Unappreciated Promotion...

We got a packet in the mail yesterday from an education program where my son, PJ has taken classes for years.

The packet included an application, a brochure and a coupon good for 10% off tuition.

"Isn't that nice of them to give us 10% off PJ's class?" Beth said over dinner.

"Read it again," I said. "The coupon says 'new students only' in the fine print."

"WHAT?" she exclaimed grabbing the coupon from my hand.

"Can you please pass the sweet and sour sauce?" I asked, hoping to distract her.

"What a rotten thing to send us! He's taken classes with them loyally for 3 years. And this is their thank you?"

"Ouch!" I said fanning my tongue. "Those egg rolls are searing hot."

"Don't you think that's a dumb thing to do? Don't you think that says they don't really appreciate their most loyal students?"

"Can I get some water?" I asked holding out my glass.

Beth glared at me.

"O.K. You're right," I conceded. "It is a stupid marketing move."

"Doesn't this go against everything you tell people?" she asked tempting me with the water pitcher.

"Yes. Offering new students a better deal than existing students is dumb. Sending the offer directly to parents of existing students is dumber. Smart marketers invest a good percentage of their marketing budget in retention marketing programs to reward loyalty and reduce attrition. If the school wanted our help drawing in new students, they should have given us a coupon offering us 10% for referring a friend. And they should have included a personal note or letter to build our relationship."

I paused for effect.

"Now, can I have more water?"

Often we value new customers more than long-term ones. Somehow we think growth is built strictly on new customers. That is rarely the case.

In many cases, existing customers can be more profitable. They tend to be cheaper to service, since they need less educating. And loyal, satisfied customers are easier to cross-sell your other products and services. Every percent that you reduce attrition is a percent fewer new customers you need to make your overall sales goals. Most importantly, loyal customers are the most persuasive salespeople you can have. The enthusiasm for your products or services is genuine and often contagious. Their referrals tend to be pre-sold.

How are you treating your most loyal customers? Are you showering them with appreciation, or showing them the door? Don't take loyalty for granted.

- Phil Sasso