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What Price Loyalty?

6th June 2014

The economic crisis, says Claire Moulds, has served only to show that for too many organisations the customer relationship is a one way street. They sell and we buy…

At a time when the gap between the cost of living and household income remains a source of anxiety and concern for many, it would be logical to assume that businesses across the UK would be doing everything they can to help their long standing, repeat customers to make the family budget go that little bit further.

If only that were the case.

As long as profits remain unchanged, companies now seem content to wave off those who can no longer afford their goods and services without so much as a second glance.

Why is so little value placed on loyalty these days? When I was at university in the 90s, studying business, there was a huge emphasis on customer retention, as well as acquisition. Now, though, it’s all about getting new people to interact with a brand rather than rewarding those who have loyally stood by it for years.

It seems more than a little foolish. After all, not only does it cost on average six times more to attract a new customer than it does to keep an old one but a happy, content and loyal customer is going to be a valuable advocate, promoting the company to their family and friends as being ‘a good place to go’. In the age of social media positive word of mouth and glowing recommendations are the holy grail, so why do so many brands insist on taking their existing customers for granted and treating them so badly?

Worse still, why do we put up with it? Why does being loyal mean paying more and receiving less?

My husband came to the end of his mobile phone contract and wanted to upgrade his existing iPhone for a new one. Having been a customer of the same mobile phone network for over 15 years he expected to ring up and organise a new deal with relative ease. Not so.

It took over five hours of phone calls, online chats and emails during the course of a day to negotiate a contract. Moreover, the customer service representatives were rude and dismissive and kept passing him from pillar to post, ‘losing’ him several times in the process. Worse still, he was told that being a long standing customer counted for absolutely nothing and that he would get no better deal than the one they were offering to people switching from a different provider.
What kind of company views a customer who has spent (at a conservative estimate) around £8,000 with them over the years as exactly the same as someone who has never spent a penny with them and who may just up and leave at the end of their first contract?
And we’re not the only ones feeling used and abused.
Friends recently decided to get some competitor quotes for their home insurance for the first time in over a decade and were surprised to find that many companies were offering them comparable cover for hundreds of pounds less than their renewal quote. Having rung their current provider to point this out, they were told that they wouldn’t match any competitor quotes and wouldn’t lower theirs either.

Peeved at such poor treatment they decided to contact the company again as a ‘new’ customer… and got a quote £400 cheaper. When they went back to customer services and tackled them, the quote was matched without question – but no explanation was given as to why their renewal quote should be £400 more expensive than a new customer pricing up the same property. Nor was there any hint of an apology.

I can understand why some existing customers stick with a supplier despite rising prices. After all, if the service is good and the brand is reliable there’s a willingness to pay a little more. Equally, if circumstances mean there is an absence of choice, then there’s little point in tackling the supplier about their cost. For example, we live in a semi-rural area and know from friends who work in the IT industry that this limits us to only one broadband supplier if we want a reasonably fast service. As we effectively orchestrated our own predicament by buying the house I can’t blame the company in question but it doesn’t make the ‘special deals for new customers’ that they keep popping through our letterbox – even though we’re already signed up – any less of a bitter pill to swallow.

In many cases the unrepentant attitude of a brand’s call centre representative only serves to make a bad situation worse. After all, loyal clients used to be able to rely on a fair price and good customer service in return for their repeat business. Now now it seems we cannot expect either.
The rise of the call centre – there are now 5,675 in the UK alone employing over 1,125,000 people – has divorced buyer and seller, as the face-to-face discussions that would once have taken place across a desk or counter have been replaced by faceless (and soulless) interaction. The customer has been demoted from ‘king’ to ‘opponent’ with every conversation an uphill battle punctuated by ‘no’, ‘I can’t’, ‘I won’t’, ‘it’s not my problem’ and ‘you’ll have to speak to someone else about that’.

When I feel ripped off or poorly treated – or both – the last thing I really want to do is to speak to an ill-informed and unhelpful customer service representative about it, especially after I’ve waited in a queue listening to the uninspired ‘on hold’ music punctuated by the recorded message telling me that my call is important to them for 20 minutes. I know that the company needs to know how I’m feeling, otherwise the service will never improve, but I also know that nine times out of ten it will lead to nothing and that I’m wasting my time – while racking up a huge phone bill to boot.

It’s the ultimate no-win situation when dealing with customer services is as bad as the service itself. No wonder so many of us selectively choose who we go into battle with, resigning ourselves to less than we deserve from the rest as it’s just too stressful to deal with them all. Sadly though, when we don’t complain, companies mark us down as being happy and mistakenly believe that they are doing a good job. It’s only if we all continually feed back our dissatisfaction that we will finally get the service we deserve, and at a reasonable price.

Customer service was once an art form; now it’s been reduced to a script – and a most unhelpful one at that. The companies that will survive are the ones that realise that far from being an ‘add on’, customer service should be at the very heart of what they do.

Having said that, the one in ten who do listen to me – the ‘smart companies’ – lap up my feedback, apologise and rectify the situation immediately. They recognise the value of a happy customer, want to keep me that way and are always keen to learn where they’ve fallen down and how they can improve.
A recent customer satisfaction survey by consumer organisation Which? highlighted those companies who do still pride themselves on delivering exceptional service, with cosmetics firm Lush taking top spot on a score of 88%. Lakeland, First Direct, John Lewis and the RAC were also rated highly. In contrast, Ryanair, Npower and Talk Talk came out with the worst ratings.

But what can we do to encourage good firms to maintain their standards and to persuade bad firms to up their game? Over the last 12 months I’ve made a conscious effort to praise good service wherever I can, either by completing satisfaction forms, mentioning it to a manager or contacting head office to say what was good, who went the extra mile and how happy I am as a result. Yes, it takes a bit of time but obtaining consistently good service in life is as much about letting people know what they are doing well as telling them where they are failing. And only if we all pick up the phone, send a letter or answer a survey will companies realise how much many of them need to change their ways.

It’s time loyal customers made a stand to remind organisations of the power we wield and that their focus should be less ‘them, them, them’ and more ‘us, us, us’, given that we’re the ones who, ultimately, pay their wages…

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