Existing Customers Not Important, Negate Them!

Do you believe that existing customers not important? Do you feel that many businesses care about their current customers? Do you feel that your service providers have done enough for you? Have you done enough for your customers?

Let’s do this simple test.

How many times does your service provider call you or let you know about their promotion before they announce it in the advertisements? Have you experienced that only NEW APPLICATION/SUBSCRIPTION will get the free travel packages for things you have purchased 10 years ago? Did any of your providers stop charging you renewal fee after 10 years of credit card usage? Or they tell you please pay and the waiver is only for NEW CUSTOMERS?

Let me tell you, the new marketing strategy is “negate the existing customers, conquer the new ones”. I personally have experienced for a number of times but at first I thought it only happens to selected businesses where my contribution to them is only a fraction and their business size is also small. Grocery stores, food stalls and so on. You can’t expect much from these businesses. But some of them remember you and welcome you graciously every time you come, that’s already good enough.

But the one that I have major concern about is the big businesses like banks, credit card companies and telecommunication. Let me tell you my own experiences, perhaps you can relate to it. These are just my personal observations as their loyal customers. In short I feel frustrated.

I was at one of the major banks in Malaysia. I have been their customers for about 10 years. Even when I set up my business I used this bank but then my business went busted so I closed my business account. This bank is strong and has a lot of ATM machines and as a customer I was quite OK even though they have not done enough to recognize me. A few years ago I set up a saving account for my daughter and my youngest sister with this bank. Recently my wife also becomes a customer of this bank. Can’t you see this bank revolves around our family? 🙂

Then, a promotion came for children savings account. And the promotional gifts were something my daughter adored so much; Toy Story merchandise! Yeah it was part of Toy Story and the bank joint promotion. I called up the bank call centre and made an inquiry. I asked them my daughter already have an account so how to transfer this account into “Junior Savings Account” promotion. The person on the line said, “It’s actually the children savings account where they just rebranded it and did this promo.” Next I asked, “How can I get these promotional items? Because it is something my daughter would love to have and her cash saving is 6 times of the required amount for new account opening.” The person replied, “You have to go to your opening account branch and claim.” Guess what I did?

Every day I plan for a quick visit but never happened because I have moved job and it’s very far for me to visit that branch from where I work. One fine day I took leave and grab my daughter to the bank. I sold her the idea of Toy Story merchandise and she was very happy.

Then we arrived at the bank and we were told “No Toy Story merchandise” and they said I probably called wrong number! My eyes rolled and I was pissed. The gifts are only for new application and if I want the gifts I need to top up the account. And the joke was that branch never distributes the gifts as only the headquarters does them. So what was the thing I heard from the call centre? Moreover, when asked how their HQ will know if I top up the account using online banking, they said their system will pick up and “automatically” send the gifts to my house. Emm…I don’t think their system is that sophisticated! Then, I looked at my 3 years old daughter who was already happy with Toy Story brochure, I decided to leave.

What if I close the account and re-apply with the same amount (which is 6 times more of the required amount), I probably will get the gifts. Or maybe if there is a competing bank with the same gifts I would have switch. Really. But I wouldn’t want to trouble my daughter and the bank for such a “childish” act. But I think the bank acted “childishly” also because they hoard the merchandise and only give them to the customers that they want; mostly the new sign-ups. In short, they don’t really care about existing customers and negate us completely. This is where many businesses have got it wrong.

Another case was my experience with my credit card company. I have been a good paymaster and have been with them around 10 years. I hardly pay late and never ever I miss my payment for the month. Even when my business went busted a few years ago I already budgeted for the next 6 months for credit card expenses. Well, generally my credit card expenses are for my petrol, insurance and monthly overheads. No shopping of course during “dry period”. 🙂 Every year I have to call them and request for the waiver of renewal fee. If I forget to call, I will get charge so I have to keep reminding myself about it when the time comes. It is not as painful experience as the bank, but it is just unnecessary thing for a loyal customer right? Lately the credit card company launched various campaigns and promotions. Unfortunately many of the promos are to attract new sign-ups and none was exclusively for loyal customers. I was disappointed. Firstly because I wonder why I never win anything from their contests and why only new sign-ups win? I couldn’t understand the economics behind it other than purely greedy and extra-driven capitalistic business people that only cares about their profits.

Again, this experience proves my hypothesis is correct. Nevertheless, one good thing about this credit card company is they are very responsible. Sometimes ago I had fraud cases they solve it fast and refund. I also got scammed and paid the money, this credit card company helped me out and forced the company to refund me or legal action will be taken. But wouldn’t it is their responsibility to safeguard their customers? So we are even!

Finally, another experience to prove my hypothesis correct is my telecommunication service provider. This company dubbed “the most prolific telco” in my country. Yet, they don’t have a single view of customers. They don’t analyze their customers database (probably by the millions) to see where their customers are going and what to do next. What they care about is only new product launch, cut coupons, simple rebate and other “no brainer” promotional schemes. After 10 years of loyalty I only received some coupons by snail mail and there are expiring in 1 month time. No brainer? Yes!

Recently I went to this telco to subscribe broadband service. I was told by few friends their broadband is among the better ones. In Malaysia, the service providers are limited thus they don’t have to try hard to win the market. They just have to adopt “follower” mentality because if you become the leader you will not make enough money. This is one of the problems when we have a “somewhat closed market” whereby the market is dictated by the businesses. Not good for end customers like you and me. After going through some procedures, I signed up. Months later they have iPhone promotion whereby you have to change your mobile plan and opt to pay iPhone with easy payment scheme. So I went to the service centre and hoping to be treated as loyal customers such as “Sir, since you have been with us for 10 years you will get additional $1, 000 rebate for your iPhone or mobile plans.” But heck, the promotional plan is worst because the charges are higher than my current one. So I gave up the iPhone and the new mobile plan. Have you experience the same thing? Or was it only me? 😛 Can’t you see they always try to negate the existing customers? Can’t you see these businesses are only care if you are the new sign-ups? Did they tell you in their advertisements they care and love you as their customers? Emmm…obviously they don’t tell you in full sentence which is probably “if only you are our new customers”.

This is a big shift in how organizations treat their existing customers. This will backfire. They simply negate you, they only want new customers and they don’t really bother about servicing you until you tell them you are leaving to their competitors. But this “marketing strategy” is endangering these businesses because as the middle income around the world increases my leaps and bounds; in one article I once read said the middle income will grow by double digit percentage in the next 10 years especially in the emerging market (not to mention “girl power market”); businesses will have tough time to sustain their businesses. This is where loyal customers become the balance sheet balancer because everyone knows to attract new customers you need to work 7 times harder.

My next post would be about marketing strategy that no longer welcome but still being practiced by many businesses. Surprisingly they seem “mentally blocked” about their marketing strategies.

Brickbats please send to [email protected]