Thursday, October 29, 2015

Leave Well Enough Alone if Well Enough

After I paid off my smart phone under my Verizon contract, my monthly bill didn’t go down. I called Verizon about it, and as soon as I responded to the prompt by punching in my phone number, an enthusiastic recorded voice told me I qualified for a phone upgrade. But I wanted a fee reduction, not a phone upgrade.
     Pressing another key brought me to a customer service rep who, after hearing my request, said my bill amount would be reduced and I’d be given a credit for the past overcharge. He added, “Wait, I think I can find you another way to save if we change your monthly data transmission allocation!” “Yes, I can! Your bill will go down another $10 a month.”
     I thanked the customer service rep profusely. I was thrilled. Until I started thinking about it some more. What if I hadn’t called? I’d have continued to pay too much.
     All this reminded me of a consumer behavior study based at Columbia University and University of Pennsylvania. In collaboration with a wireless communications retailer, the researchers compiled a list of thousands of the retailer’s customers who could lower their monthly fee by changing their monthly plan. Some of these customers were contacted with news of this opportunity. The others were not.
     Of those contacted, about 10% cancelled their service within three months. Of those not contacted, about 6% had cancelled. It appeared that being told they could have been saving money led to subscriber disquiet.
     Still, there’s an important distinction between my Verizon experience and the experiences of the subscribers in the Columbia/Pennsylvania study: I initiated the contact with the retailer. It may have been the contact by the retailer which precipitated the customer dissatisfaction. Once your customers conclude that you’re a competent services provider, they usually prefer not to keep shopping around. The services provider is pleased to have the customer keep coming back, and the consumer is pleased to feel comfortable having a services provider to keep coming back to. But being reminded that there are price or outcome differences among services providers disturbs the inertia.
     This is different than with product sales, where a surprise special generally boosts customer loyalty, according to University of Arizona, Arizona State University, and University of Pennsylvania researchers. When you’re doing well enough for the services customer, it can be best to leave well enough alone.

For your profitability: Sell Well: What Really Moves Your Shoppers

Click below for more: 
Exude Conceptual Fluency in Services Retailing
Dazzle Customers with Surprise Gifts
Suggest Ways Shoppers Can Save Money

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