Last week, I happened to meander into my bank (I had a check to deposit) and they had a big promotion going on — some really cool gifts for for people who opened new accounts. Well, OK, not really cool gifts, but nice little trinkets. I asked the teller how an existing customer could get one of those.
“You could bring in a friend and have them open a new account, and then we’d give you both one.”
Now, when I opened my accounts with this bank, they weren’t offering any kind of promotion or giveaway or anything. I felt a little left out, and mentioned this to the manager. He repeated the “get a friend to sign up” line. I wondered if I closed out my account and then re-opened it, would that qualify me for it?
It was an empty threat; it would require me to fix my direct deposit from work and get all new checks.
But it brought up an interesting point: why do so many businesses bend over backwards to get new customers, while taking for granted the existing ones?
It’s always been a tenet of business that an existing customer is more valuable than a new one. Keeping long-time customers happy and productive and spending is not only easier than landing all-new ones, but more profitable — you’ve already achieved the hard part of convincing them to give you a whirl. Plus, really happy customers tend to be great sales tools, as they will cheerfully recommend you to their friends and associates.
Yet they tend to get the short end of the stick when it comes to promotions and special deals. How many times have you heard these phrases, or ones like them?
“This offer available to new customers only.” (Comcast is a great one for that line.)
“This is a special offer for first-time buyers only.” (This one is big among car dealers.)
“Special financing for first-time home buyers.”
“10% off your first purchase when you apply for a new charge account.”
Some times, if you really push it, you can get them to give you the same deal as a new customer. But you, a long-time customer who’s given them plenty of money and business over years, have to fight to get the same treatment they’ll give some schmuck who just wandered in off the street.
I understand the pragmatic message behind them. Yes, new customers are great, and a necessity. Yes, you need some kind of gimmick or reward to offer them to get them to give you a whirl. But by sending the message that you value them above your existing customers, you encourage your own regulars to take advantage of similar offers among your competitors, and bounce back and forth, collecting “new customer rewards” over and over.
I know I’ve considered, on several occasions, taking fifty bucks or so and just bouncing it from bank to bank, picking up whatever free gifts each bank offers and then closing out the account once my minimum obligation has been met and another bank has a new freebie I’d like. Fleece blanket here, tote bag there, pillow across the street… (But not toasters any more, it seems…)
And if they ask me why I’m closing out my account, I’d tell them straight to their face: you offered me some cheap trinket, and I took it. Now someone else is offering me another one, and you’ve made it clear that you’re more interested in getting new accounts than keeping them, so I’m outta here. Maybe, when you offer me something else to come back, I will. For a little while, at least. Until someone else offers me something shiny again.
That’s the logical conclusion of all these programs, after all. And I don’t think I can change it, so why shouldn’t I just join in and take advantage of it? Why shouldn’t everyone?
