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!