Too many companies still take customers for granted

June 12, 2012

Customer Service

"he profit generated by selling new products and services to existing customers is greater than it is for selling to new customers." (Source and image credit:


I was driving home last night listening to sports talk radio — 810 for those from KC. The show was winding down and the host, Kevin Kietzman, was giving a final shout out to the sponsor that hosted their remote. Every time they do one of these remotes, there is always some deal for whatever business they are at. Yesterday it was Sports Clips and the deal was $8.10 MVP haircuts.

Now I don’t go to Sports Clips and I don’t know much about the MVP haircut. But what’s important to know is that it includes more than a regular haircut. Their website says that in addition to a haircut you get a “classic hot steamed towel treatment and a neck and shoulder massage.”

So now that we’re all up to date on Sports Clips menu of haircut offerings, back to the story. Kietzman is highlighting the promotion one more time and he says something like: “So you can still stop by for another hour. If you’re a first-time customer, you can get an MVP haircut for $8.10. And if you’re already a Sports Clips customer, you can get a regular haircut for $8.10.”

Wait a second. Did you just hear what I typed? Did you see the middle finger to Sports Clips customers pop up in your head as you read it? This is the type of promotion I see and hear all too often from companies these days, whether it’s via a radio promo, part of an online campaign, etc. Brands need to take a second and think about what they’re offering and how the customer will perceive it. Because when I heard the details of this promo yesterday, my first thought was:

So, if I’m a current customer and have already given money to Sports Clips in the past, I get penalized for having done so and get the lesser end of the two deals. But if I have never been there before and never shown any loyalty to the brand, I am rewarded for that behavior with the MVP treatment haircut.

Kind of a slap across the face to current customers when you think about it that way, huh?

It’s not just Sports Clips. Wall Street tells companies to focus on adding new subscribers in order to improve stock prices. The majority of companies I’ve ever worked for reward their employees for new customer growth first, organic growth or retention second. But what’s interesting is that if you look at the research or companies that have taken a customer-centric approach, the results show that nurturing your current customers is one of the best ways to drive new customers.

Why is this? Well, do a Google search for “most trusted form of marketing” and you’ll find a number of different studies. My favorite one is Forrester from 2010 (slide 10). That particular study says 94 percent of consumers trust word of mouth. The second type of marketing on the chart is somewhere in the 30s. When customers have a great experience and the brand rewards them for their loyalty, that creates a story and gives those customers a reason to tell their friends and family about the company. Pretty simple when you think about it.

That’s the problem with marketing communications, and to a larger extent customer relations, these days. Businesses are only thinking short term and they aren’t paying attention to the most important numbers. Who gives a crap if you add a bunch of new customers who try you out one time and piss off a bunch of customers who’ve been coming to you for months or years?

You might even say that Sports Clips use of their MVP treatment had a good chance of pissing off the company’s true MVPs — their current customers. Well, you might. I would.

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susie07 12 pts

 I can control what I do on Facebook and Twitter, but if it's a salon I really like, odds are I already do follow and like you!

margaret14 12 pts

 It was an informative post. The majority of companies I’ve ever worked for reward their employees for new customer growth. Thanks that you've shared.

annedreshfield 889 pts

I agree with you, Justin. It seems like salons are the absolute worst with this. I can't tell you how many times I've opened an email from my salon with some subject about getting money off of my next haircut, and open the email to find that it's only possible to obtain by jumping through about a million hoops. Refer 5 friends (who HAVE to get their haircut there, not even just call to find out more information, etc.) AND like us on Facebook AND follow us on Twitter, and then you might get 10% off! I can't control my friends. I can control what I do on Facebook and Twitter, but if it's a salon I really like, odds are I already do follow and like you! It's pretty incredible that they don't just surprise their customers who are MVPs, as you say. It's one great way to impress me and make sure I *want* to keep giving you money -- full price or not. It shows respect for their customer base, rather than just a shallow attempt at trying to gain more customers. 

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JGoldsborough 247 pts moderator

 annedreshfield Exactly. It's a slap in the face anytime you offer a better deal to new customers. Have to think about that perception.