It’s interesting to look at the cell phone provider industry when it comes to customer loyalty. If you’ve ever looked at getting a new cell phone you may have experienced this: You’ve been with a particular cell phone provider for 10 years, you’re looking to upgrade your phone at the appropriate time when your two-year contract is up, and you discover that if you were a brand new customer to that provider you could actually get a better deal on the phone you were looking at than by being a loyal current customer of 10 years.
This makes me scratch my head. I understand that it’s harder to acquire new business than it is to keep current customers, and perhaps that’s the reason for offering better deals to new customers over current ones. However, in business it’s much easier, and less expensive, to keep current customers happy while working toward acquiring new ones.
So do cell phone companies have this backwards? Or, do they just not really care about their current customers as much once they’re signed up knowing that they’ll likely remain loyal at least for the duration of their two-year contract?
My thought would be that cell phone companies would want to offer similar “can’t pass up” deals to current customers that could be viewed by current customers as an equivalent great deal compared to those offered to brand new customers. Does the fact that a customer has been loyal for 10 years not hold more weight than bringing in a brand new customer? Think of the referrals a cell phone company could garner with a stellar customer loyalty program in place. That kind of program could pay off in huge dividends over brand new customers with less cost per customer acquisition.
Now I’m not saying ignore brand new customers, but definitely think through how to keep current customers happy. And it’s possible that my observation is simply an isolated incident, however, from my conversations with friends and colleagues it does not seem to be.
This got me thinking about how with inbound marketing the formula is the reverse: Current customers are gold, keep them happy and they’ll keep referring new business to you and retweeting your posts, and commenting on your blogs, etc., and as new business comes to you, you offer similar valuable content to nurture new prospects until they’re ready to buy. Than at that point you continue to deliver additional valuable content, which makes referrals a natural part of the loyalty process.
Learn more about Brand Communications and how to use it with your Inbound Marketing efforts