, been there, done that. That’s exactly how I put it – “you are punishing your loyal customers by not allowing them to take advantage of the offers presented to complete strangers”.
BTW, that is NEVER done at either of my two companies.
I have recently had almost the same exact discussion with my cable company. And what is insane is that rather than keeping an existing customer, they would rather see me leave (and I am).
This speaks to a greater issue – the impact of poor customer service and its alignment to a company’s goals. We all know it costs more to acquire a new customer than it does to service an existing customer. But yet, customer service would rather see an existing customer leave rather than see what they can do to keep that existing customer and satisfy them.
We also cannot underscore the impact of social media. Because of its reach and because we as consumers are using it more and more to determine with whom we want to do business, businesses need to be more attuned and reactive.
Hey Paul,
I just don’t get it!!?? This attitude is rampant in the monopoly-ish Telecom/Cable industries. They’re all about “churn rate” not client satisfaction. So some suit looks at the monthly churn report and the edict goes out the the “Client Retention Department” to do something about it – after the fact…And they can get away with it because these telcos just trade customers back & forth. We don’t have other options to their services. Unfortunately…Marie
Same thing with the cell phone companies, too! You get great deals on all the newest, latest and greatest when you aren’t a customer..but a current, loyal customer always pays more for the same thing. Makes you wonder!! Maybe we should send them all a copy of this blog post? LOL. Great stuff as always, Paul!
Paul,
It happens all the time. Sadly, most sales organizations place more emphasis on getting new business than on keeping the business you have. I think some of that has to do with sales quotas and budgets. Sales people are rewarded for bringing on new customers and often, the legacy customers are taken away and given to an inside CSR who really does not care.
All in the name of reporting a certain number to the boss. My last employer had the same attitude and they were a B 2 B service provider.
Cheers bud.
Marc
Wasn’t there a series of commercials mocking this attitude? An old dude gives a girl a bike to play with, but only for five seconds. Then he gives it to a new girl, saying she’s a new customer, so she gets the nice bike now. The former girl gets a rock to play with. (Something like that.) I’m all for special offers to entice new sales, but I also find it maddening that in order to get a good deal as a loyal customer, I have to either threaten to leave or actually leave the service.
One minute they love you the next it’s over. Today I cancelled a car insurance and complimented the gent on his service. “Gary” said he didn’t hear that often. Within 5 minutes I was called by another department requesting the details in writing or face a penalty. I would have gone back to them next week. Poor Gary.
Dude, this is a great article. As a Professional Knowledge Firm, we too hurt our customers unknowingly. Not freakin’ cool, dude. We gotta change.
Agreed . . . Thanks for taking the time to stop by and comment! I really appreciate it!