Category — Uncategorized
The High Cost of Free Customers
Free customers are like the “World’s Largest Christmas Stocking.” They look good from the outside, but when you start digging in, you find that the value is missing.
A few years ago, I won a raffle for the “World’s Largest Christmas Stocking.” It was so big I needed help carrying it to my car. It measure seven foot tall, three foot wide, and was filled with toys. Winning it was fun.
Opening it was disappointing.
Instead of toys, it was filled with accessories. Every item included required additional purchases to be functional. The children’s excitement transformed into annoyance before the stocking was empty. “Bummer” was the word of the day.
When you analyze your free customers, acquired via the Internet, expect the same results. [Read more →]
How Are Your Company’s Vital Signs?
How is business? Are your sales up or down? Are your costs holding steady or increasing daily? Do you have enough information available to accurately answer the question? Are you SURE?
If your answer is based on sales, costs, average order value, response rates, sales per foot or any of the traditional metrics, then you are missing part of the puzzle. You have to go below the surface to find out how well your company is doing.
You need to understand your customer dynamics. How and why are they shopping with your company? Where are they coming from? What are their intentions? Are they interested in a relationship or simply a hit and run shoppers? Are your customers gaining or losing value? [Read more →]
Dear Jane Customer, It has been nice knowing you.
Dear Jane,
We value you as a customer, but you don’t provide enough business to justify the few bytes your information occupies on our server. We are providing this opportunity for you to keep your frequent flyer miles. Since you haven’t flown with us for a while, you have 30 days to use the travel miles you have earned.
If you don’t use the points within the deadline, you will be allowed to purchase them back at a rate that costs as much or more than a full price ticket to some destinations.
Sincerely,
Your Airline Friends
Maybe I’m wrong, but aren’t frequent flyer programs supposed to encourage customer loyalty? Airlines and other companies expect customers to be faithful and choose their services over the competition, because they provide an opportunity for free flight. Then, they change the rules at their discretion. Loyalty, between company and customer, is a two way street. It requires both parties to be committed to each other. [Read more →]
