Categories
Call Center

The Failure of New Customer Discounts

Companies Focus on New Customer Acquisition and Then Encourage Customers to Leave in Two Years

By Peter Lyle DeHaan, PhD

My family just completed our biennial cell phone switch. We’ve been doing this like clockwork for two decades. We pick the company that offers the best price and switch to that one. Two years later our rates jump, and no amount of pleading results in a package we can accept. So we switch carriers.

Author Peter Lyle DeHaan

Of course, the same thing happens with our internet service provider and our cable TV/satellite provider. They also entice us with low introductory rates and then methodically jack up our bill every chance they get. We’re on a two-year cycle with them too.

Loyalty Goes Both Ways

I’d prefer to find a vendor I can stick with and not change every two years. All they need to do to earn my loyalty is to offer fair prices. But they don’t. They give sweet deals to new customers as they gouge their current ones. They apparently value new business more than existing business.

Don’t they know it costs several times more to gain new customers than to simply keep the ones they have? They should, but their actions don’t show it.

They prove their disloyalty to me with their unfair pricing. This causes me to be disloyal to them, and I have no regret about leaving them for a better deal. They’ve trained me to act this way.

The Burden on Customer Service Staff

Each time we switch a provider, we make multiple calls and even visits to each potential vendor, gathering information and looking for potential shortfalls in their service package. Of course, we foolishly start with our existing provider, but they’re not interested in keeping our business—at least not yet.

As we proceed, we take time with our existing provider and then all their competitors, including the one we eventually select. Our existing provider spends time with us to lose our business. Our new provider spends a couple of hours to close the deal and transfer our account. That’s a huge investment of time to obtain an account they won’t keep. In addition, all the other providers waste time with a prospect they won’t land.

The Impact on Customers

As customers, we spend a lot of time analyzing our options. Then we expend more time switching providers. But the biggest investment of our time is programming and learning our new technology, be it our phones, video entertainment, or internet access. Maybe someday I will gladly accept my bill doubling to avoid the agony of switching. Or maybe not.

Churning Customers Is a Futile Business Model

If companies worked harder to keep the customers they have, there wouldn’t be so much pressure to gain new ones. They wouldn’t have to offer their new-customer incentives, which are likely at or below cost. They wouldn’t have to spend as much money on marketing. And their sales and customer service people could avoid a lot a of needless effort that produces no results.

Too Late to Make a Difference

Most of the time, once we switch providers, our former provider then makes a last-ditch effort to “win back” our business. But they’re too late. We’ve just gone through the agony of considering our options and doing a thorough spreadsheet analysis. We’ve gone through the pain of switching.

We have shiny new equipment, which looks promising—once we learn how to use it. And now they think they can keep our business? No way. The only way we’ll do business with them is in two, four, or six years as we go through another cycle of selecting a new provider.

Though these service providers will persist in their insane cycle of customer acquisition and churn, your company doesn’t have to. Make sure you don’t follow their foolish example.

Read more in Peter’s Sticky Series books: Sticky Leadership and Management, Sticky Sales and Marketing, and Sticky Customer Service featuring his compelling story-driven insights and tips.

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry. Read his latest book, Healthcare Call Center Essentials.

Categories
Business

The Side Effects of Coupons

By Peter Lyle DeHaan, PhD

A couple of years ago my preferred office supply store embarked on a creative strategy to sell me more stuff. And it worked—for a while.

They started emailing me coupons that offered nice discountsif I spent about 50% more than what had been my typical historical purchase. Not wanting to pass up a good deal, I used their coupons, buying what I needed now and stocking up for the future.

If anyone were tracking the results of their marketing efforts on me, they would have been pleased; there was at least a 50 percent boost in my spending with them, likely more.

The problem was that my growing stock of office supplies would already cover me for the next several years. Aside from ink cartridges and batteries, I’m nicely provisioned.

I had enough printer paper, file folders, highlighters, paperclips, staplers, rubber bands, pens, and what not to last me a good long time. In fact, I don’t think I would needed to buy file folders or paperclips for the rest of my life.

So, after enticing me to increase my purchasing for a couple years, they were paying the price of that short-term gain. I was buying next to nothing.

When I received my $15 reward certificate, I had trouble finding anything I neededeven though it would be free! Of course, that just further forestalled me from actually buying something from them.

If you multiply my experience by the thousands of others who received similar coupon promotions, I suspect that corporate was scratching their collective heads over what happened; it wouldn’t surprise me if careers where made and lost over this whole ordeal.

