- Centurion Member
- Posts: 138
- Joined: Sat Jul 12, 2014 7:38 am
- Location: Atlanta, GA
What I think is happening, and it has been happening in various industries for 2+ decades, is that there's this mindset that acquiring customers is first and foremost.
I think that the people in business and marketing, and I'm guessing because they're taught this in college, think about these priorities in this order:
1) acquire new customers
2) retention of exiting customers
3) offer a good product/service
In the model above they just want a head count. The quality and value of the product or service is an afterthought.
Instead of thinking, as most of us would think, more in this order:
1) offer a good product/service
2) acquire new customers
3) retention of exiting customers
That set of priorities makes far more sense to you and I.
Now, there are business goals and short term incentives which help lead to all of this. Someone may be giving a task of acquiring 20,000 new customers in the next year in order to get their bonus. To them, acquiring customers is first and foremost. Who cares if they stay? They want that bonus!
With this I think that the business, as a whole, loses site of the quality of their product and the contentment of their customers with their product. That magic "new customers" number is all that matters.. Maybe someone else is given the task of keeping the old customers and then you end up with ridiculous incentives for people to stay instead of just offering them a good product at a fair price the entire time.
I first noticed this in the 1990s with the long distance companies competing. AT&T, and other companies, would pay you $100 flat out to have them as your long distance company. They would even offer you competitive rates. This was all only if you weren't with AT&T. So, if you were with AT&T and said, "I want a $100 check. I want better rates," they'd tell you, "No - that offer is only for new customers." It was in your best interest to leave AT&T, because of these bizarre business practices, and come back 6mo-1yr later and have them to pay, both in the check and advertising, to win you back.
DirecTV does this. SiriusXM does it. The cable companies mostly seem to do it but if you just call up and ask for the latest discount after paying a month at the normal price.
I think the problem isn't the deals that they offer, it's that they concentrate more on the acquisition and retention that the product or service.
For example, say I had a new mobile service that was better than AT&T's. I may want to offer it as a discount to entice people to try it but, after that, I'd want them to stay because of the quality of service and the value I provide. That makes sense.
Today's business world focuses not on the product/service but on the carrot. There's always a carrot and, in a weird way, the public has grown accustomed to this and now expects the carrot or jumps ship to the next carrot.