New Customers Shouldn't be the Only Ones to Get Special Pricing
I enjoy having my cable TV, Internet and phone service through one provider. The company made a sweet offer for me to switch to them, and I did. So, they bought my business with a promise of good service at a special price. After a year, the deal went away. The new monthly bill arrived in my mailbox, and it was higher than the last one. But, that was okay. I expected it, and remembered that the price I was paying was an introductory promotion, and it was just for a year.
Then one day I opened my mail to find an advertisement from the company featuring a similar pricing promotion. I looked over the ad, and it didn't claim it was for new customers. So, I called their special number to take advantage of the offer. The customer service representative, who was very nice, said that if I switched to doing business with them that I could get this great deal for the next year. However, I didn't need to switch. I was already a customer. When I told the customer service rep he responded by telling me, "Sorry, this is only for new customers." This was not the answer I wanted to hear. I asked why they mailed the promotion to me. He didn't know. Bottom line was that they only did it for new customers. I asked if I could terminate my agreement and start over. Apparently that wasn't a doable idea either.
Here's my take, and it starts with an important question: Why do companies create great promotional pricing for their new customers, but not take care of their loyal customers?
I know, this is marketing and sales, but it's not a good deal. And, here's another question: If I'm loyal, shouldn't I be treated at least the same, if not even better, than someone who has never done business with the company before?
There is a solution. I agree that we sometimes need to create incentives for newer customers. However, why not offer something of value to the existing customer. The company bought our good will with a discount. Why not renew our good will with some type of promotion?
I would love to receive a letter or email stating, "We've made a new introductory offer to our new customers, and thought it would be nice to give our existing customers a discount on their next bill, as a way of thanking you for your loyalty."
Not long ago one of my clients came to my office with a problem. He was thinking of lowering his price to his existing customers because he was running a seasonal promotion and offering a lower price to new customers. There's that special "introductory price" promotion again. I appreciated his moral and ethical way of thinking. In our conversation I offered the following solution:
Lowering the price to existing and happy customers can end up eroding revenue for a longer period of time. The idea of an introductory offer is just one time. So for his existing customers (read that as loyal customers), he could offer a one-time discount, perhaps for renewing early or paying in advance. That way his loyal customers get to participate in some type of special offer and won't be upset if they hear about the special introductory price promotion.
To get loyalty from your customers, you must also be loyal to them. The concept of showing some love to your existing customers while trying to court new ones (with incentives) is just one way of showing that you have their interests in mind.
Copyright ©2012, Shep Hyken