“Switch over and get 50 per cent off our regular fees and the second year free!”
You know the deals; you hear them all the time. Whether its phone services, internet providers, subscription newsletters or magazines, insurance, security systems, and a variety of other goods and services, it seems that some businesses want to offer deals to new customers that they refuse to offer to loyal clients.
Recently I negotiated a 75 per cent discount on a service that I receive to my house after I told the supplier that I believed I no longer needed it. I had been a customer of this company for 35 years and I felt that they had taken my loyalty for granted. In an effort to stop my departure they reduced my costs substantially and then came the pitch for additional services. Because I was ready to upgrade my internet services, I took their offer on a two-year contract. We settled on a price and everyone seemed happy.
Two hours later, the company was desperately calling and emailing me. It seems that they had made a mistake. They had bought out my service provider the previous month so I was already their customer and they couldn’t offer me any deals. Seems like they were prepared to offer substantial deals to strangers but not to friends.
We see these senseless practices all the time in business. Why would you treat an unknown new customer better than you treat a customer who has been loyal to you for years? Why is it that we think that these new customers are going to stick around after their contract expires?
Unfortunately, this type of thinking breeds discontent with loyal long-term customers. When your loyal customers feel neglected and mistreated compared to your new customers there is a level of discontent that breeds embitterment. I had someone this week tell me how upset they feel when they see this practice but are refused a similar deal after contacting their supplier.
Companies need to realize how embarrassing this is for staff who must deny these deals to loyal customers. Not only are they setting their employees up to respond to irate customers, but the customer now has to make a choice between staying with that company and looking elsewhere for a similar product or service.
A better way to handle business development is to create an environment where there is substantial value for new clients to do business with your firm while recognizing and rewarding loyalty. By being proactive with pricing and transparent with deals, trustworthy companies will not only adjust prices for short-dated products and services but offer new products, services and technologies to existing customers at rates similar to those they are offering to new prospects.
Service providers would gain much more respect offering their customers advantages months before their contracts expired instead of waiting until the last minute or by notifying them of beneficial newly obtained products.
Taking care of our customers can be a lot of work, however there are studies that show it costs five to ten times as much to bring a new customer up to speed than to take care of an existing one. Treating our loyal customers with honour and respect should include giving them proactive pricing and consideration for their dependable patronage. Failure to achieve this results in a dysfunctional business model necessitating a ceaseless search for new customers.
Dave Fuller, MBA, is an award-winning business coach and the author of the book Profit Yourself Healthy. Discontent or loyal follower? Email dave@profityourselfhealty.com
