A few weeks ago, I transitioned my pay TV and Internet services to a new provider and I canceled my landline telephone once and for all. When it comes to my former provider, I have had a number of issues with their service over the last several years, including interrupted service, equipment failure and most recently overbilling for services I did not have. Often their support model made it more difficult to resolve issues and in one case, I had an offshore based phone agent who was incredibly condescending in a service call. It often felt like the company was saying, “your loyalty is only worth so much to us.”
Source: Nandyphotos
For services such as pay TV, Internet, and wireless phone service, the most profitable customers are usually those who have the longest tenure. So, why did they not recognize that I had serious issues with the service and try to address my concerns before I terminated the service? In part this is driven by short-term thinking that causes companies to be focused on near-term costs rather than long term profitable customer relationships. Also, its likely that the organization is not doing a great job of identifying and addressing customer pain points. Some of these pain points may be regarded by the company as impossible to solve, but that doesn’t change the fact that the problem exists and could lead to customer churn.
So what did they do after I canceled my service? I have received a continuous stream of offers in the mail and through email expressing their sorrow at losing me as a customer and offering me large incentives to come back. So, before I left they weren’t willing to truly address my concerns or expend effort to better my experience, but now its worth a $250 incentive or more? What in the experience I had would cause me to consider going back?
Just this week, I was addressing an error that my bank made on one of my accounts. With the recent experience with my payTV and Internet provider fresh in my mind, I asked the banker what the bank has done for me over the past 17 years (all of it as a customer of one branch) that shows that they value the longevity of the relationship or gives me a reason why I should keep my accounts there. The banker looked at me and was a bit dumbfounded. She scrambled to think of an answer and asked me if I had signed up for their loyalty recognition program (I hadn’t). Of course this misses the point altogether. And, why should I have to sign up for the loyalty program?
The truth is that banking services, like many other industries have very little differentiation from one to the next when it comes to the core offerings. One difference is that my current bank knows a heck of a lot more about me than any other bank that I might switch to. So how have they used that knowledge to serve my unique needs? What services have they offered that have helped me maximize my personal financial success (and increased the size of my account with them)? The answer is zero. That said, if I leave, I am certain I will receive emails, letters and perhaps even a phone call asking me why I left and giving me incentives to come back.
The traditional approach to customer relationship management and driving loyalty isn’t working. Its time to create real relationships with customers. Companies should stop focusing on what they are doing to entice loyalty and start focusing on what they are doing to earn loyalty.
If companies are focused on earning loyalty, the rearview mirror will much more frequently look as good or better than initial expectations customers had when the relationship began.
