Have you ever thought about breaking up with a company just so they would see you and treat you as shiny and new again? Is it possible that some of your customers are having that very same thought right now? Have you ever thought about how wrong that is?

Last week I was contemplating breaking up with my satellite tv provider. It’s not that I am unhappy with the service – I turn on the tv and the channels pop up, just like they are supposed to (unless my dish gets covered with snow, in which case I have to break out the broom and head to the roof).  It’s just turns out to be a math thing.

You see, when I first made the switch from cable to satellite, they provided me with tons of great incentives. Discounts, free channels, free premium services, etc… Now, though, I feel like they don’t appreciate me. I see their commercials and their emails and their direct mailers – all offering more fantastic incentives…TO NEW CUSTOMERS. But are any of these available to me? Nope.

In fact, the only way I can get in on the new deals is to cancel the service, wait a month, and then re-sign up. And so it became a math thing. I started crunching the numbers. How much could I save by breaking up with them so that they would see me and treat me as something new and shiny again? And how much of a pain would this be?

I must admit, the satellite tv scenario is not the only time this has played out for me. I’ve done similar analysis when it has come to cell phone service, banking, mortgages, credit cards, and more. (In case you are wondering, my laziness trumps the financial benefits of switching nearly every time – which is what they count on…).

If your customers are doing this type of math, chances are you are doing something wrong. If you are more focused on acquisition than retention, you may be missing something. According to Brand ManageCamp speaker and best-selling author Joseph Jaffe (“ZERO,” “Flip The Funnel“, JaffeJuice.com), you may even be creating the problem. Perhaps you require so much acquisition because you are LOSING SO MANY CUSTOMERS!

Joseph talks about the fact that acquisition is getting harder and harder – and it was already far more expensive to acquire new customers than to retain old ones. Plus – those happy, retained customers tend to spread the word and become their own new customer acquisition channel.

Consider King Soopers supermarkets – where I buy my groceries AND my gas. When I show up at the pump, I don’t see tons of ads offering freebies to new loyalty card owners. What I do see is that I get $0.03 off a gallon EVERY time in appreciation of my loyalty. And the more I shop at King Soopers, the more I save a gallon. When I’ve played it right, I’ve received nearly $0.20 off a gallon – and my tank was nearly bone dry!

In addition, they keep track of everything I buy there and, about once a month, I receive a personalized mailing with coupons picked specifically for me. They are sending me coupons on items they know I buy. Seems counterintuitive, right? Somewhere, someone is saying “but why incentivize you on products they know you are going to buy at full price anyway????” Because they understand retention and the cost of churn and they want to make sure I don’t go anywhere else.

So do you think I consider doing my shopping elsewhere? Not unless I absolutely have to.

This is all part of what Joseph refers to as ‘Flipping The Funnel’ – spending less time and resources on acquiring new customers and more time and resources on keeping existing ones. How to go about doing this is just a piece of what he will be discussing at Brand ManageCamp in October. In addition to Retention, he will also be talking about how to create Zealots, embracing Entrepreneurship, and curating Owned Assets – all pieces of the bigger puzzle of striving for ZERO paid media as the new marketing model. I, for one, cannot wait!

 

  • Sacman

    I appreciate your examples as this has been a pet peeve of mine. I recently moved to a new home in a new community. In discussing the “move” options with my cable provider, it became clear that it was to my benefit to simply close out the account at the old address and start a new one at the new location with the same company. I get monthly savings and several hundred $ in benefits for doing so. The fact that the staff recognized this and agreed that I’d have to do that is galling, and further, when I noted I’d look at competitors, he responded with “You’ll call back…most people do.”
    I had a similar situation with my fitness center when I moved. Same chain, but “upgraded location (the only location in my new community). When I called I was told I’d have to pay over 2x as much monthly to access the club. But they said “sometimes” they run upgrade specials, and they could call me if/when that happens. Really? I’ve paid my bill for 10 years and you’re going to tell me to go without gym access for the next month or so until you’ll call me and offer the exact same thing I’m asking for now? So, I went and got another membership elsewhere despite the club being inferior. What happened? Literally 5 days after my first call, my original gym called and offered me their “upgrade” special. I told them they were too late and that I’d had to move my membership elsewhere because they weren’t willing to give me the pricing when I called. “Ok, thank you.” Click. 10+ year customer. Unfortunately, for some industries, it’s apparent that they aren’t considering, or don’t have enough, competition.

    • http://brandmanagecamp.com Len Herstein

      Unbelievable. Actually, unfortunately, VERY believable.