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 ...

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.

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