The lesson to be learned is that a coupon today could result in a no-sale tomorrow.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Business

Opt-in Email Marketing: Proceed with Caution

Use Opt-in Email Marketing With Care

By Peter Lyle DeHaan, PhD

Years ago, two companies that I “opted in” to receive messages did it wrong—so I voted with the cancel link and opted out.

I had happily bought from both and eagerly accepted their requests to opt-in to receive promotional emails. I don’t know how often they were sending messages, but it seemed like a reasonable amount.  If I were to guess, I would say it was once or twice a month.

When Christmas season approached, there was a definite increase in frequency to about once a week. Still, that was okay. One sent a coupon for a 20% discount and the other an offer for free shipping. Using these promotions, I placed orders with each. I was pleased with the results.

As Christmas approached, the flow of messages increased even more, as did the urgency to act. I assumed I would need to tolerate their push for Christmas sales until after December 25th, when things would return to normal.

Things didn’t go back to normal. Soon I was receiving a message every day from both companies. When my irritation hit my breaking point, I opted out. Relief at last.

I would likely have ordered from both in the future, but it might have been months. Enduring an email message everyday, just so I might have a valuable discount in six months is not worth the frustration. Unfortunately for them, they are now off my radar screen, so if a competitor shows up at the right time, I could end up buying from them instead.

I’m sure that each time these companies sent out an email blast, they were rewarded with orders. However, if many otherwise-satisfied customers reacted as I did, the cost of these short-term sales will be a long-term loss of customers.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Business

When Customer Rewards Programs Go Bad

By Peter Lyle DeHaan, PhD

Ten years ago, I have signed up for the “rewards” program at my favorite office supply store. In addition to mailing me coupons and emailing me special offers (which is how I bought a paper shredder for $10), they also keep track of my purchases, which allows me to earn quarterly discounts.

Conceptually, this is a great business idea. It promotes store/brand loyalty and gives me an incentive to not consider their competition.

When I was emailed my recent statement of activity, I actually looked at it. I wanted to make sure that the recent ink cartridges that I returned for recycling had been credited to my account.

They had not. Nor was the purchase that I made that day. Looking through each statement for this year, they had a record of only one purchase.

Why do they scan my card? Since charges don’t end up in my statement, scanning it seems to be largely an exercise in futility.

It makes me wonder if their competitor—whose store is right across the street from them—has a rewards program that works better and could actually capture all my purchases.

I’m sure that it’s not the goal of their rewards program is to drive customers to their competition, but that could very well be what happens.

Sadly, their rewards program has gone bad—and as a result, this customer could go away.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Call Center

A Disconnect Between Marketing and Technology

By Peter Lyle DeHaan, PhD

I was a loyal customer of a national office supply chain (they’ll remain nameless to protect their otherwise good image). I was a preferred customer, which entitles me to special discounts and occasional rewards (on those rare quarters when I buy “enough” product.) They also send me an email, seemingly weekly, of sales and special offers.

Ten years ago,  I scanned their latest missive and noticed deals on paper shredders. I’ve been using a light-duty model for years and it’s showing its age as it groans through the documents I feed it. I figured that when it shredded its last page, I would replace it with a heavy-duty model.

Incredibly, they were offering an “on-line only” price of $10 for a light-duty model, similar to, but better than my old faithful.  At $10, there was little to lose; the super-deluxe model could wait.

I went to their website to place my order. I entered my email address only to be informed that they had no record of it in their files.

How curious. They had just emailed me that morning; obviously, someone had a record of my email. Unfortunately, the marketing department and the IT (information technology) department were not operating from a common resource.

I was going to abort my order (one explanation why e-commerce shopping charts are abandoned). However, out of a sense of adventure, I forged on. I placed my order without logging in; at it’s conclusion I was asked to sign-up to receive email alerts. I entered my address and they happily took it.

There was an obvious disconnect between what Marketing was doing and IT’s ability to support them.  I wonder how many sales were lost as a result.

Read more in Peter’s Sticky Series books: Sticky Leadership and Management, Sticky Sales and Marketing, and Sticky Customer Service featuring his compelling story-driven insights and tips.

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry. Read his latest book, Healthcare Call Center Essentials.

Categories
Business

Beware the Survey Turned Sales Pitch

By Peter Lyle DeHaan, PhD

Several years ago, as I was mowing my lawn, a stranger pulled into my driveway. He approached with the determined look of a salesman. With no way to make myself scarce, I waited as he approached. He was taking a survey.

