This may sound weird, but for most of these companies, the tenure of its clients don’t matter. To put it more directly, A client is what a client pays. Companies’ relationships with their consumers are only about the money.The funny thing is, their clients are getting the message.
Let’s be clear: In a commoditized market, you cannot get out of the churning wheel simply by approaching your clients from the economic part of the equation.
Getting out of the Wheel
So, how does one stop this infection? The answer is easy to say, but difficult to accomplish. Here we go:
Focus on your Loyal Clients and start valuing client tenure in your company as the golden KPI.
- Do your Loyals feel rewarded?
- How do your Loyals feel when they learn that someone new to the company is paying less than they are for the same services?
- How does a Loyal who has been with you for the last ten years feel when you force them into a long-term contract and an expensive termination fee?
- How does a Loyal feel when another company offers them the same services for less than half of what they pay you?
Loyalty: A place to thrive or a prison?
Spanish big telco companies are accustomed to walling their clients in. These are the tools they’ve been using to do so: Long term contracts, pushing product bundles so clients have to keep them all; offering products that are easy to contract, but that require complex interactions to be dropped…
- What if we tried to work the other way around, by building a place where the client would love to stay?
- How can I make my loyal customers proud of being part of my brand?
- Which services are unique to my loyal customers?
- Which services do I provide to my loyal customer that are aspirational for other brands’ customers?
A different approach
Not everyone of us is moved only by money; very successful brands have built loyalty using a different approach:
Focusing on brand identity: How strongly they feel represented by your brand. TPO: Being part of this company is linked with supporting good causes. Ten percent of the total paid by its clients is dedicated to charitable causes decided upon by the brand clients.
Focusing on the brand experience: What kinds of unique services or proposals do they understand that you are providing them with? Amazon is the perfect example to follow for this kind of loyalty. Its services are unique, and clients would be hard-pressed to replace them.
Focusing on the incentives: How does your company reward clients? This is usually the part that telco companies connect to loyalty. But companies like Tesco Mobile have brought the game to the next level by linking their Tesco Clubcard to retail stores.
A decision to make
So you have now a decision to make before you go ahead and start to think again on how you structure your customer relationship. Take a step back and reflect on who your clients are. What are you pushing them to do? Are you already hostage to your Mercs? Is there a base of Loyals to reach for?
As it happens with most illnesses, the longer it takes to accept and understand that there’s an underlying infection, the harder it will it be to cure it.
Thanks to Oier Romillo Lartitegui.