Punishing loyalty and other bad ideas

I will admit there delicious irony in complaining about the customer service offered by a magazine that gleefully publishes lists of the worst moments in customer service.

But of course it’s really not that surprising. What that old saying about the cobbler’s children lacking appropriate footwear?

So, on to the story . . .

I am picking on Business 2.0 here—a good magazine that I actually like and enjoy—in order to make a larger point about unfortunate tendency of many companies to dangle elaborate, generous bargains in front of new customers while leaving long-time loyal customers out in the cold.

In the case of Business 2.0 the disappointing news came in the form of an “Important Advance Notice for Automatic Renewal Customers”. Basically I got a slip in the mail telling me that my subscription was about to be automatically renewed at the wonderful rate of $39.95 for the year. A stunning 27% savings on the cover price!

Sounds good so far.

But then I thought back to the moment when I subscribed to the magazine in the first place. I remembered . . . I remembered it being REALLY CHEAP!

So I fired up a browser and had myself a look. Sure enough, it’s cheap. Since I’m in Canada I don’t qualify for the lowest rate, but as I new subscriber I could still pick up two years of the magazine for $13.75. One year for $9.65!

In other words, the bargain rate they were kind enough to automatically renew me at was a full four times more expensive than what they were offering a new subscriber.

Ouch! That hurts.

In fact it hurts so much that I cancelled my subscription.

Of course it’s not just Business 2.0 that are pulling this sort of thing. It’s a bit of an epidemic. Mobile phone providers are all over it. And broadband providers, too. For example, I just heard the other week that my broadband provider was offering a free Dell PC to new subscribers. New subscribers ONLY.

Poor slobs like me that have been paying their bills for years are outta luck.

Well guess what? We poor slobs (a.k.a your customers) would like a new Dell PC too. Or an iPod. Or a boatload of free extras. Or a steep discount. Or whatever you’re dangling in front of everyone-but-us while we look on like a poor kid who just found out Christmas has been cancelled but only at his house.

And until you realize that we want want all these goodies too—that we’re just as important or probably even more important than those folks who aren’t actually your customer yet— we’re gonna keep on deserting you and cashing in on the great offers your competitors are dangling in front of us.

And that in turn will force you make even more ridiculous offers to lure us back. And so on. And so on. Welcome to the vicious cycle.

As for Business 2.0 I’ll probably renew it soon. I like the magazine.

And hey . . . I hear they’re offering some really great rates for new subscribers.


TAGS: customerservice, service, loyalty, business2, business2.0