Has this ever happened to you?
You have subscribed to a cable or satellite or mobile service, and you spot an ad offering what you’re watching or using for 40% off … for new subscribers, only. Or an offer for upgraded speeds or new channels … also for new subscribers, only.
You then go online or call your provider, usually after waiting on hold for a long time “because your call is important to us”, and learn that you’re basically stuck. These new offers don’t apply to you, your subscription is locked in, and it’s a come-on for new customers.
You ask “If I canceled my contract can I then get this smoking hot new deal?” and you find out that even that avenue is closed to you.
And if you threaten to cancel anyway, and to go the nearest competitor (which you freely share by name), you get one of two responses: (1) “Sorry, Charlie, but you can’t leave us without a big penalty” or, after battling with the “retention team” for 30 minutes (2) “OK, we’ll give you the new channel or higher speed at your current rate.”
Why is it so hard? Don’t we all know that it’s a lot more expensive to get a new customer than to treat current customers well (or, as my UK colleague Peter Massey calls it, TCF = Treat Customers Fairly)?
In the past year since the release of our latest book Your Customer Rules! Delivering the Me2B Experiences That Today’s Customers Demand 1, I have shared its 7 Customer Needs, 39 Sub-Needs, and 4 Foundations with audiences all over the world.
Probably the favorite Sub-Need is “You treat me like a new customer all the time”. Its “failure statement” tells you why this bugs so many of us: “You treat me as a commodity once I’m on board, and only give the best deals to attract new customers.” In the book we lament this all too common business practice, accelerated by the proliferation of “promotions” and “special deals”, almost always focused on landing new accounts.
One of my clients had fallen into this vicious cycle, and its CFO joined us for one of our review meetings. When I recommended that they follow what later became this Sub-Need, and offer the new deals first to existing subscribers before they discovered them and went through the steps I outlined above, he was aghast! He told us “Do you know how much booked and forecasted revenues I would have to write down to do that? It’s a crazy idea, especially since we have them until the end of their contract.”
Stare at those two sentences a bit, and ask yourself how this would affect your “relationship” with this company.
Not too happy, right? Well, let’s see how the Me2B Leaders address this challenge and wind up enjoying much greater customer loyalty and lower operating costs (fewer customers winding up in the retention queues). Interestingly, few of these Me2B Leaders hew to an ROI formula to guide their actions; instead, they simply know that it’s the right thing to do!
- Monitor customer usage of plans and programs, and if the customer isn’t using the plan or program any more take it off of their contract, credit them for 2-3 months as a good gesture, and then notify them that you’ve taken care of them.
- Align marketing’s upcoming promotions or deals with customer service operations, and offer the new stuff to current customers first, before the deals are announced, starting with your “best customers”.
- Send thank-you notes to your customers at random times during their subscription, as UnitedHealthcare is doing.
- Suggest tips to use your services more fully, or use less of your services (another Me2B Sub-Need), without trying to sell them something else.
The reactions from your customers for these four moves will be uniformly positive, producing the desirable expression “You treat me like a new customer all the time”.
And there are two other Me2B Leader actions related to this that you might want to consider:
- Reducing or doing away with promotions or special deals, like Walmart’s “Everyday low price” guarantee.
- Scrapping subscriptions and lock-ins altogether, as T-Mobile USA has done brilliantly with it’s “Uncarrier program”.
For starters, mine your customer calls and social media for the failure statement “You treat me as a commodity once I’m on board, and only give the best deals to attract new customers”, and for the positive statement “You treat me like a new customer all the time.” Poll your customer service teams for their reactions and experience. Experiment with one or more of the actions I’ve proposed.
So what happened to that CFO who pushed back so strongly? Turns out that he’s come around 180 degrees and supported marketing and customer service proposals to offer the new deals to current customers and, if needed, write down subscription revenues. Seems to have improved their JD Power and other ratings, and earnings are even better. A win-win all around!
1. Your Customer Rules! Delivering the Me2B Experiences That Today’s Customers Demand (Wiley 2015). Here are the 7 Customer Needs that lead to a winning Me2B culture, breaking down into 39 sub-needs:
- “You know me, you remember me”
- “You give me choices”
- “You make it easy for me”
- “You value me”
- “You trust me”
- “You surprise me with stuff that I can’t imagine”
- “You help me better, you help me do more”