Loyal customers need to be cared for
As a leading brand partnership and affinity marketing agency, a clear trend we’re seeing is that brands are putting far more effort into attracting new business rather than looking after existing customers. But it gets worse. Brands are not only more concerned with new business, they are actually penalising existing clients by rewarding new ones with better rates and deals!
Such a short-sighted approach must be either down to a new generation of inexperienced brand managers making it through the ranks or else a new plague of ‘short termism’ that encourages brand managers to ignore all their marketing case studies and to leave them scattered around their university libraries like tired, old periodicals.
For experienced marketers, ignoring loyal customers is akin to biting the hand that feeds you. Indeed, the word ‘churn’ is anathema to us and we put as much (if not more) focus on keeping customers than we do in attracting them in the first place. Our success as a brand partnership and affinity marketing agency is mainly down to this approach. After all, if you can’t retain customers you really shouldn’t be attracting them in the first place.
As if to underline our stance, a recent survey of more than 2,500 UK consumers found that 90% believed most brands put more effort into attracting new customers than looking after existing ones. Half of those surveyed stated that they would even consider switching loyalties if special offers were only available to new customers – in our view that figure is probably on the conservative side.
Take BT Infinity Fibre Optic. We like BT Fibre Optic as a service but we feel amazed that the £42 monthly fee is offered to new customers at £18 for six months followed by an ongoing fee of £32. Savvy customers have been commenting in online forums that the best way round this is to finish your existing BT deal, go on holiday and re-activate your account a week or two later! Or worse, switch to Sky.
Therein lies the rub. By penalising existing loyal customers, brands are playing with fire by subtly encouraging those very same customers to switch brands and go elsewhere. In fact we can almost guarantee that whenever a brand rewards new customers over existing ones, its churn rate will see a marked uptick.
Perhaps more ominously, in an age of social media and online forums, brands that penalise existing customers will create more negative noise and undervalue their brand far more than they could ever realise. It’s a dangerous practice on so many levels.
In short, always take care of your loyal customers. You won’t regret the results.
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