If restaurants operated like phone companies, you’d never know where to go for dinner.
My family has a favorite little burger joint. Even with lots of similar places in town to chose from, we go there often. We know their food and their service, and we’re comfortable there. They recognize us as regulars, so every now and then one of our favorite waitresses will bring us a free order of hush puppies or a beer on the house. It’s not why we go there, but it sure is nice when it happens.
Compare that to how cell phone service providers operate. First of all, once you’ve chosen one, that’s it. You’ve committed to years with them and them alone.
Then, every time you turn around, you see ads offering better terms, cheaper phones, newer services. But not for you, Mr. or Mrs. Locked-in-Customer. Those specials are for new customers only.
To some extent, it makes sense. Each provider is trying to lure customers away from the competition, or to attract brand new cell phone users. In a recent post on his Planning Startups Stories blog, Tim Berry talked about this temptation to focus on the new customer at the expense of your existing ones.
The message this sends to current customers is just terrible. Back in September, my wife and I decided we needed to upgrade our phones and our service plans. But a call to our provider informed us that if we wanted those low prices on cool new phones, we’d have to wait until our contract on our current phones was up in January. And our service plans didn’t end until May, which meant we couldn’t change providers (and thus reap the rewards of their new customer offers) until then.
It’s sort of crazy, isn’t it? I’d been giving them my money for two years. Now, I not only want to give them more of my money for a new phone, but more money every month for a new, pricier plan.
But they wanted to charge me $400 in September for a phone they’d give a stranger off the street for $100 — a phone they’ll let me buy for $100 in January.
We limped through the next several months, using phones that were practically held together with duct tape, and paying the company less money each month than we would have if they’d let us upgrade. They were practically punishing us for being their customers! (And punishing themselves as well, in lost upgrade revenue.) It doesn’t make sense as a business decision or from a customer service perspective.
Now, can you imagine if restaurants worked that way? What if your reward for being a regular customer at your favorite burger place was to pay more for lower quality food? What if you ordered a dinner special and were told “Sorry, that dish is for new customers only”?
You’d probably head right to another burger joint. They’d have to make you sign some kind of service agreement to treat you that way.
Think about it. When was the last time you heard anyone rave about how much they love their cell phone service provider, the way they might about their favorite restaurant? I’m thinking there might a connection here.
A business needs new customers to survive, as the cell phone guys obviously know. But any good business person also knows that the customers you already have should be equally valued. As Tim Berry said “repeat business is golden.”