blog-header brought to you by Salesforce & gladly.jpg

Treat Your Current Customers Better than Your New Customers

It drives me a little crazy when I receive an advertisement in the mail from my cable TV or phone company offering me an incentive to sign up with them. First, I’m already a customer and can’t understand why they can’t figure that out. Second, why is the price they are offering a new customer lower than what I’m currently paying?

This concept, offering a new customer a better deal than an existing customer, is nothing new. (I’ve even written about this before.) And it’s not just cable companies that do this. The strategy is simple. A company wants to acquire new customers and is willing to cut its rates to do so. But, how do you think a customer, such as myself, feels when we see the deal, then calls the company to ask for the same deal, and is told that it’s just for new customers? Isn’t my loyalty worth something? I would think my loyalty would be an incentive to give me a better deal, versus giving a better deal to a customer they have never done business with before. But, apparently, that’s not the case with some of these companies.

Then, there are companies that take the opposite approach. One of those companies is Naya Traveler. They are a boutique tour operator, specializing in high-end, immersive trips to culturally rich destinations, and they offer a $500 discount to any new customer that signs up for a tour. But, if you’re an existing customer, the discount is $1,000. That’s twice the discount for a new customer. It’s obvious that Naya Traveler values their existing customers.

So, maybe you want to offer new customers an incentive to do business with you. And, maybe it’s an incentive in the form of a discount – something that existing customers don’t receive. I understand the strategy, but that doesn’t mean you can’t do something else for your existing customers. A cable company may offer a lower rate to new customers for the first year. That same company can offer their existing customers a bonus, perhaps a free month of cable or a free upgrade to a premium channel. This is just something that shows “a little love” to their existing customers.

So, when advertising and promoting to new customers, consider the message you are sending to existing customers. All customers should be treated equally as far as customer service is concerned. All should be made to feel special. But, when it comes to the deal, you might consider treating your existing customers, the ones that have shown you their loyalty, a little better.

Shep Hyken is a customer service and experience expert, award-winning keynote speaker, and New York Times bestselling business author. For information, contact 314-692-2200 or www.hyken.com. For information on The Customer Focus™ customer service training programs, go twww.thecustomerfocus.com. Follow on Twitter: @Hyken

(Copyright © MMXVIII, Shep Hyken)

 
  1. So true Shep! Here’s a variation on the same theme. We called to cancel our current cable and internet services. In an effort to “save” our business, I was offered an incredible reduction in our monthly fees. Instead of appreciating the offer, I found myself more determined to cancel. If my business was so important to them, why was I not offered some sort of a reduction for services proactively, versus when the future of my business was threatened? I would love to see the churn rates in the cable tv/Internet service provider industry. It must be huge! And yet all of their strategies are in the form of “saves” versus proactive retention. Makes you scratch your head…..

    • When I read comments and stories like these, I always scratch my head in amazement. Why does it have to go to the “save” mode? Bad will is created with these tactics. I’ve been sharing this quote with my friend, clients, followers, readers: “Treat your existing (and loyal) customers as good if not better than your new ones!”

  2. I receive your articles in my email every week, in fact I look forward to them. I absolutely LOVE them. I work as a New Hire Trainer and often refer to your books and articles in training. I also will forward your emails to my Department Director as I did today. I am often trying to find a “Loyalty” program for MY internal customers while they are in my Training Class. This article has given me some inspiration to keep going and keeping up with incentives! I’m hoping that my Director will be able to pull some inspiration for our existing external customers!

    • Hi Ashley – Thank you for your kind words. So glad the articles inspire you and hope they do the same for your Director. I’ll keep the good articles coming your way! Thank you again!

  3. Many years ago, the phone companies called people and offered them money to switch. I once got a call from a telemarketer representing my existing phone company who offered me $50 to switch the the company I was already using! Yes, I took the money and considered it a loyalty bonus.

  4. Shep,
    You nailed it again. Most companies should realize it costs more to acquire a new client than it costs to retain one.
    The approach for giving a old client a better deal in the example you give is a great way to do it.

  5. Naveed Mohammed says:

    And the same tactics are done with the telecom operators. New subscribers get a lower rate on data and free internet devices. Existing customers don’t even get a replacement if the device has issues. Most companies don’t even realize that they are damaging their own reputation trying to acquire new clients.

  6. Shep, your article is spot-on! I just went through this with my own cable provider yesterday and unfortunately, they don’t get it. Here’s some sound advice from Vistage speaker Charles Bernard: customers buy from you based on price and terms, but clients buy from you because they value the goods and services you provide based on how they benefit from them. So, what are you doing to turn you customers into clients? And what are you doing to keep your clients from dropping down a level and becoming simply customers? I sure wish the cable companies and phone companies would get that message!

    • Thanks for the comment, Will. Your Vistage resource, Mr. Bernard, is a very sharp man! I’ve read the customer/client analogy. It is spot on!

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>