How many times as a customer of an organisation, have you found yourself repeatedly frustrated by the organisation’s marketing focusing solely on sourcing new customers and not retaining the ones they have? Good examples of these types of strategies are phone companies such as Vodafone, Optus and Telstra who spend large amounts of their advertising focused on new customers – with little/no effort being provided to current customers. After all, they figure that you are locked into a contract for two years – so why bother?
The answer is that customer retention is important – just recently I was looking at booking two more tours through a travel operator (tempo holidays) when they politely told me that they do not offer discounts for multiple bookings, this is despite the fact I was looking at spending over $5500 with them. I politely told them that if that is the case, then don’t worry about the subsequent bookings, as I won’t be booking any more tours through them.
Where is the logic in the above situation? Instead of looking that they could make an additional $2400 out of my partner and I, they lost the full amount. I wasn’t expecting much but figured 5 to 10% would be feasible. After all, losing $240 instead of $2400 sounds a lot better, right?
Companies often think because they have a tender or contract with you that they don’t need to try hard during most of it, and typically these type of relationships follow the below pattern:
1. Stage One: The wooing: During this stage they try really hard to get your business. If they are successful, you enter into the honeymoon stage.
2. Stage Two: The honeymoon: This typically occurs during the first three months of being in contract, they try hard to sort out any issues you may have – after all they don’t want to waste time on a difficult customer throughout the whole relationship.
3. Stage Three: Who gives a crap: This typically occurs during the 18 months prior to the end of the contract. As you are theoretically stuck with the company for a period of time, they figure by the time the new contract comes along you will have forgotten your previous grievances.
4. Stage Four: I’m sorry: This typically occurs within two months prior to your contract ending. During this stage, they apologise and give excuses, such as we were upgrading technology and now that it’s sorted it won’t happen again and so forth. This is the stage when they offer discounts and incentives to continue with them. Instead of taking the first offer they give you – call their competitors, it’s funny how much of a better deal you’ll get by shopping around!
Until next time,
Cents and Sensibility
Julia Taine, Executive Director of Vent2Me, is a marketing problem solver and mentor. A mover and a shaker, Julia sees a niche in an industry, and takes it, by making it her own. Julia started Vent2Me, because people she knew were struggling with their online presence and their digital strategies. Julia knew she could help these people, and so here she is today.