Saturday, August 20, 2011

Customer Loyalty, Acquisition Cost, Promotional offers etal.

In today's marketplace Customer Loyalty is a rare phenomenon. So many companies are trying to get Customer attention and share of Customer's wallet that it is increasingly becoming costlier to acquire Customer's business. Everyday customers are flooded with Daily Deals emails, Coupons in the mailbox, Promotional offers and account opening bonuses. Most of them ignore it(never open the email or throw them in the mailbox garbage bins). Second largest consumer category - exploit the offer and move on. Only the very few accept the offer and become loyal customers. Very inefficient, yet most popular(easy solution?).

There are few rare exceptions who never(or rarely) discount their prices but still can manage to get an extremely loyal customer base. Think about Apple or Disney - Have you seen them giving away deep discounts on a regular basis or sending promotional offers through mail? They do not. Instead they concentrate in creating an amazing product which people love to buy. Delighted customers do the advertisements free of charge(Inbound marketing?).

There is another great way to secure loyal customers - by being human and providing great customer support(zappos was a great example). When a company grows big it introduces lot of processes and procedures and thus become a giant robot loosing the human mind to help customers. 'We are sorry to hear that but as per our process...' instead of ' I am so sorry, let me try something for you...'. No prize for guessing who will win customer's soul.

Both these are tough to do when you are a big organization. Hence they are so rare. But they are worth the try!

1 comment:

Himanshu Chanda said...

Your ideas are very apt Abhishek. Apple and Disney never discount their products because they dont need to. We prefer paying a premium because we value those products, what they are earning is not just customers but loyal catalysts who promote them further!