The Case for Customer Lifetime Value…


Just when things were going great…

Not long ago, I praised a certain  Big Satellite Company  for the outstanding customer experience I had when moving across town (despite some other shortcomings – full article here).  This past month, with a single billing related event, Big Satellite Company almost destroyed our relationship forever.  Let me tell you a story.

Thirteen years ago

As cable TV was riding high and the internet was still a baby, I placed a bet on who I wanted to deliver television content to my home.  Primarily due to the exclusive availability of a certain sports programming package, my bet was placed on (what is now) Big Satellite Company.  For over a decade, through four moves in two states, my chosen television delivery partner provided a fantastic experience in all facets of our relationship, to include my most recent move (full article here).

This year, as a result of some uncertainty with the professional sports league featured in the programming package, Big Satellite Company made a wise move (in my opinion) by not automatically renewing customer subscriptions for this package until the leagues disputes were settled.  However, once resolved, subscribers like myself were forced to contact Big Satellite Company and re-subscribe to the package.  This was not the end of the world assuming I was able to simply renew the subscription, at the previously established renewal rate.

Herein lies the rub

As I prepared to renew the programming package, the pricing I was offered via the website was approximately $85.00 more than what I had paid for previous seasons.  I contacted the customer service center via telephone and was offered a statement credit of $5.00 per month for the next 12 months.  That still left us $25.00 apart from what I felt was fair.  As I was on the telephone, I looked into my account billing history, and proceeded to inform the service agent that as a 13-year subscriber, my customer lifetime value to date exceeded $23,000 and I asked her if she was prepared to let me walk over $25.00?  She responded with a counter offer of additional free services and content, and ultimately got us to where we were only $5.00 apart.  I asked again, are you ready to let me walk over $5.00?  She was.  At this point, I decided to perform an experiment by NOT asking for a supervisor and simply saying “no thank you”.

Everyone who heard this story said “you should have asked for a supervisor, you would have gotten what you wanted” – to this I say, the companies to which we send our hard-earned money in exchange for services, need to have more respect for their customers. The protocol for solving a customer problem should never end with the customer leaving.  I argue that the customer service agent should have proactively escalated me to a supervisor with more authority as opposed to letting me walk.  Most consumer technology services companies (i.e. phone, TV, internet) seem to be in a customer acquisition arms race, as opposed to focusing on serving the customers they already have.

So how does the story end?

Last week, approximately 3 weeks after the incident described above, I was contacted by a “manager” from Big Satellite Company who proceeded to offer me the desired programming package renewal, discounted beyond what I paid in the previous years, plus the additional services and content from the previous negotiation.  Apparently he is one guy who knows it is cheaper to keep a customer than acquire a new one – it’s a shame it took 3 weeks to escalate through the CRM system.  This could have easily been avoided if Big Satellite Company had a robust customer segmentation system and armed the customer service agents with a well thought out “next best offer” strategy for retention of key accounts – maybe even immediately pushing my call to a more senior or experienced agent given my tenure and status.

Have you had a similar experience?  Or is your company losing customers faster than you can acquire them?

Tell me about it.

Did you know that I have now posted more than 30 articles on this blog?  If you read and enjoy the content, please don’t be afraid to Comment, Share, Like, Tweet, +1, or whatever you do.  I would greatly appreciate the feedback.

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