Suspicious that it was really a guise for a sales pitch, I hesitated, contemplating the most effective way of returning to my lawn-mowing mission. Finally I consented out of a sense of expedience.

His Question 1: “Do you think that right here today there is air pollution?”

My Answer: “Yes.”

Question 2: “Do you think the air in your house is better, worse, or the same as the air outside?”

Answer: “The same.” (Actually I recall hearing that it is usually worse, but I was taking a calculated middle ground.)

Question 3: “Do you and anyone in your family suffer from asthma or allergies?” 

Answer: “No.”  (Real answer: “Some allergies,” but I didn’t want to give Kevin too much encouragement.

Kevin said he would enter me into a drawing, asking for my name, my bride’s name, and my phone number. Knowing that all three pieces of information are readily available, I supplied them, but determined to provide no more.

Fortunately that was all he asked. I was now registered to be in a quarterly drawing for 1,000 gallons of gas and a daily drawing for two pizzas and eight movies passes.

Three hours later Meg called from “Southside” to tell me that my name had been drawn—imagine that. This was playing out as I suspected, so I went along. Kevin wanted to personally come out and give me my prize.

A time was set and then Meg said that Kevin would get a bonus if I listened to a brief sales presentation about Rainbow products. (Brief, by the way, is “35 minutes—depending on how many questions you ask.”)

Pretending to be unaware, I asked what Rainbow was and Meg hesitated, “Well it’s like cleaning the air with water.”

Unfortunately collecting my prize was contingent on spending 35 minutes will Kevin. Although pizzas and movies are very high on my list of preferred things, I suspected that even after enduring a 35-minute sales spiel, there would still be a catch, so I declined.

“Do you want me to give your prize to someone else?” Meg implored with feigned incredulity.

“Sure,” I responded, “go ahead.” I wasn’t any closer to my pizzas and movies—but at least I had enough info for my blog.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Business

Responding to Email

By Peter Lyle DeHaan, PhD

My website FindaCallCenter.com features a directory of call centers. All the information listed has been submitted by the businesses themselves. To ensure the information is current and accurate, I periodically email each call center, asking them to review and confirm their information.

The lack of response—and the slowness of response—to my recent verification effort was appalling. Only 25 percent responded to my first email message, while 11 percent of the addresses generated a failure notice.

The majority of those responding did so the first day, but many trickled in over the next week.

For the second email message to the remaining non-responders, 13 percent replied, but only one third did so within one day, with the rest taking up to five days. For the third and final email, only 5 percent responded.

Altogether, only 37 percent responded at all; 13 percent had non-working email addresses; 50 percent apparently received but did not bother to reply to any of the three messages. Furthermore, of the minority who responded, only about half did so on the same business day.

We live in a world that expects a response and wants it immediately. The above dismal results—which are likely applicable to all industries—suggests that merely responding to email on the same business day would make your organization stand out.

How sad. Few consumers will be patient that long. Stand out even more, and strive to respond within an hour—and the sooner the better.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Business

The Difference Between Good and Bad Marketing

By Peter Lyle DeHaan, PhD

Several years ago, I set up a Website for a local nonprofit organization that I helped. I registered three domain names for it: the main one, with two alternatives. The first ended with .org (as did one of the alternates). I also registered the .com version of their main domain name in case someone typed .com out of habit or error.  All three pointed to their website.

When the domains were up for renewal and I opted not to renew the one ending with .com. Keeping it seemed like unnecessary overkill.

Then the email solicitations started rolling in. Apparently, there are a number of companies that monitor expiring domain names for one of the potential value.

Upon seeing that the .com version was available and that I had already registered the .org counterpart, they thought that I might be interested in it, offering to help me buy the exact domain name that I had allowed to lapse.

They suggested that I allow them to help me snatch up this great domain name before someone else did, thereby pushing the cost up.

I have to respect their business model that monitored expiring domain names, identified owners of existing domain names with a different extension, and contacted registered the owners via email.

Yet why didn’t they take one more step to eliminate contacting the prior owners who had purposely let the domain name expire?

Given the relatively inexpensive nature of email, it’s not a big deal. However, I am much more an admirer of an elegant marketing campaign over a brute force one. After all, it is the marketers that cut corners and execute their craft badly that make it harder for everyone else to be respected and trusted.

