4 Signs Your Customers Hate You
If you answered "yes" to any of the four questions, your company may be engaged in what an article, "Companies And The Customers Who Hate Them" in the Harvard Business Review calls "adversarial value-extracting strategies."
Not only do these company-centric methods anger consumers, it makes your customer base vulnerable to new, customer-centric companies. Witness the disruptive effects of Netflix, ING Direct, and Virgin Mobile.
It costs 10 times as much to get a new customer as it does to retain an old one. So why not shave a few mil from that bloated ad budget and spend it on making your customer base happier? Your bottom line will thank you.
If you have access to EBSCO, like through your school or library, you can read the article by searching for AN 24998010. — BEN POPKEN
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Comments:
fuckin-a, this is why this site rules.
I am definitely giving this article a read. Hopefully some of the executives who are smart enough to know which way the wind is blowing will read it as well.
The thing that they sort of mentioned, I think is worth mentioning again - when these companies, say cellphone companies - see your account going over by not $5... not $10... but sometimes getting into the HUNDREDS of dollars in overages and just watch you twist.
When I get a bill that is just a few dollars over, I'm pissed, but good Lord if it ever starts getting into the HUNDREDS of dollars, it is obvious they WANT you to get to that point. What it comes down to is they want you to screw up. A great point is the story on Consumerist about Verizon not knowing what the difference between .002 cents and .002 dollars. I couldn't even read the whole transcript it was that frustrating.
This is why you want to carry and use only an American Express Card. They don't do a lot of the nasty bull that Banks do with their Visa and Mastercards.
We all know these companies and their current models of shittiness will eventually fail them (one day), but how long will it take for their crap-tastic practices to actually die?
JohnOB1- Why should they monitor your activity to keep you from spending more money with them?
swalve: because a customer who gets hit with an unexpected, massive bill is more likely to think twice about whether their service is worth it.
Sprint does it the right way; if you rack up overages, they simply bump you up to the next higher bulk-rate plan for the month (and keep bumping you up in $5 increments as long as you keep using overage minutes.)
If an unlimited plan costs $200/mo, there is no reason why anyone should be charged more than $200 for minutes. None. If you are racking up so much overage that you will pay more than $200 for the month, the company should just bump you up to the unlimited plan for the month, and charge you $200. That's intelligent customer service, and I'd wager that if a company actually thought like this, they'd be far more effective at keeping customers than just by locking them into contracts.
@UnnDunn - Thanks, didn't know that about Sprint. That sets them a step above my current provider.
This is a very basic lesson. Don't you understand that most of the CEOs out there didn't know this at the first place.
They knew it and they can do nothing about it. I always get surprised when reading the quarterly financial statements. Statements talk about so many new customers have joined this quarter. But they will never say, how many left and why. That's a cheap tactic these bum-heads were playing for long time.
Some CEOs escape without any damage while few get trashed.
Anyways, nice article.
Regards
Nick @ www.talentshakes.com
I have read most of your articles. It makes sense to have the buying power with the buyers. All CEOs are crooks to the core.
I am trying of dealing with any company which doesn't have any respect for our money.
Good job consumerist. Keep the good work going.
I just received a copy of the article, and yes, it is well worth the effort to get your hands on a copy.
Indeed, the article is named "Companies and the Customers Who Hate Them." The most interesting point is that this kind of behavior is a slippery slope: companies rarely think, "today, we're going to make profits off fees." Instead, someone looks at a balance sheet, sees that fee revenue is outrageously high in comparison to cost, and rather than saying, "this fee does not make sense to either the cost incurred or the long-term retention of customer," they instead simply do nothing (or argue that everyone else is charging $39 for a bounced check, so why don't they?).
someone needs to get a copy of the article and post it on a file sharing site or make a torrent of it. Or maybe the consumerist can get a copy and post it here.
Perfect example is Cingular Wireless. This past April my long 2 year contract was ending, my 2 year old Razr was dying and I was free to make a choice to run for it. Most cell companies offer similar rate plans but they also have been waiving ridiculous activation fees. I asked Cingular if they would give me an incentive to stay after I told them Sprint was offering a significantly cheaper price on the phone I wanted to upgrade to. They said no. And they added that if I was going to get a new phone I'd have to pay an 'upgrade' fee. Basically paying them to let me stay with them. I remember being able to get a new phone, giving the phone rep the serial number and in seconds having a new phone on my same plan with no charges. They've become such a behemoth of a company that they don't have to worry about making their customers happy enough to stay. My phone suddenly broke 2 weeks before my contract ended and I gave in and bought their phone (which luckily was offered refurbished, cheaper than the original offer) and paid the 'please let me give you money for 2 more years' fee. Is this standard for most cell companies?
I think they got the title of this piece reversed. It should have been...
Customers and the Companies Who Hate Them