Disrespecting Customers Is the Fastest Way to Lose Them
By Peter Lyle DeHaan, PhD
Though not as frequent as our biennial cell phone migration from one carrier to another, my family and I have all too often found ourselves forced to change entertainment providers due to escalating charges.
These companies have the same mentality as the phone carriers. They offer attractive incentives to gain new business and then jack up the rates, forcing customers to seek low-cost alternatives from their competition.
For several years we enjoyed bundled internet and television service from one provider. They offered attractive pricing for both services, which we were happy to pay.
Committing to two years with them, they committed to two years of no price increases. After our 24-month contract ended, we continued with them on a month-to-month basis.
Then the price increases began.
Escalating Rates
They first increased their fees on our television package. Every six months or so they raised prices to provide us with the same level of entertainment. Each time my wife would see what she could do to lower our bill.
Sometimes this required another commitment and other times we needed to scale back our options. Even then, the net result was often a price increase. And every time she did this required multiple phone calls and too much wasted time.
Though not as aggressive, they also inched up the rate for internet access. Over time they increased our bill 50 percent. Yet, as the only choice for a stable, high-speed connection, we had to accept it.
This wasn’t the case with entertainment. We had options. At the point when our television package nearly tripled from the original amount, and even after scaling back the number of channels, my wife had enough. She was ready to switch.
Several companies offered more for less. Our new entertainment provider charged 20 percent less than our initial bill from our existing provider. As a bonus, the new provider offered more channels, superior recording options, and better technology.
Their Best Wasn’t Good Enough
Before we switched, however, my wife made a final plea to our existing provider. She begged them for their best deal. They refused to budge. They didn’t seem to care about customer churn.
She even told them what both they and we knew would happen. “Once we cancel, you’ll offer us a great deal to come back. Can’t you just give us that deal now?”
“No. You’re already getting the best deal we can offer to an existing customer.”
She canceled service, and we switched entertainment providers. The side effect was that, without being bundled, our internet access rate went up. Even so, we still saved money. And we loved the service from our new entertainment provider.
The Marketing Onslaught
As expected, our internet service provider began trying to get us to return and buy our entertainment package from them too. Several years later, they’re still trying.
They are most aggressive. Each month they mail us at least two promotions to entice us to return. They also include a one-page ad in each invoice. In addition, they send several emails each month.
Though it shouldn’t be a surprise, the deal they offer has the same rates we had when we first signed up several years before. But we can only get it now because of customer churn.
More recently, they’ve given up offering to bundle internet and entertainment. Now they’re offering to bundle internet and cell phones.
The email frequency has increased, too. It seems like I get something at least once a week. I now no longer even glance at their messages and just delete them. This means that if they send me a truly important email, I’ll never read it.
In addition, each marketing initiative serves as a painful reminder of how poorly they treated me as a customer. Why would I want to buy more services from them and repeat the process?
Marketing Management Success Tip
If customer churn is part of your business, strive to reverse the trend. Empower your staff to keep existing customers instead of trying to win them back once you’ve chased them away.
Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Living, Sticky Customer Service, Sticky Sales and Marketing, and Sticky Leadership and Management featuring his compelling story-driven insights and tips.
Peter Lyle DeHaan is an entrepreneur and businessman who has managed, owned, and started multiple businesses over his career. Common themes at every turn have included customer service, sales and marketing, and leadership and management.
He shares his lifetime of business experience and personal insights through his books to encourage, inspire, and occasionally entertain.