“I have been with the same cell phone provider for almost 11 years. Their plans are always priced very competitively, their customer service has steadily improved as has their coverage. One day, as I was roaming around doing some light shopping, I walked by one of their retail stores and decided to walk inside to check out what new phones they had.
I immediately saw one that piqued my interest. I had actually heard about the phone because it was getting rave reviews from personal friends as well as industry experts – so naturally I investigated a little:
Store agent: Hi sir, did you need any help with anything?
Me: Yes, actually I was looking at this phone and was wondering how much it was.
Store agent: Are you an existing customer with us?
Me: Well….why does that matter?
Store agent: Well, because if you already have service with us, the retail price for the phone is $499. But if you were activating a new account with us you would only pay $149 with a 2 year service agreement.
Okay, let’s stop right there.
So let me get this straight: if I am NOT currently doing business with you, my price is significantly cheaper than it would be if I WAS currently doing business with you? Is it just me or is that not an extremely backwards sales philosophy? How much sense does it make to treat someone who’s NEVER bought from you, better than someone who has bought from you religiously for 11 years? I have probably spent several thousands of dollars with you over these 11 years, turned down countless offers from competitors to leave, and even convinced a few of my friends to try your service. And the way you “thank me” is by offering me a HIGHER price than you would someone that you don’t know from a can of paint?
Gee, I feel so special.
There’s nothing wrong with trying to attract new customers. It’s a critical piece of any organization’s business development efforts. But please devote the same level of enthusiasm to your EXISTING customers. After all, your existing customers are the ones paying your bills and keeping your lights on. Not the guy who’s never tried your service before.
You might be thinking “well duh. That’s obvious”.
But if it’s so obvious, why are so many companies still not following this philosophy? Small companies. Mid-sized companies. Even large companies. Companies like Bank of America. Sprint. Microsoft. Hewlett Packard. Wall Street Journal. As a matter of fact, I’d almost be willing to bet that right now, your company probably has some fantastic promotion to attract new customers. A super attractive deal enticing a brand new person to try you out. But there’s probably nothing in place for that customer who’s been with you loyally for 11 years. You know – the guy that loves your service so much he even tells others how great it is. When is the last time your company had a big push to get THAT guy to buy more? It’s probably been a while. In fact, some of you might have never even done it. And the irony is, it’s actually easier to get THAT guy to buy more than it is to convince a new guy to try you out for the first time.
Where I come from, you don’t treat a “stranger” better than an existing “friend.” And the same rule applies in business. I have to reference a commercial I recently saw because it focuses on this point and perfectly demonstrates how ridiculous this sales philosophy is:
Develop an offer that only applies to customers who have loyally stuck by your side. Give them a discount on an upgrade. Start a “rewards” program that gives them points towards something. Whatever the campaign, just figure out a way to say “thank you for being a good customer.” It will make them feel better about sticking with you and who knows they might even turn around and brag to their friends about how wonderful you are. And if any of those friends they brag to are not current customers, they will surely consider becoming one. Remember, the most powerful form of marketing is still word of mouth – especially when the endorsement comes from a trusted source.
If you want your customers to be loyal to you, try being loyal to them. It will come back to you ten fold.