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Does Your Promotional Pricing Punish Existing Customers in Favor of New Customers?

Do you read the entire contract when you sign up for a service? Well, my husband and I didn’t and it cost us quite a bit of money!

We had a satellite TV service for two years (regular, non-HD), and in that time period our bill went from $55 a month to $99 a month because that was in the contract we signed. We paid our bill on time each month, we were happy with their channel selection, and we even planned on keeping them up until the point when our bill doubled. At that point, we wanted to contact the company to discuss lowering our monthly cost with one of their new customer promotions. We called and talked with them about it on several occasions (which resulted in a few small credits), but they refused to help us after that. They basically told us that we signed the contract, that we weren’t new customers so we didn’t qualify for further discounts, and that it was just how their system worked.

To make an already long story short, we ended up switching to another TV provider because the company was so inflexible with the price – even though they were willing to give significant discounts to brand-new customers. And this time, before agreeing to the new company’s terms, we read through the contract closely and discussed the details with the sales rep!

So, with that, I’m left with the following questions and concerns. When will these huge companies start offering equal pricing to both new and old customers? Why aren’t there any perks for loyal customers? It really stinks to be paying $99 a month for a service that you’ve had for years when you see commercials on TV each day advertising new customers getting that same service for only $40 a month. I feel that they should offer this pricing to the old customers as long as they call in and ask for it. I would much rather have more loyal customers than ones that come and go, and until recently I considered myself a “loyal customer,” but this company’s unwillingness to work with us forced us to take action and find a company that wanted our business.

It seems to me that companies are offering all kinds of sweet deals to new customers—but nothing for their current and loyal customers. I just can’t figure this one out. Isn’t a good customer worth anything to these huge companies? I feel like that is one advantage smaller companies will always have over their larger competition: great customer service! Customers want to feel acknowledged and appreciated—and they should—without customers, there is no business to speak of, right?

I’m not sure when these policies will change, or if they ever will. It seems like the good old days of excellent customer service are gone, especially when it comes to the huge companies. But I just think it’s really silly for companies to continue losing and gaining customers over promotional pricing. Why not keep your old customers and gain the new ones? One is silver and the other gold, right? As one of our previous bloggers pointed out, Netflix may soon be taking over the TV world, so “regular” TV providers need to get their act together before they lose all of their customers!

What services have you had where the pricing and promotions for new customers make you feel like switching companies? And do you think that these huge companies are really doing better by using such marketing tactics? Or are they just losing loyal customers?



Amanda Sneed

Being an office assistant at Quality Logo Products allows Amanda to have a workday filled with the variety she loves, including writing with the QLP Blog Squad. She enjoys all kinds of music, movies, and TV shows, most frequently sitcoms like Roseanne and Seinfeld or competitive shows like American Idol and So You Think You Can Dance. Often times you will find her at home with her husband, gardening and cooking, or having friends over for a bonfire or a board game night. You can also connect with Amanda on Google+.

Comments

  1. Jill Tooley

    It’s truly a shame to read experiences like this! While I completely understand the concept of promotional pricing, it seems like a dick move to refuse that price for loyal customers. As I mentioned in another post’s comment, I’ve renewed my Sirius/XM subscription for the past 2 years just by asking them if I could get the new customer discount – and they always say yes without any questions asked. And as a result of that, I’m even happier with their company!

    What would you think of companies that offered a gradual discount for loyal customers? For example, if I started my service at the full $99 a month and stayed locked in to the contract for a year, then my price would decrease every year I renewed with that company. Of course there would be a cap of some sort, but I think that would be a smart way to keep customers interested and reward them at the same time!

    Great post, although I’m sorry you had to go through this!

    • Amanda Sneed

      Yes! That kind of offer would make customers super happy! That is what Boost Mobile is doing for their loyal customers right now. Their cell phone service includes unlimited usage of everything (talk, text, pics, direct connect, and web service) for only $50 a month! And every six months you stay their customer, it drops by $5 per month….so after 1 1/2 years, your unlimited usage phone bill is only $35 a month! Which I think is a great deal! =) Plus they keep adding more exciting phones, all without a contract! Way to go Boost Mobile!

  2. JPorretto

    This is the story with pretty much every Service-Oriented company it seems. They bat their eyes and court you heavily and make you feel special, but when they get you locked in they really couldn’t care less about you. It’s like an awful marriage, and the divorces are never pretty. Even if you successfully break it off, they call you relentlessly asking you to take them back. Never Again!

    • JPorretto

      And of course…. Welcome to the Blog!!! You’ve written some epic comments, its about time you had a post of your own! VERY well done!

  3. QLP Kid

    If I was a professor this would be a “A+” paper!

    -QLP Kid

    “It’s How the Midwest was Won…”

    • Amanda Sneed

      Thank you!!! =)

  4. Juliette

    Totally in agreement! I’m always disappointed when I realize that though I might have been a loyal customer for years, new customers are the company’s true focus (did they miss the lecture on how it’s actually cheaper to keep existing customers than to get new ones?).

