I changed internet service providers this month and, while I was at it and since it was the same company, also cancelled my cable television service. It’s not something I did on a whim. I have been dissatisfied with the quality of the internet service I was receiving, and have long despaired of my provider’s customer service.
But that’s not why I switched. I’ve never been tempted to move from one ISP to another because, short-term promotional offers aside, the two major alternatives in my neck of the woods offered pretty much the same quality of service for pretty much the same price. And neither is any great shakes when it comes to customer service.
However, I recently learned of a local, independent service provider that offered far faster service for a lower price. Like in many other households, watching television for our family these days is much more a matter of streaming content from both paid and free sources on the web, and twice now I have bumped into the what once seemed to be a rather generous bandwidth cap with my current provider. In addition to the much higher speeds and lower cost, the cap with my new provider is more than three times higher.
The coincidence of having access to more and better streaming-content sources plus the launch of over-the-air high-definition television channels also led me to cut the cable in favour of IPTV and an OTA antenna. This was something I had been meaning to do for a while but simply hadn’t got around to. (See inertia, below.)
I knew when I called my ISP and cable company to cancel the services that they would offer me some rich inducement to stay. Fortunately, they didn’t harass me too much, and we got the transaction completed. A week or so later, I received an even-more-generous offer in the mail — a steep discount on my monthly subscription charges for the next year plus a rather hefty gift card if I changed my mind.
Here’s the thing: Why did it have to take my telling them I was cancelling before they offered me some sort of incentive to stay? Why did they wait until I had filed for divorce before telling me how much they loved me and how willing they were to change the things that bugged me?
It reminded me of a similar experience with a credit card provider. I was an American Express card holder for about 15 years. I valued the no-limit approach that allowed me to run up steep monthly sums when travelling — I once charged more than $30,000 to my Amex card when I was the last company representative left at a huge client function we had organised and the venue unexpectedly presented the bill — and I loved the rewards program Amex had. I chaffed a bit at the relatively high cost of the card and wished it was more universally accepted. When Amex bumped up their fees and slashed their rewards program, I switched. And then spent the next year or two fielding calls begging me to come back with offers of lower fees and a return to the more robust rewards program.
All the data in the world tells us that it costs a lot more to acquire a new customer than to retain an existing one. Large companies know that inertia is their friend — it is simply so inconvenient to switch, especially with a commodity or utility product like a credit card or communications service — that customers will put up with a lot before bailing. And so these companies lavish all their attention and affection on wooing new customers while largely ignoring those they already have.
It’s a bad approach.
Lavish your existing customers with love. Occasionally offer them something akin to the promotional offers you make to lure new customers. And I don’t mean having third-party sales agencies call them up and, in the guise of “making sure you’re getting all the savings you’re entitled to,” try to up-sell them into new service packages. (Yes, Rogers; I’m looking right at you!) Recognise who your best customers are — like airlines do with their frequent-flyer programs — and make things a bit more special for them.
Don’t wait until your customers have already packed their bags to tell them how much you wish they’d stay.
Francis Moran and Associates is an associated team of seasoned practitioners of a number of different marketing disciplines, all of whom share a passion for technology and a proven record of driving revenue growth in markets across the globe. We work with B2B technology companies of all sizes and at every life stage and can engage as individuals or as a full team to provide quick counsel, a complete marketing strategy or the ongoing hands-on input of a virtual chief marketing officer.