#1 Posted: 22 Jun 2012 08:33
Like many people, I pay for my cable TV, phone and Internet service through one company. It's a deal called "bundling" and generally saves the customer money. I signed up for the service when the company offered me an incentive to switch that was quite a bit less than what I was paying elsewhere. Unfortunately, the "special deal" ended after a year, and I started receiving bills at the company's regular rates.
One day, however, I received an offer in the mail with a promotion offering a special price plan similar to the incentive plan I received when I signed on with the company. I called to get in on the new deal, and the customer service representative told me that it was a one-year promotion if I would switch to their service. I told him I didn't need to switch, because I was already a customer. I was then informed that the offer was only for new customers. When I asked why the advertisement was mailed to me, he couldn't answer, but the bottom line was that as a current customer, I did not qualify for the promotion. I even offered to end my service and start again as a new customer. That was not something the company was willing to do.
This way of doing business is baffling to me. How can a company justify offering promotions and special prices to new customers at the expense of their current, loyal customers? I understand that the marketing and sales departments have to find new customers, but someone in the company needs to rethink this plan. New customers are great, but loyal customers deserve at least equal treatment — if not better!
I don't dispute the importance of special promotions to attract new customers. It's a necessity in business. But, once you have secured the customers, continue to let them know they are appreciated. Come up with a plan to make existing customers feel special, too. They were originally sold on discounted pricing — perhaps offer a special renewal plan or other deal?
Imagine the gratitude an existing customer would feel if he received a letter or email such as, "We've made a special introductory offer to new customers, and we want to show our appreciation for our loyal customers as well. You will find a discount on your next bill. It's our way of saying thank you for being such a great customer."
A business-owner friend of mine faced a similar situation, and he asked my advice. He was planning a seasonal promotion to attract new customers by offering a lower price, and wondered if he should lower his loyal customers' rates as well. While it would be an honorable way to conduct business, in the long run it would negatively affect his revenue.
I suggested that in light of the introductory offer for new customers, a limited promotion, that he give his loyal customers a one-time discount, perhaps tied in with an early renewal or advance payment. This would reward the existing customers for their loyalty, and ensure their continued goodwill if they should hear of the special deal for new customers.
To earn customers' loyalty, you must be loyal in return. Don't neglect your existing customers in the quest for new ones. If you are offering incentives, make sure to keep all your customers' interests in mind.