Bank Promotion Disregards Existing Customers
Writing on his weblog, "Wouldn't that be ironic? A promotion intended to bring in new customers, actually causes customers to leave," Jodster describes a TD Canada Trust "EasySwitch" promotion that rewards new customers with a free iPod Shuffle. Jodster points out this promotion, like many others, penalizes those who are already customers because they are ineligible for the prize. While these customer base expansion campaigns are common, at times, they can be interpreted as discounting, for no good reason, a person who has been a loyal customer for a long time. Perhaps, marketers in situations like this should consider creating an equally compelling offer for existing customers so they won't leap to the the next best offer that pops up.
I called Dish Network when my neighbors got two free DVR's and free DVR service for a year for ordering Dish'. All they could offer me was to purchase one for almost $400 or lease one for $150 a year. I'd been with them for 5 years.
So I said "sod off" and went to Comcast. Even in Dish Network's panicked "please come back" follow-up calls, they never offered me even one free DVR, even though I said I'd pay the service fees.
Granted the Comcast deal was a sweet one, and only offered to "switchers" from Dish, but it did the trick (along with Dish's total incompetence in wooing me back).
Any company that attempts to seduce new customers with gifts, but withholds the gifts from current customers, is broadcasting:
"We entice you to join us, then we take you for granted."
Why can't the bank send the promo to current customers, and give them the option to appear in the bank and request the iPod?
Not every customer will want one, others will not know what one is, still others will not wish to make an appearance at the bank, asking for a free hand-out, since their dignity and cash position would cause them to appear ridiculous.
But the current customers will feel appreciated and not inferior to new customers.
Current customers generate word of mouth, which new customers generally do not, unless they're very excited about some crazy deal they got.
I'm a TD customer and this offer is all over the place including my web-banking information and it pisses me off.
"We entice you to join us, then we take you for granted." - thats is the EXACT message being sent to me and every other customer.
Dario is right on with the message sent to customers. In my marketing workshops, I refer to this as the "What am I, chopped liver?" promotion syndrome. Taking loyal customers for granted is an incredibly risky strategy. Companies have to continually ask themselves: how do our customers know we value their relationship?
Very true Sybil, however, I feel the real question is: how can we reward our current customers, so they will rave about us to others?
Great customer service, caring about honest complaints, using in-house operations instead of out-sourced crap that's cheaper, using a blog to connect with customers, there are many ways to do this.
How can we treat our customers better?
In magazine publishing, we always said "Renewals are cheaper than new subs."
A new subscriber direct mail promotion package was expensive, with only about 3 to 12% response.
But a renewal mailing was unglamorous, inexpensive, and yet it pulled much higher response, bringing in more revenue.
I sold United Wire "telegram" product to publishers all over the USA, which was used in billing and renewals. Publishers loved it because it boosted response at effort 3 or 4 where responses typically fall off.
So I've studied customer service, current subscriber renewals, new customer promotions.
Business just can't seem to think straight about customer loyalty, word of mouth, and ROI.
Netflix is doing this now! I received a letter offering a free iPod Shuffle if I'd commit to a year of Netflix service but when I tried to enter the promotion code it didn't lead anywhere. I emailed customer service and was told
"These special offers are designed to introduce new customers to our Rental Service so that we can grow, remain competitive, and offer new benefits to all of our customers."
Oh, I get it now. New customers should get their first year of Netflix rentals at roughly half price (one year of Netflix is $215.88 but you're getting a $99 iPod) so that Netflix can offer new benefits to me. I think it's going to be difficult for them to remain competitive if they keep treating existing customers this way. I would have pre-paid for a year to get the iPod. Guess I'll be looking at Blockbuster's DVD-by-mail program.
I think anyone outside the UK should see this ad from nationwide building society. It demonstrates perfectly the effect that promotions like these have on banks and financial institutions.
I have signed for a new broadband provider here in Brazil and was entitled to a free R$1000 mobile phone from the company that happens to be my current mobile operator. Even though the small print said it had to be a new mobile account, I called them and demanded a free phone in my old account, in order to keep the number. Guess what? They directed me to their Customer Retention group and informed me I already had credit for a free phone of the same value regardless of the broadband deal because I was a good longtime customer. I would never know this if I hadn't subscribed to the broadband service or hadn't called to ask for the phone, but in the end I was happy with them and remained a customer.
I don't know if this is changed, but for the last month at least I've seen that logo as I logged in to EasyWeb...
It says "Whether you're a current TD Canada Trust customer or someone looking for a more comfortable banking experience, switch your main chequing account to TD Canada Trust by August 12, 2005 and we'll give you a FREE iPod shuffleš - Apple's smallest MP3 player yet."
I called the toll free number and asked how I could qualify for this... it's easy; I use the EasySwitch feature to close another bank account somewhere else, and voila; iPod. The big catch is that you should not use the online form to initiate the process; call the toll free number or go to your bank. Tell them that you're an existing TD customer and you're sick of your secondary chequing account that you setup 10 minutes earlier at the bank across the street and that you'd like to use EasySwitch to move that other account...
Then all you need to do is setup those auto-payment things.
It's 10 minutes of leg work, and you have an iPod shuffle.
i would like to have study material for promotion to JMGS-i OF uco bank