We do a lot of sales coaching surrounding the topic of Customer Retention.  Our clients realized long ago that plain-old Customer Service was too short-termed to lead to significant success.  A study we performed for one client showed that while customer satisfaction could be upwards of 84%, a customer’s willingness to return was significantly lower (28%).  So what was the reason?  From our focus groups performed we realized that there were enough operational processes going “right” that would lead to customer satisfaction, however in the “big picture” there were few that often lead to customer retention.  In other words, regardless of how pleasant a sales consultant was, this couldn’t make up for not having sufficient inventory!

We often end up implementing a Customer Retention strategy that involves the following:

• Make certain that the foundation for Customer Retention is in place (Customer Service has taken place)
• Make it convenient/easy for customers to repeat their purchase experience
• Reward those customers who share their experience with others through referrals making purchases.

So all of this begs the simple question… What happens when a customer cancels their service and potentially may never return?  We had just such an experience involving DirecTV.  One of our staff members was a long time DirecTV subscriber (8 years).  However, Verizon FIOS just moved into their neighborhood and was offering some incredible deals for new subscribers.  As such, our loyal DirecTV subscriber jumped ship and headed to the red check-mark of Verizon!  That’s when it started to get ugly…

It turns out that most who call in to DirecTV to cancel their subscription are harassed to not only keep their service, but often at a lower price than they’ve previously been paying.  This opportunity to receive the same service for far less money infuriated our loyal customer.  Remember, they had been with DirecTV for eight years, and as they recalled their relationship each year the price seemed to go up!  However, our ship-jumper decided to move on to Verizon, so regardless of the begging or deal-making that was being offered it appeared as though DirecTV was losing yet another customer.

And then the final bill came… It reflected that the loyal DirecTV customer had apparently not been billed for two pay-per-view movies.  However, upon further review, the two movies were watched six months prior to them canceling the DirecTV service! Their records indicated that the movies were indeed watched six months earlier, and paid five months earlier as a result.

And this is where sales people get a bad name… Our now loyal Verizon FIOS customer called in to DirecTV to see what was going on?  The first person they spoke with tried to get them to reactivate their account.  The second person reviewed their records and said that because they were such a loyal customer they qualified for upgraded equipment.  The third person asked is there anything we can do to get you back?  The fourth person verified that there was no way they were coming back, and then said that the $8.48 bill would be “written off” because of the inconvenience!

So we started thinking, in what ways are you attempting to keep your defecting customers?  Our conclusion was that this DirecTV deceptive practice of Customer Retention should not be implemented.  Besides the ethical dilemma it poses, sending out a bill from services rendered and paid for is never a good sales course to follow!

Sam Palazzolo

Pathos Leadership Group