Bad marketing might produce results, but it pulls the industry down. Good marketing produces better results and elevates the industry.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Business

What Does “New and Improved” Mean to You?

What Is Your First Thought?

By Peter Lyle DeHaan, PhD

Being the slightly cynical person that I am, my initial reaction is that someone is trying to dupe me with a marketing tactic. I suspect that nothing substantive has been changed, but lacking anything substantial to proclaim, they fall back on trumpeting that their product is “new and improved.”

It must be that some people are sucked into this ruse or else why would marketing folks persist in perpetuating such a ploy?

Therefore, I quickly dismiss all claims of “new and improved”—unless it is for a product that I use—then I panic. 

Although “new and improved” sometimes seems to only apply to the packaging, that phrase still produces fear and trepidation in me when referring to products that I use.

I worry that “new and improved” actually means “we’ve-changed-this-just-enough-so-that-you’ll-no-longer-like-it.” Unfortunately, personal experience backs up that concern as being a realistic one.

The logic behind “new and improved” probably assumes that existing users will continue to buy it—even if the packaging has changed so much that only the brand name is recognizable.

The bonus kicks in from people who never used it, but are predisposed to try anything new, as well as those who didn’t like it before, but will give it a fresh look. Therefore, I guess we are stuck with “new and improved” products.

Still, “new and improved” does nothing for me; I’ll take “tried and true” any day.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.

Categories
Business

How to Succeed at Email Marketing

Don’t Overlook or Dismiss This Proven and Stable Channel

By Peter Lyle DeHaan, PhD

Email marketing is a cost-effective and straightforward way to reach out to touch prospects. But just because it’s cheap and easy doesn’t mean it’s always the best idea. When done wrong, email marketing can alienate the audience you’re trying to cultivate.

Here are five tips for successful email marketing:

Author Peter Lyle DeHaan, PhD

Send Only Useful Messages

Several years ago, I had the grand idea of using an email-marketing program to inform and engage advertisers and potential advertisers for my magazines.

When I began working on the next issue, I emailed them with the theme and deadlines. A week before the due date, I sent a reminder. When the magazine went to print, I dashed off an update, and when it mailed, I let them know.

This lasted for two issues.

Although sending the messages seemed free, it cost me time. I also worried about becoming a nuisance. And in those early days of email marketing, I couldn’t tell who was reading what I sent.

I scaled back my messages to one per issue. That email let them know the theme and deadlines. It’s what mattered most. Besides, if I emailed less often, I hoped they’d be more apt to read what I did send.

Only send the messages that matter to your audience.

Segment Your Audience

I quickly fell into a rhythm of sending out one email as I prepared each issue, but it wasn’t as smooth as I hoped. It seemed that no matter how carefully I worded my message, someone would be confused. This resulted in more communication to clear up my miscommunication.

The problem was that I tried to make one email work for everyone: regular advertisers, occasional advertisers, and potential advertisers. A message for regular advertisers might confuse the occasional ones and vice versa.

Alternately, a message encouraging potential advertisers to run an ad might cause regular advertisers to make wrong assumptions about their status. To solve this, I divided my list into three groups and sent specific messages tailored to each audience.

Your biggest customer is different than your smallest, and both are different from your prospects. Segment your list appropriately.

Send Only Wanted Messages

As a result of inquiring about a product or service, I often end up on a company’s email list. I’m okay with them following up with me or sending more information—as long as it’s relevant. Just because I inquired about one thing, however, doesn’t mean I’m interested in everything they offer.

If they do this once, I’ll overlook it. If they do this twice, I’ll unsubscribe. Then they lost the ability to connect with me.

Allow Unsubscribes

Even though it’s a requirement to let people unsubscribe, I’m shocked at how many email marketers don’t. Plus, a few let you try to unsubscribe, but they don’t follow through.

Allow for and honor unsubscribes. It’s the right thing to do.

Don’t Spam

Though I have no firsthand experience in this regard, it’s easy to buy an email database. It’s also common for companies to harvest contact information and send you messages you don’t want. These messages are spam.

In your zeal to market, make sure you don’t spam your list or look like a spammer.

Marketing Management Success Tip

Send useful messages to your segmented list, allow for unsubscribes, and avoid spamming. This will put you ahead of most companies. Then provide the right amount of contact, and your email marketing is poised to succeed.

Read more in Peter Lyle DeHaan’s Sticky Series books, including Sticky Customer ServiceSticky 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.