Although the precise multiple varies with who’s doing the telling, the truth is it’s many times more costly to obtain a new customer than keep an existing one.
The sad reality is, no one at the giant mega-corporations gets this — or at least their actions belie that they do.
For years, I’ve been trying to get a less outrageous rate from my local phone company, practically begging them to give me a reason to stick around. Now I have a viable alternative, so I switched providers, and cancelled service.
For the first time in 24 years they ask me, “What can we do to keep you as a customer?” Sorry, too late.
A week later I receive an email message from them. It seems I’ve been pre-approved for a special rate, one they wouldn’t consider giving me as a customer, but will if I’m a prospect. They offer to sell me phone, Internet, and satellite for about what they were charging for just phone and Internet before.
If existing customers were treated with a bit more respect, the marketing folks wouldn’t be under as much pressure to regain the revenue lost from defecting customers. But instead, they do things backwards, treating customers with disregard and prospects with sweet deals.
Peter Lyle DeHaan, PhD, shares his lifetime of business experience and personal insights with others through his books and blogs to encourage, inspire, and occasionally entertain.