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The Value of Lifelong Customers (and How to Get Them)


I was in a strategy meeting today with the head of online marketing at an accommodation reservations company. They’re kind of a big deal, but for the last two years they’ve been getting at least three complaints a day from members of the public who have tried to use their system and been pissed-off because some of the prices they were initially being quoted weren’t, in fact, the prices they would be paying. (I won’t bore you with details, but basically, they were showing a list of hotel rates from a particular source, but they were often three days out of date).

The head of online marketing is a pretty switched-on guy, and he knew that pissing people off was the best way to ensure they never visited his website ever again (you don’t want to annoy any customer, but you especially don’t want to annoy tech-savvy early-adopters of your product who have the potential to tell hundreds of others). He’d been having trouble convincing the CEO that the system had to change because there was a lot of development cost involved, but finally, after a year of trying, he’d got the change approved and a new system was in place that showed accurate prices. He had been conviced that the change would result in more sales, but he was at a loss because after a few weeks, the conversion rate had barely shifted at all. The GM told him that he’d have to break the news to the tech team that the costly change he’d implemented hadn’t been effective and it had been a bit of a waste; he was disappointed.

“But…” I said.

“I’ll bet your returning visitor numbers are up.”

His eyes lit up: “Hmm?”

“That’s your metric.” I told him. “I’ll bet you any money your returning visitor numbers increase dramatically over the next few months because people are going to be much happier with your product and they’ll want to come back. They’ll probably even tell their friends. And once you get more and more returning visitors, your conversion rates are going to keep going up because they’ll stop shopping around as much.”

This was good news.

Very good news. I think he wanted to hug me…

If there’s one web metric you want to see curve upward, it’s your returning visitor numbers. More new visitors are great, but what you really want to see are more people coming back. 1,000 visitors who come back ten times are worth far more than 10,000 visitors you never see again.

The best way of getting them to come back is figuring out why they’d want to leave in the first place; think about what they’re NOT getting and give it to them. If the solution sounds expensive, think about what a lifelong customer is worth to you, over time, and I’ll bet you’ll change your mind.

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4 Responses to The Value of Lifelong Customers (and How to Get Them)

  1. Julian Cole says:

    Great point and a figure that I have not looked a lot at myself but am going to now be more interested in on my own personal blog.

  2. Andie says:

    This seems silly on the part of the CEO. Absolutley ignorant and stupid actually. Imagine walking into a car dealer and looking to buy a car to find out it really only comes with 3 wheels.

    The wheel putter-onner-er machine in Charlie Chongs factory just didn’t work properly. Not the dealers fault right?

    So you – the customer, got a bit excited at this potential car, and then were let down and disappointed. Your brand quality perception is now below (-10) where it was to begin with not even knowing about the car in the first place (0).

    Well the car dealer decided to go for a different model of car now… one with four wheels and it works fine. Does this mean you’ll just go rushing back? No. Because he cheated you out once, you still don’t trust the product. Your perception of him is still below (-10) that of a person who has never been to his website… I mean, car dealership (0).

    Essentially all this CEO is doing now is offering the product he promised he was offering to begin with. One would argue he deserves to lose customers over it, not expect to gain more when the problem is rectified.

    He was offering a dodgy product and hoping that at least x many people wouldn’t notice.

    One would then argue that in order to get these previously disgruntled customers to return, he has to offer them MORE than what was originally expected – i.e. compensation (to bring them up to +10 – you don’t want them to just go back to 0, its as good as a minus). You could just send these complaining customers a 10% off thingmo – but statistics show for every one customer that calls to complain – about 10 or so are pissed off but don’t. They are probably going on to and then telling their buddies to do the same.

    This company needs to regain consumer faith in their product, and encourage the use of their now functioning product.

  3. admin says:

    You’re spot on Andie. They aren’t going to win back any old customers by just fixing a problem that shouldn’t have been there in the first place; my point is at least they shouldn’t lose as many new ones! That being said, they are working on getting to +10 with a revised version of their product, so it’s good news all ’round.

  4. Andie says:

    Thanks Matt… watch me blog! No hands!!!

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