    I will say this, Sprint has been pretty good with their loyalty programs. This October I hit the 10 year mark with them and get put into their “Gold” plan with some pretty nice benefits. Loyalty programs are often what can entice me to become a customer, even more so than initial “new customer deals”. :)

  5. Joseph Giorgi

    First off, congratulations on an amazing first post!

    Second, thanks for the shout-out to my recent Netflix post. :D

    Third, I agree completely—retaining existing customers should generally be higher on a company’s agenda than attracting new ones. I had a similar experience with my ISP recently, though they were surprisingly able to offer me a discounted rate for my continued loyalty to their service. I get what you’re saying though, and it’s a shame that companies feel entitled to treat customers as they see fit just because they can afford to do so.

    Of course, as you inferred at the end of your post (and as I’ve blogged about in the past), the times are changing rapidly, and if cable service providers don’t have their act together on the customer service front, then they’ll be incapable of competing with the likes of up-and-coming digital content providers like Netflix and Hulu and so on.

    • Amanda Sneed

      Thanks Joe!!! =)

      I am so glad my first blog could get so many people talking!

  6. Bret Bonnet

    Great post and welcome to the blog!

    As always – there are TWO sides to EVERY story. In an effort to NOT make a blog post inside of another blog post with this comment; I’ll be taking the side of the consumer in my comment below.

    First, I’m sure your referring to DirectTV in this post?!?!? They have the WORST customer service EVER. When I used to live at home with my parents they always had Comcast and used to complain all the time about how bad Comcast was. So… when I moved out on my own I was UBER excited to give DirectTV a try.

    BUYER BEWARE – their contracts are LOADED with what I like to call “Gotcha” clauses.

    Want to catch an episode of “Shameless” on Showtime and need to make a change to your service level (upgrade) as a result? No problem – that will just cost you 2 more years additional to your original agreement.

    You want to go out and spend your hard earned money on a shiny new HD DVR for your home theatre because the one that DirecTV provided you originally lacks a HDMI output and is BUTT ugly; you guessed it – another 2 years.

    I kid you not, in a matter of 6 months my contract term, unknowing to me, went from 1 to 7 years. I simply stopped paying my bill, ripped the dish off my house, and told DirectTV that they could swing by my house anytime they wanted and pick up the equipment (which they did).

    SIDE NOTE: How or why is that when I buy an HD DVR for $400.00 that I’m in debt to you in the form of an additional 2 years to my service agreement?

    Long story even LONGER – don’t rely on small print like this to make money. No matter your business – your customers are your most valuable asset. Take care of them like Boost Mobile did Amanda and XM Satellite Radio did for Jill. Not only does doing the “right thing” feel good; it’s actually profitable!

  7. Amanda Sneed

    Wow…it’s so crazy that without me mentioning the company’s name you knew which one I was complaining about! Too bad so sad for them I guess.

    It’s going much better with Dish Network, but who knows how I will feel after a year with them.

    I love having a huge selection of channels with satellite tv services…but maybe cable will make a comeback in our house.

  8. Kyle

    Great debut Amanda! I couldn’t help but agree to just about every single point you brought up in this post. I understand that these companies are trying to attract new customers which I have no problem with, but turning their backs on their loyal customers seems… well to put it bluntly, I’d say it’s a little scummy. Loyal customers should feel appreciated, but sadly this is the way many businesses are run.

  9. LK

    Great post, and great points.

    I understand wanting to attract new customers with low prices, but keeping your existing customers should be AS if not more important.

    If you make an existing customer unhappy they may spread the word about how unhappy they are. If enough people hear about it, the company may end up not having any new customers to give that “new customer pricing” to!

    I think Comcast does a good job of keeping their customers happy with services and pricing, at least from my experiences. We have called them a few times debating switching providers because some services were too expensive, and we ended up with cheaper prices AND an added service at little to no extra cost.

  10. Jana Tropper

    Awesome post. I have the same problem with my TV company (surprisingly NOT DirectTV). In June, they’re going to hike my rates up, so I’m going to lay down their options: they can continue to give me service at the initial rate or I will get the introductory rate from a competitor.

    Business is all about willpower. What is the other person/business WILLING to offer in order to obtain what they need? Considering how much cheaper it is to keep an old customer as opposed to reigning in a new one, you’d think the benefits would go to the loyal ones.

    In conclusion, long live Netflix!

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  12. DD

    You are so right. I am right now preparing my notes to call my satellite company? I have been a customer for 6 years and call them every 6 months for a discount. It use to be a $10.00 discount and now it is $5.00. Their service is great, no complaints other than they have increased the basic fee every year by $4.00 and $1.00 for each box you have, by the time all the communication fees and taxes are added it makes a big difference.

    They always say after 6 months when your discount expires call me back. they think I won’t bother. I am 71 and retired, I have the time, it is the principal. I don’t want to change companies, I just want them to recognize me as a loyal customer. I hope I live long enough to see some good competition in my area. I am hoping for a new start up company.

    I have to go, I need to make my call.

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