Brands, Stop Chasing New Customers and Ignoring Your Existing Ones

by Mack Collier


Now is a good time to be in the market for a new satellite television provider.  The two main competitors, Dish and DirecTv, are throwing all kinds of incentives at you.  iPad minis, free DVR upgrades, free Visa cards.  Free, free, free.

The catch is, you typically have to be a new customer to take advantage of these offers.

It’s backwards, and it’s bullshit. When you reward new customers instead of existing ones you are training your customers that it pays to leave you.  Valuing new customers and ignoring loyal ones basically mocks your repeat customers.

Many industries do this, especially when the space is dominated by 2-3 competitors with very similar offerings.  Companies have to constantly offer new and additional incentives for new customers because they aren’t giving loyal customers any incentive to remain loyal.

Rock stars typically do the exact opposite.  Fans are rewarded.  Fans get special access, they get VIP treatment.  They typically get the best seats at concerts, they are the ones that get secret shows, they are the ones that get first access to new products and breaking news.  With rock stars, new customers are ignored in much the same way that many markets ignore existing customers.

I’ve talked about this before, but you build loyalty and create fans with rewards, not incentives.  Offering me products if I will switch to your company doesn’t win my loyalty to your brand, it simply gives me an incentive to take advantage of the offer.  I may have to sign a 2-year contract to get all the goodies, but if you have ignored me and my business, guess what happens in 2 years?  I will switch to your competitor, because they just offered me prizes and incentives for switching.

You are training your customers to leave you.

It’s not about offering incentives for new customers, it’s about offering rewards for existing customers.  Because referrals from happy customers is a far better marketing tool for you.

If the goal is to acquire new customers then you need to follow the rock star marketing model: Focus on delighting your existing customers, with the understanding that this will encourage your existing customers to become fans who will bring you new customers.   

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