Valuing Customer Loyalty

This is not another Telco rant post, there are other places to find these if you want, in fact the Australia and world blogosphere is full of them. It is however a story about an experience I had this week with my telecommunications provider that left a rather sour taste in my mouth and raised a few questions in my mind regarding the value companies, small or big place on the loyalty of their customers.

Having worked in marketing all of my working life, I am qualified in at a minimum saying that all businesses want customers to stay with them. Maybe not all of them but 90% of them. You see there is a cost in acquiring most of these customers, then there is a cost of servicing them which is obviously ongoing, so the longer they stay happy and with you, the more profitable they are. Not rocket science.

Now I have  been a loyal customer to this Telco for over 16 years. Well in fact I have been a mobile, home phone and broadband customer with this telco ever since I began any of these services. I started my first mobile plan with them and and am still there (plans have changed). When I eventually moved out of home my home phone line was with them and still is (over 10 years ago) and since hooking up my cable connection (4 years ago), I have also been a broadband customer with them. I have never missed a payment (maybe once or twice because the invoice was moved from the front of the fridge  and I assumed it was therefore paid). In all I would say I have spent between $15,000 – $18,000 with them over that 16 year period. Whilst I am not their most profitable customer, I am loyal, I pay my bills on time and I only call their helpdesk once per year.

Now this week I had a weird experience where my mobile phone bill came in at $351. My mobile cap is $29 and suits me and my phone usage fine. Last year I had changed my mobile phone plan twice in the space of a 3 month period to take advantage of an offer the Telco had advertised. On both occasions, I spoke to the customer service person on the phone and they advised that the change was made. On the first occasion, it was confirmed in writing (email), the second it was not. I was comfortable. The written notice wasn’t an issue because calls and changes to plans I assumed were recorded (phone). In my mind I had nothing to worry about until the contract expired.

So after received this extraordinary bill, I called Billing and explained that there was a mistake. They advised that there was no mistake and according to their system records I had been billed correctly. I explained the plan details I thought I had and they advised that I had started my plan in June but that no other changes where made. Now, I can daydream but I don’t day dream about calling my Telco.

The guy on the phone was obviously only reading what was infront of him. I insisted that I had made the change of plan. He insisted that there was no record of it. All I have is a record on my phone bill of calling Telco sales line and staying on the line for an extended period. No written record of the change.

He offered to change my plan and see what he could do about the large bill. I obviously didn’t want to pay$320 of it. He returned and advised that the Telco what meet me half way, so we would split the bill. This was all because I had such a great record. Always paid my bill and on time. Loyal customer that I was.

Now he made the point that they don’t do this for other regular customers, but was making a special exception for me. Lucky me. Confused, angry and with no choice I agreed.

So what does loyalty mean to your business. To this Telco, after 16 years of being a good customer I was worth about $10 per year. Looks like I have used all of that up in one go.  That is 1% of what I think I have paid them in all of that time.

If you stand in front of your staff and tell them to build loyalty within your customer base, put a plan in place that ensures the customer experiences the value of this loyalty. Otherwise, here one day gone the next. My Telco has certainly failed in this regard.