I don’t get it. Who was the greedy, short-sighted marketer who came up with the idea to reward new customers but refuse to pass the same (or better) rewards on to loyal customers?
Cable companies, credit cards, cell phone providers, domain registrars, alarm systems, and more have all forgotten a fundamental rule in business: it’s cheaper to keep a customer than it is to get a new one.
They’re great at offering sweet deals to get us in the door, get us to buy their monthly subscription with free hardware, free installation, and lock us into an introductory rate for a certain period of time. Gotta love it…but what happens when the rate expires?
The negotiated rate we had locked into for our cable company expired and our bill jumped $80! I about died when I opened it up, wondering what the mix-up was.
When I called about it, I got the scripted response that my plan had expired. I was able to bring it down slightly but not as low as I had it, after I suggested that I was going to take my business elsewhere. Adding insult to injury, I had to suffer through the numerous attempts to up-sell me on more channels and bigger packages even after I told the customer service rep I had no desire to add services.
Needless to say the experience left me frustrated and feeling used. I was fuming even more-so when I opened up my mail the next day with an even lower offer than I was paying (for new customers only.)
Apparently 10+ years as a loyal customer doesn’t make me worthy of a deal.
How about this for a smarter business model:
Reward customers with better rates the longer they remain loyal! There’s no better advertising than word of mouth from a trusted friend, but companies forget that word of mouth advertising works both to their advantage as well as their disadvantage.
If my cable company had been remarkable and given me a great rate without a lot of hassle, I probably would have shared it with our new neighbors. Instead, we told our new neighbors that we’re looking into online alternatives and planning to drop our cable company all together.
What are your thoughts about companies that offer introductory rates for new customers only? Have you been burned? Raise your voice in the comments below and let us know your thoughts!