Commentary: Managing the Customer Service Life Cycle - Modern Distribution Management

Log In

Commentary: Managing the Customer Service Life Cycle

Every business tends to put on a full-court press to get customers in the door. Many have processes to build existing customer relationships into larger ones. Fewer businesses have a process for saying goodbye or retrieving ex-customers. But in tightening markets, distributors often see customers jump to a lower-price competitor. How often do you experience a customer returning after a year, or after they realize the better value your company delivers? What percentage of lost"customers return?


These issues came to mind following an unpleasant experience closing the account with our credit card processor. I switched to a more cost-competitive service after four-plus years (three-year agreement with automatic annual renewal) with an Omaha-based affiliate of my local banking ...
Author
Date

Every business tends to put on a full-court press to get customers in the door. Many have processes to build existing customer relationships into larger ones. Fewer businesses have a process for saying goodbye or retrieving ex-customers. But in tightening markets, distributors often see customers jump to a lower-price competitor. How often do you experience a customer returning after a year, or after they realize the better value your company delivers? What percentage of lost”customers return?

These issues came to mind following an unpleasant experience closing the account with our credit card processor. I switched to a more cost-competitive service after four-plus years (three-year agreement with automatic annual renewal) with an Omaha-based affiliate of my local banking relationship.

My final statement included an early termination fee. So I called to find out what that meant. Imagine my surprise to find out that if you terminate before the anniversary date, you’re charged (I learned later that the fee is a “compensatory payment”to mitigate the lost revenues through the contract period. Now there’s a value-based revenue model!). The patient customer service representative explained that it was company policy to not inform terminating customers of that fee because it was part of the signed agreement. That’s not entirely accurate, as it was not on the page with the schedule of fees that I signed. But I did sign that I would be bound by the company’s terms and conditions, all 74 pages of fine print in a separate document. Shame on me.

I said that I felt the policy was a sleazy way to treat good customers of four years and requested to speak with a supervisor. That’s when I learned of another policy – they no longer escalate early termination fee calls to supervisors. Smart supervisors! Why waste time dealing with someone who doesn’t want to be a customer anymore?

My next request was for the name and phone number of the president, naively thinking (under elevated blood pressure conditions) that the buck stops at the top. No can do for security reasons. But I can fax or mail to “Attn: Office of the President.”

I’ll make a bold guess that I am not one of their largest customers. But there are ways to communicate and market to departing customers -even small ones -in a positive way. I’d also argue there are ethical ways to end contracts that keep the door open for renewing the relationship under changed conditions. Ex-customers can be the best prospects, especially if the experience, including leaving, was positive.

Share this article

About the Author
Recommended Reading
Leave a Reply

Leave a Comment

Sign Up for the MDM Update Newsletter

The MDM update newsletter is your best source for news and trends in the wholesale distribution industry.

Get the MDM Update Newsletter

Wholesale distribution news and trends delivered right to your inbox.

Sign-up for our free newsletter and get:

  • Up-to-date news in a quick-to-read format
  • Free access to webcasts, podcasts and live events
  • Exclusive whitepapers, research and reports
  • And more!

2

articles left

Want more Premium content from MDM?

Subscribe today and get:

  • New issues twice each month
  • Unlimited access to mdm.com, including 10+ years of archived data
  • Current trends analysis, market data and economic updates
  • Discounts on select store products and events

Subscribe to continue reading

MDM Premium Subscribers get:

  • Unlimited access to MDM.com
  • 1 year digital subscription, with new issues twice a month
  • Trends analysis, market data and quarterly economic updates
  • Deals on select store products and events

1

article
left

You have one free article remaining

Subscribe to MDM Premium to get unlimited access. Your subscription includes:

  • Two new issues a month
  • Access to 10+ years of archived data on mdm.com
  • Quarterly economic updates, trends analysis and market data
  • Store and event discounts

To continue reading, you must be an MDM Premium subscriber.

Join other distribution executives who use MDM Premium to optimize their business. Our insights and analysis help you enter the right new markets, turbocharge your sales and marketing efforts, identify business partners that help you scale, and stay ahead of your competitors.

Register for full access

By providing your email, you agree to receive announcements from us and our partners for our newsletter, events, surveys, and partner resources per MDM Terms & Conditions. You can withdraw consent at any time.

Learn More about Custom Reports

Request a Market Prospector Demo

  • This field is for validation purposes and should be left unchanged.