Customers Rock!

A blog about customers, their experiences, and how businesses can make sure their customer experiences rock!

For New Customers Only?

Posted by Becky Carroll on May 18, 2007

happy-sad-faces.jpgWhy is it that all the best offers are only for new customers?  I am sure many of you could come up with examples of deals that look fantastic, only to find in the small print that the price is good if you are not already a customer with this company!  A quick Google search on the phrase “new customers only” turns up offers from mostly consumer utility companies (cable/satellite, mobile phone service, internet service, etc) and financial services companies, but there are many other examples out there.

Let’s look at this practice from an existing customer’s perspective.  

I see an offer from any organization where I have had my business for a long time (months or years).  I think, hey, this price is better than the price I am paying!  I want to get it.  I call or go online to adjust my plan and take advantage of the deal.  It is then I find out (if I didn’t read the fine print) that it is only for new customers.  How do I, a long-time customer, feel about this?  Here are some words that may come to mind: angry, cheated, not valued.  I may feel that you care more about getting new customers than you care about keeping me.  I don’t want to have to leave and go to a competitor in order to get the best deal!

Is it worthwhile for organizations to be so focused on using these offers to get new customers that we upset our existing customers?  Wouldn’t it be better to use some of that budget to keep our existing customers happy, grow them into bigger customers, and have them spread the word?

Kathy Sierra of Creating Passionate Users had a great post on this back in February.  She compared some companies to bad marriages in the way they treat their existing customers.  Her post discussed, both in words and in pictures, how customers feel before and after they start a relationship with some companies.  Check it out for a good laugh.  Some of those pictures are so true they almost aren’t funny!  I do like what Kathy said here:

Shouldn’t you treat the people you’re in a relationship with better than you treat anyone else? Shouldn’t you treat your existing customers better than the ones who’ve given you nothing?

Exactly!

What happens to a customer that is wooed by a “special introductory offer”?  Do they become long-term customers because they have their needs met by our products and services?  Or do they leave when the deal runs out in search of the next great thing?  Many customers who are attracted to these deals do just that.  Are they really the customers you want your business to attract?  Will your business grow in the long-term with those types of customers?

Here are some tips for organizations who want to grow their business by focusing on lengthening and strengthening relationships with their current customers.

  • Understand who your best customers are and what they need.  Make sure every company contact (including marketing and advertising) builds up the relationship with these bread and butter customers! 
  • Go out and see what you can do to make it easier for your best customers to do business with you.
  • Take what you have learned from your best customers and apply it to your other existing customers.  You may find that some of them “grow up” to be another best customer.
  • Consider how existing customers will view “introductory offers” to new customers.  Enlist their help by offering them something in return for bringing you those new customers themselves.

This is a win-win for both company and customer!  The more your company can prioritize growing your bottom line through your existing customers, either by expanding your business with them or through referrals, the more effective you can be with your marketing spend.  The more a customer feels they are rewarded for doing business with you, either by having their needs met or by bringing in new customers, they more passionate they will be about your brand.  Good feelings all around!

Reminder: If you have any questions for Jonathan Tisch and the blog book tour (I have received some good ones so far!), please email them to me (becky at petraconsultinggroup dot com) sometime over the weekend.  I co-host the Blog Book Tour this Monday!  Hope to see you there!

(Photo credit: wds2007)

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8 Responses to “For New Customers Only?”

  1. Alan Hume said

    Great Post! Comcast cable has been offering some really attractive rates to new customers. Why shouldn’t I be offered the same or lower after being a customer for ten years?

  2. Thanks, Alan! Those companies that start to recognize and act on this disparity will be able to differentiate themselves in no time flat. Those companies that continue to favor new customers will find they have a large turnover after those “great deals” are expired. Trust will also be a factor with their existing customers! Whose interests are they looking out for??

    Customers want to do business where they feel valued and recognized for the longevity of their relationship.

    I appreciate the comment!

  3. [...] и аз фийдовете си и попадам на този пост със заглавие For New Customers Only? Ето и първият параграф: Why is it that all the best offers are only for new [...]

  4. Trent Sears said

    How true! I recently experienced this with my cell phone company. Seven years of loyalty, and only after I threatened to leave them did they offer a “deal”.

    Great post!

  5. Becky,

    Great post and right on target. I have discovered that often a current customer can get the same deal with a phone call expressing disappointment that the deal is only for new customers. But why should I have to figure that out, endure hold time, and then have to explain to a customer service supervisor why it is important to give a loyal customer the deal?

  6. A Suggestion to Keep Existing Customers

    My brother has been a Cingular Wireless customer for about five years now and when he saw an offer for a free phone – the exact phone he wanted – he called them to ask if he could take advantage…

  7. Adam Kayce said

    Bingo. This is exactly why I left my old webhost. Their new-customer package had benefits mine didn’t, and they wouldn’t upgrade me, even though I’d been with them for over three years. Ridiculous.

    Good news is, I love my new hosting company, and, they’re cheaper. :-)

  8. Sometimes these things work out for the best!

    I agree that it is ridiculous when a company doesn’t honor or recognize their existing customers. They take them for granted, then they end up losing customers and wonder why. Perhaps instead of spending loads of money on a great new marketing plan, companies should focus on how to better meet the needs of existing customers (which are less expensive to keep, anyway) and build their growth organically.

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