In Business 101 at the University of Maryland, one of the first rules covered was it is far easier and cheaper for a business to keep a customer rather than having to find a replacement or new customer. The concept seems somewhat common sense: if you've already got a customer you need to do what you can to keep him, and you won't have to spend money find someone new. Therefore, I'm left to wonder what school the current crop of business leaders attended which failed to teach them this fundamental concept.
Since 2006, I have used DirecTV for satellite service. Except for one equipment upgrade a few years ago, I've been delighted with what they provided. Anytime I had an issue, question, or needed assistance they were all over it from the minute I dialed the phone. I admit being nervous when AT&T bought them out, but such things happen, and as long as I was getting the same level of service I would hang around. Then, almost a year after the buyout, the price for service was raised by about 35%.
After receiving the bill, I went to their website and looked around to see if I should just downgrade my package a bit to get my old price back, after all, sometimes prices go up. Then I noticed they were offering new customers the exact package I had subscribed been maintaining for the last 12 years, for the exact price I had been paying before the increase. So, I called them up and told them if they wanted to keep me as a customer they needed to match the same deal they're willing to give a new customer. They balked and said the deal was for new customers only and there were no current discounts for which I was eligible. Having been through something similar with another company, I tried to call back later to see if I would get a better answer but I received the same response.
While considering my next move, I started to look at other alternatives which were available in the marketplace. I discovered if I added an attic antenna for local channels and a streaming service for things like Discovery and NatGeo I could match all of the channels I had previously been getting. Of course, I would need to raise my Internet speed to guarantee no lagging, but even so, I would save 50% over what I had been paying prior. The bottom line was rather than facing a 35% increase I was going to say 50% and maintain the same channel selection. Even with the minor upfront cost of the antenna and a few other odds and ends to make it all work; I came oput ahead very quickly.
I'm not sure if it was out of some misplaced sense of loyalty, or maybe just a bit of insanity, I decided to give DirecTV one more chance to make things right before I bought the necessary hardware and got on with the transition. When I called them back this time, I started by having them first look up how long I'd been a customer. I wanted the representative to be aware of how long I had been with them before we started discussing the actual problem. The answer remained the same, even though I added the logic there was no extra cost to them for me to maintain status quo since I already had all the equipment versus the costs of bringing in new customer online. Rather than keeping a decade's old customer relationship, they chose to throw it away, and offer a better deal to an unknown prospective customer which will cost the company a few hundred dollars in equipment and setup costs. This way of doing business is completely abzocky -- or maybe they are having a flashback to when they were a monopoly and there were no alternatives. If I was a stockholder, I would sell as this business model is not sustainable.
So, a month after cutting the cable. I have full DVR capability for both local channels and my streaming service which costs me zero and is only limited by my own available hard drive space. I am now using a fantastic piece of media management software called Plex which combines all of my available entertainment choices (music, video, streaming, photos, and more) in one easy to use interface. Plus it is costing me 50% less than what I was paying initially.
Last night, I made the mistake of answering a call before I looked at the Caller ID and I was confronted by a sales agent for DirecTV. Before I could say I wasn't interested, the agent launched into a spiel offering me a fantastic deal to come back into the fold. Interestingly enough, the deal was still more than what they were offering a new customer. I hung up without saying a word.
These people genuinely don't understand the sustainability of a business is based on keeping customers, not continually recruiting new ones while kicking the old ones to the curb in such a way they will never return.