Dot.Coms and the Casanova Complex


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The legend of 18th century Italian adventurer, Giovanni Giacomo Casanova has only grown over time. Born in Venice, and a soldier in the Venetian army, a preacher, a secretary, an alchemist, a gambler, a violinist, a lottery director, a spy, and a member of Louis XV’s court in France, he is, nonetheless, best known for his many female ‘conquests’, including the Marquise de Pompadour.

Not so very different from Casanova, many companies devote considerably more energy and resources to winning or capturing customers than they do on keeping them. The term ‘conquest’ is a frequently used term for new customers, especially among automotive retailers. Consultant and author Robert Tucker has stated, “Companies are often so concerned about attracting new customers that they denigrate their unique value proposition to loyal customers.” They focus instead on chasing down the next sale, competing on price, and compensating employees more for winning new accounts than for keeping existing customers happy and loyal.

Too often, companies perpetuate the Casanova Complex and drive it through their organizations by compensating salespeople, and sometimes other staff, on the new customers they bring in, rather than on the customers they keep and build. In one example of this incentive compensation approach taken to an illogical extreme, a protection service company rewarded its top annual producers of new customers with free trips to luxurious resort locations. These people were feted and presented with plaques of achievement at a special awards dinner. Most of these salespeople revealed, however, that many of their customers left one year and returned the next, demonstrating little loyalty and only coming back when the salesperson offered some small additional element of value. On the company’s books, these reclaimed accounts were shown as new. Thus, the salespeople, desirous of free trips, had learned to beat the company’s new customer compensation system and use it to their advantage.

Other companies are like Casanova to their customers because they put significant effort into courting the prospect, dramatically welcome the new customer once converted, and then all but forget about them. These companies are either overconfident in their ability to provide value, or misguided that they need do no more than minimally follow-up or reactively problem-solve.

Also, in all the haste to bring in customers, companies can often forget to court the right, customers, those who represent the best long-term revenue potential, or who won’t overtax the company’s customer service and support structure.

If offline instances of the Casanova Complex are a disease, then it is an epidemic among Internet companies. Each day, a new Internet company utilizes a customer generation model that is more aggressive than any of its predecessors. The online loyalty point and prize schemes attempt to lure, and keep, customers with this form of promotion, for themselves and the sites they represent. One company uses a form of on-line currency, but all these schemes to acquire customers and learn about them provide little compensation for time invested by surfers.

Many online retail sites have engaged in sweepstakes programs. Their objectives, they say, are to create “viral” promotions which create excitement for their sites and build their databases of available names both inexpensively and quickly. The big issue for any of these sites is – do these promotions and schemes draw attractive customers, who can then be cultivated over time through the various marketing tools available today? And, once these customers are on board, are companies doing enough of the right things to keep them? Or, is this another extrapolation of the Casanova Complex?

One American Internet consultant, looking at this trend, said : “The best analogy is a trade show. If I give away ice cream, I can get every business card in the place. The question is whether they are cards from qualified prospects.” Despite the attractiveness of generating many new names for little cash outlay, sites sponsoring these sweepstakes are also concerned. As one site marketing executive said: “This is a great low-cost way for us to acquire new names. The jury’s still out on how many of those new people will come back.” Companies involved in developing or using promotional tools like sweepstakes seem inclined, though, at least for the moment, to believe that these possibilities generally don’t apply to them.

The cold reality is that all the power is in the customer’s hands, and competitors are only two clicks away from any customer at any time. Even the time-consuming requirements of identifying alternative suppliers and visiting them has been dramatically compressed on the web. One Internet research company found that only 12% of the reasons customers revisit sites and repurchase from them are attributable to loyalty currencies and incentives, so, like it or not, sites must concentrate on creating a full spectrum of visitor and customer value if they hope to drive loyalty.

For traditional off-line companies, the Internet may be ‘commoditizing’ their industry or undermining customer relationships. Talk to many brick and mortar CEO’s and they’ll tell you a key corporate goal is to transition more of their offline customers to online usage. Why? Because an on-line transaction costs dramatically less than a brick and mortar transaction, there is less risk for service error, and the company can more effectively capture and leverage information from an online transaction, to cite a few advantages. Certainly, the transactional advantages of e-commerce are very appealing. But what about the effects on loyalty, especially for new customers?

There’s a great deal of evidence to suggest that many online-only companies, and traditional companies with on-line presence as well, are failing to create loyalty for these visitors and new customers. We’ve seen disturbing statistics on the rapidity of online customer attrition and turnover. One major study of Internet customer and site loyalty showed that many e-commerce sites turn over sixty percent of their customers every six weeks. Other research showed that only one-quarter of the sites do anything to recognize multi-purchase or repeat buyers. Worse still, this research found that under twenty percent of the sites send follow-on offers to customers who’d purchased within the last thirty days; and, of those, almost none of the follow-on offers were personalized.

One of the important ways both online and offline companies can discipline themselves to avoid the Casonova Complex is to apply personalization in all contact with customers, both new and established. This, at least, gives companies a better chance of establishing a value relationship with these customers. While it’s been estimated that over eighty percent of e-commerce sites have customer and visitor e-mail personalization capabilities, only four percent of the sites used personalization in follow-on marketing campaigns. For web sites favoring incentive devices like sweepstakes to attract potential customers, personalized communication is the perhaps the best opportunity to demonstrate ongoing interest in customers, especially new ones. Personalization is at the heart of the ‘relationship’ in successful online customer experience programs.

A marketing consultant, commenting on the growth of on-line rewards programs in the U.S. and U.K., concluded, “What is obvious is that, despite their best intentions, without serious innovation and movement into other related areas (such as direct and relationship marketing), the long-term prospects of basic ‘points for prizes’ offerings does not look good.” For sites to attract and keep the customers they want, unlike Giovanni Casanova, they will have to do more and be more. Personalization is a start.

Michael Lowenstein, PhD CMC
Michael Lowenstein, PhD CMC, specializes in customer and employee experience research/strategy consulting, and brand, customer, and employee commitment and advocacy behavior research, consulting, and training. He has authored seven stakeholder-centric strategy books and 400+ articles, white papers and blogs. In 2018, he was named to CustomerThink's Hall of Fame.