Thursday, May 22, 2008

Bell's Bills - Part Three....

Today, I’m finishing my rant about my local phone company and auto renewal being a poor excuse for marketing. Instead, I recommend making the effort to ask for the renewal.

So, how can I think that an expensive proposition like asking for a renewal be more profitable than auto renewal?

The reason is obvious. It gives you a chance to do what marketing is all about: SELL. Upsell. Cross-sell. Add options. Ask for referrals.

Auto renewal is a poor excuse for true marketing. Sure, you'll lose some customers by making it a conscious effort to ask them to renew. But you'll gain back more profits through selling upgrades, cross-selling and referrals. And I believe you'll find you'll also increase the lifetime value of your customer by building a deeper relationship. All the way around you'll grow your bottomline by treating your customer with respect.

And now I've had another interesting interaction with the phone company.

Since I was auto renewed at home, I got a postcard at work from the same company. I signed a year-long contract in February. Now they've decided to raise my toll free rates -- by 60%! I have 30 days to find a new toll free supplier -- or accept the increase. What kind of contract allows one side to raise rates except for an oligopoly.

Homework: What can you do to make customers feel you really, truly, honestly respect them? When is the last time you thanked your customer? Don't let customers feel taken for granted.

Thursday, May 15, 2008

Bells Bills - Part Two...

Last week, I wrote a rant about auto renewal masquerading as a marketing technique.

My phone company had dropped the “introductory rate” and auto renewed me into a more expensive package. I hate when a marketer uses a marketing technique they wouldn’t want used on them. And in this case, I think the auto renewal technique actually weakens the brand and strains the customer relationship.

People hate being tricked. In some cases, like insurance, auto renewal isn't a trick. It really is a convenience. But in these cases you'll usually get a mailed or emailed notice before you're charged. The sneaky auto-renewals are the ones that are automatically charged on your credit card, often at a higher rate than you originally signed for.

Being conniving doesn't just create bad will.

Most importantly, these marketers are losing a chance to connect with customers and build a stronger relationship. The average person today has much more marketing savvy than they had as little as a decade ago.

Customers resent being taken for granted by a business. They want to be treated fairly and with respect. And they are using a variety of means to vent their frustration, like email, forums, websites and blogs. (I read about a woman who took a hammer to Comcast’s offices and smashed a few keyboards in frustration over her complaint being ignored and the manager slipping out the back while she waited to meet with him.)

But auto renewal must be effective, or marketers wouldn't keep using it. Right? There's actually a strategy that can be more profitable than auto renewal.

What is it? Simple: connect with your customer. Ask them to renew.

A few years back the idea of “touching” a customer was all the rage. The theory was, it takes about 6 contacts ("touches") from a business before a prospect will become a customer. So why do we stop “touching” them once they’ve bought from us? I believe asking vs. auto renewing builds a stronger bond with the customer. But it can also make you more profitable.

How can an expensive proposition like asking for a renewal be more profitable than auto renewing? I’ll cover that next week after I “touch my phone company.

Meantime, how often do you "touch" your customers? What means are you using: email, phone, mail, voicemail, text?

Thursday, May 08, 2008

Bell's Bills- Part One

"Our phone bill came today," Beth said offhandedly. "It's higher than usual."

"How much higher?" I asked

"I don't know -- about 50 pecent," Beth replied.

"Fity percent?!" I responded. "That's outrageous!"

"And I'm not sure why. It started last month"

"I'm sure why," I said. "The introductory rate expired. We've been ..."

I paused for effect.

"AUTO RENEWED -- at higher rate!"

[Insert suspenseful music here.]

I advise my clients not to use marketing techniques they don't like used against them.

One technique I really dislike is auto renewal.

Auto renewal preys on our busyness -- or laziness. These sly marketers realize that, given a choice, customers won't renew most contracts. Or they'll do their homework and look for a better deal. But by using the auto renewal tactic, these shifty conmen lock us into a new contract -- as if on autopilot. And most customers won't take the time to cancel. If they can cancel, that is.

Tricky marketers spin it as a "convenience" to customers.

I call it a unprofitable marketing.

Why unprofitble? I'll explain next week -- after I talk to my phone company.

Is your marketing strategy doing unto others? Or not doing?

Remember: brand loyalty is earned, not auto renewed.