As I am in the process of writing a response to Boost Mobile‘s recent major downgrade in its Boost Dealz app, I was struck by the lack of customer loyalty on the part of companies. They expect us to be loyal to them, but do nothing to encourage our loyalty. If anything, they often do things to discourage customer loyalty. Why should a new customer get a better deal than an existing customer? It costs a lot more to gain me as a new customer than it does to keep me as an existing customer, and that’s true if you don’t offer me a better deal as a new customer. I used to be a Boost Mobile customer several years ago, but they did enough things to discourage me remaining a loyal customer so I left them. I only came back to them last year after the Boost Dealz app made it worthwhile to get inexpensive unlimited talk (as cheap as $10/billing cycle if you max out the $20 credit and go with auto-pay for the $35 plan which includes unlimited talk and text and 3 GB LTE with unlimited slower data after the 3 GB LTE runs out).
A handful of companies are willing to reward customer loyalty. For example, one company offers several new paid customer sales/year, but with a twist. As long as you keep renewing, you keep the sale price. For example, the company offers a sale price of $29.95 (regular price $59.95/year). If you go with the sale price, the company agrees to make that your renewal price as long as you renew. Sadly, that’s more the exception than the rule as most companies would only honor the $29.95 for the first year and then charge you the $59.95 once the original term expired.
I had a disagreement with a small DNA company and the Customer Support person responded, but she also forwarded the e-mail to a third person. He responded, but he left out he was the CEO of the company; I thought I was talking to either her boss or a mid-level manager. We exchanged several e-mails and he never let on who he was. I found out when I researched the company. His solution was to offer me to beta test the Android and PC versions of their company’s app and refund my money at that time as part of being a beta tester. A larger company would have been unlikely to have the CEO or any upper manager personally respond, much less offer me a beta test solution. Since that time, I was able to get a friend who has a compatible iPhone to view my results and send me screenshots.
There is plenty of research on how much it costs a company to lose customers although much of the research doesn’t take into account the additional downside when you lose a customer to a competing company. With cell phone companies, you can often see the benefit when Company A loses X number of customers and those customers are picked up by Company B or by Companies B, C, and D.
Getting back to DNA testing, 23andMe had a solid lead for a number of years, but Ancestry was able to take the lead because it made changes to some things and 23andMe was slow to respond. Also, 23andMe made the unwise decision to ignore repeated requests from the FDA that led to other problems.
I remember when Google Plus first came out, some friends dumped Facebook, pointing to how Facebook had overtaken MySpace as to why Google Plus would overtake Facebook. I pointed out the key difference and why I believed Google Plus wouldn’t overtake Facebook. MySpace was number one, but it didn’t take the threat of Facebook seriously when the company showed up. Facebook has done a good job of responding to potential rivals by addressing a threat as serious. It’s why Facebook is still number one and Google Plus never made it anywhere near the credible threat it could have been. Does that mean Facebook will stay number one? For a while, yes. However, at some point, one of its rivals will figure out a way to take the number one spot.
Microsoft – I remember when Internet Explorer (IE) accounted for 95% of the browser market. Microsoft went the same route as MySpace and assumed they would always be number one. They continually ignored requests for improvements made by many who used IE. Initially, they didn’t have much competition, but Google Chrome and Mozilla’s Firefox changed the equation. The two groups listened to what customers wanted and provided many things that Microsoft wouldn’t add to IE. It’s weird because Microsoft had no problem adding a bunch of features to its Office products (Word, PowerPoint, Excel, Access) requested by a small number of users. I am typing this blog post using Firefox and I frequently use Chrome as Google wants me to use it for certain functionalities. I rarely use Microsoft Edge to browse the Internet. Imagine if Microsoft had chosen to listen to its customers, they could still be number 1 in the browser category. Instead, they tend to be much lower in the ratings depending on who you use to do the rankings and how the rankings are done.
Likewise, Apple used to be number 1 in the cell phone market. They wrongly assumed ignoring customer requests and requiring customers to buy new devices instead of allowing upgrades would let them stay number 1. Want more memory on an Android device? You can usually buy a new memory card if you haven’t maxed out your phone’s memory. Cost varies, but usually less than buying a new phone. Want more memory on an iPhone? Buy a new phone as Apple believes they know better than the customer. Is it any wonder that Android went from a blip on the radar to being number 1 in phones?
In my examples, I am not saying the companies that supplanted the other companies always do the right thing, but they recognized the competition wasn’t listening to customers and took a chance.
If you want to stand out as a start-up company, look at what your competition isn’t doing and figure out an affordable way to offer the product or service to their customers. If you really want to stand out, treat customer loyalty as something that is hard to get, easy to lose, but important to the long-term survival of your company. Don’t take customer loyalty for granted or it will come back to haunt you. For those with cell phone service, how long have you stayed with your present provider? This doesn’t apply in some areas if they are pretty much the only affordable game in town, but in most decent sized population centers, you can find the major companies (T-Mobile, Verizon, AT&T, Sprint, TracFone) and various MVNOs that use one or more of the major companies’ networks.
I have used TracFone for several years now. I wasn’t a fan of it in the beginning, but it has grown on me. Some of its major positives involve its PAYGO (Pay As You Go) option. its PAYGO system, you get X amount of talk, text, and data depending on how much you spend. In my case, I had a triple phone and as long as I purchased triple cards, I gained the tripling. With my most recent phone upgrade, I bought it more for the extra talk/text/data (TTD) than I did for the phone. The new phone was an improvement over my old phone, but the extra TTD was only slightly more expensive than what I paid in nine months for a lot less TTD ($54 for 540 TTD under my previous buying pattern compared to $60 for 4,500 TTD). I purchased Boost Mobile as an alternative back-up, but wasn’t sure if I would keep it. That’s one of the main reasons I didn’t dump TracFone. With my current TTD balances, I could easily last through my April 2020 expiration date. I expect to renew before April 2020, but I like the option of delaying it if necessary.
After the latest downgrade in points Boost Mobile instituted last month, I will probably be dropping them as the rewards program took a major hit that made it very unattractive to earn enough points in a reasonable amount of time. I am looking at other options since I like having a reasonably priced back-up or main phone. With Boost Mobile, it became my main phone line because it had unlimited minutes and I could often get the price down to $10 per billing cycle using the rewards system. CellNUVO offers a rewards program, and it has some positives that Boost Mobile didn’t have. For example, CellNUVO lets you enough points to fully pay for your monthly service. Boost Mobile only allows a maximum of $20 credit earned during a billing cycle. A while back CellNUVO made a similar blunder to what Boost Mobile is doing. They cut the points available by a large factor. However, they either lost enough customers or enough revenue that CellNUVO decided to improve the rewards program. Here’s hoping Boost Mobile takes a hint, but I don’t think they will do it timely. CellNUVO allows you to earn as many points as you are willing to spend the time to earn. I need to work on a CellNUVO post as it has enough big changes to its system over the last year.
My suggestion to Boost Mobile and other companies is take customer loyalty seriously. Realize why it is important to your bottom line to take it seriously and recognize what happens when you ignore it. Because if you don’t, a current or future competitor will take customer loyalty seriously and cut into your market share in a significant way.