Punishing Loyalty: Rewarding First-Time Customers

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Let’s face it: [Tweet theme=”tweet-string-underlined”]Nothing says “We value our longtime customers” like making a discount available only to first-time customers.[/Tweet].

Let’s call it the First-Time Flyer approach: instead of encouraging loyalty among customers by rewarding them for it, the First-Time Flyer approach seeks to reward new customers for abandoning one of their competitors.

The mindset which focuses on gaining new customers by imposing costs on long-established ones is widespread.

You call an internet service provider to arrange web access in your new home or apartment. It’s explained to you that as a first-time customer you are eligible for a special discounted rate, one not available to those chumps who have been customers for as long as there’s been an Internet.

The next time you visit your local grocery store, consider the “15 items or less” sign above the check-out. Set aside that it should read “15 items or fewer“: the mindset encapsulated in such signs is crystal clear: “We aim to reward those the most who are profiting us the least”.

Imagine shopping at a grocery store where such signs are replaced with ones which read “Customers Shopping With Us For Three Years Or More”. I’d wager that such a sign would encourage first-time customers to become longtime customers. (I’d also wager that the novelty of such a rewards program would prompt some customers to take pictures of such signs and share them on social media.

Then you’re really in business.

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11 thoughts on “Punishing Loyalty: Rewarding First-Time Customers

  1. For utilities like Internet, first time customers are more likely to switch than established customers who typically don’t pay much attention. So I’m not sure that it’s a bad idea.

  2. Good point! I’ve had similar complaints in a previous church, but hadn’t thought about this implementation in the business realm.

  3. I once attempted to replace a broken cell phone and upon visiting my (then) provider, I was told that to replace the phone I had purchased just under a year prior for under $100 would now, as a loyal two year contractually obligated customer, cost me $450. I pointed to the phone I coveted sitting above a sign that touted a price of $99. “Oh no, that price is only for new customers.”. There you have it.

  4. As a long time customer, all you have to do is ask. Unless it’s Comcast, then you’re just screwed.

  5. I don’t think that they’re interested in their customers at all. They are interested in an attrition rate (what percentage of customers that leave every month). But that’s just a rate or percentage. Not a person.
    Instead of focusing on long term customers, they’re focused on quarterly earnings. Anybody whose worked in corporate marketing knows that.

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