I just finished deleting Opinionbypen. No, not this version of my blog obviously. I’m talking about the version hosted at GoDaddy. This year when my renewal rolled around, GoDaddy rewarded my tenure with a rate increase. Having been with then for five years, they could have rewarded my customer loyalty with a discount. Instead they increased their rate and I moved on. When it came to customer retention, GoDaddy was relying on my laziness.
I don’t want this to be a comparison between GoDaddy and InMotion, my new host. I’ll simply say that the introductory rate for two more years of hosting at InMotion was less than GoDaddy wanted for one year. Not to mention several perks such as improved speed. Check out my FromtheDoghouse.com. This is hosted on the same site as Opinionbypen and used to take several minutes to load.
Now, I know that in two years, InMotion’s rates will go up to almost that of GoDaddy’s. If I’m still in the blogging business, then I’ll probably be finding a new hosting company. I also know that if I called GoDaddy and complained, they would probably have given me a discounted rate but why should I have to? Especially when there are a number of other companies offering me a better rate with more bundled services. GoDaddy needs to work on its customer retention program.
When Sprint kept increasing my bill, I moved to Verizon to take advantage of their introductory rate. Having moved on, I can only giggle when Sprint sends me flyers telling me how much they miss me and what wonderful offers they have for me to come back. Moving to Verizon showed me how much I was missing out on with Sprint. They should have worked harder to keep me from exploring other companies. Sprint did nothing in the way of customer retention except to tie us into two year contracts forcing us to stay.
The concept of customer retention isn’t limited to the service industry. I’ve owned a string of Dodges over the years. Say what you will about Dodges but that customer discount comes up every time I buy a new Dodge. On a rational basis, I know that every sale is looking at the bottom line. Are they making money? The sales manager always has the last say but tell me honestly, doesn’t the sound of a customer loyalty bonus give you a nice warm feeling?
On the flip side, take a look at your cable bill, that is if you still have one, has it done anything but go up? Have you had any choice in those rate increases? Did you get added benefit? Don’t bother answering, we both know the answer. And yet, if you change providers, your rate will drop magically for the next year. I don’t know about you but to me it looks like I’m subsidizing all the new customers while I look for a new provider. Any wonder cord cutting is reaching astronomical highs? We’re tired of being ripped off.
Nor does it stop at consumer goods and services. A very long time ago, I was employed at $1.80 an hour (I told you it was a long time ago). Want to guess what I did when I found out that new hires were being started at $2.10? Yes, I could have confronted management but why. In my mind, management was taking advantage of me. It was far more satisfying to take the same position with a different company for $2.10 an hour.
That experience brings up another aspect of customer loyalty. When we feel we’re being cheated or taken advantage of, it’s only natural that we want to get even. It would have taken a far better man than me not to have felt a sense of satisfaction when I cancelled Sprint. Their focus was entirely on gaining new customers, not retaining the ones they had. As I said earlier, I still start giggling when they tell me they miss me.
I’m trying to improve the engineering content on Opinionbypen so let’s do some math. Fortunately, I have no idea on actual numbers, I’ll have to make up some. Assume you have 1000 subscribers to your dog toy of the month business at $20 dollars a month. We’ll also assume your costs are $10 a month per subscriber. You’re making $10,000. It’s a dog eat dog world out there so you offer a 40% discount to all new subscribers as long as they sign up for a year. You get 200 new customers but because of the discount, you’re only making $1 a month on them. Net income $1200 per month.
Oops, we forgot to factor in all the disgruntled customers still paying $20 a month. If only 2% of them leave, (20 customers), you’re back to $1000 a month. Customer retention seems really important. Ever wonder why Amazon keeps adding to their Prime program? One answer, customer retention. Too bad it was ignored by GoDaddy.
Update 6/15/2018: If this post has inspired you to to take a hard look at your own business to improve customer retention, let me offer this link as a starting point, https://www.tenfold.com/cti/how-click-to-dial-helps-microsoft-dynamics-crm-users-achieve-sales-and-service-success. I’m not associated with them and I’ve never used their sevices but they did read this post and offered their solution. It’s a starting point.
The rent increase was the last straw
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