Keep Your Current Customers Happy
My husband and I use Blockbuster for our movies. We started this when we lived within walking distance of Blockbuster, so trading in our movies was a great perk for using their service over Netflix. Our life has been pretty busy recently, and we no longer live close to a Blockbuster store. Thus, we decided that we should downgrade our monthly plan. Imagine our surprise and frustration when we found out that Blockbuster has lowered the price of our current plan by $2, and didn’t give us the new price! We’re paying $16.99 per month, and it’s been reduced to $14.99 per month! It’s not really about the money, but rather feeling like we’re unappreciated and that they’re taking advantage of us. This is not how you want your current customers to feel (especially when you’re tanking as bad as Blockbuster!)
A lot of companies miss opportunities to keep their current customers happy. Blockbuster could have made a great impression by sending us an email with the message, “Thanks for being loyal. We’re lowering your monthly payment because we appreciate your business. Enjoy the savings!” This would have made us feel like valued customers, and we would want to stay with Blockbuster because we feel like we can trust them to give us great service and fair pricing. Now, we have a sour taste in our mouth because we feel like Blockbuster has been jipping us for the past few months! This price change was a great opportunity to solidify our loyalty by treating us well, and instead, they’ve made us angry.
Acquisition costs for new customers are much higher than maintenance costs for current customers. Sure, you lose $2 per month by giving us a price break. But you’re about to lose $14.99 per month because we want to switch to a company that will give us better service, including the discounts they’re giving to new customers. If we were in a year-long contract, I could understand not passing on the discount, but this is a month-to-month service! Some companies are so focused on growing the number of customers that they forget to look at revenue growth. You’ll lose revenue if you’re constantly chasing new customers by offering them a lower price, while excluding your loyal customers from the new price.
There’s a reason Blockbuster has had some hard years, and their strategy for reaching and keeping good customers might be a contributing factor. So, I say to companies everywhere: Keep Your Current Customers Happy…. your bottom line will be happier in the long-run!