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March 9, 2004

Customer loyalty vs. new customer acquisition

default — by TDavid @ 12:40 pm PST
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Was at Blogcritics talking about cell phones and the issue of existing customer loyalty came up. Here’s what I had to say:

I was with my last cell phone carrier for over 4 years. When we left they had all these great deals they would give us if we stayed. I say fuck them to companies who treat their loyal customers this way. If they weren’t giving us the great deals all along, then that’s a serious customer service issue. Almost every study every done shows that loyal customers will be repeat customers and make you more money than the acquistion of new customers, which is much more expensive. Then on our way out they threatened us with collections two weeks after we cancelled service if we didn’t pay the final bill (we paid every bill on time, every time, for over 4 years). The problem was the bill hadn’t even been received yet for us to pay. Don’t you just love treatment like this? SprintPCS isn’t the best as far as features for phones, agreed, but that unlimited Vision service for 15 bones a month is sweet. And we can do a lot of stuff account-wise online, which is another nice benefit if the bill doesn’t come. Now if only Sprint had Bluetooth! Grrr! It’s the one thing that would probably get me to switch, because I’d like to have the integration with my HP 1945 Pocket PC, but then when I’m the day comes that I’m in the market for another cell phone (a couple years, most likely) I’ll want only one device to carry. Also in my area, Sprint has the best coverage

Another business where this is bad is in TV. Switch from cable to satellite and back and you’ll experience all sorts of special “new customer-only” plans. If you try to take advantage of many of these customers as an existing customer, no matter how long you’ve been with them you are told that they are for new customers only. Somebody has to get a hold of these marketing geniuses and give them early retirements.

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