An example of not being cheap.

sirius I have talked about the importance of not being cheap before. When you’re cheap with your customers and your customer service, you find yourself losing a lot of respect from customers.

I read an interesting story about Sirius Satellite Radio the other day. For them and this particular experience, being cheap actually ended up making them more money.

Here is Eric’s (the customer’s) story: His car was broken into and his Sirius radio was stolen. As such, he wanted to have the radio deactivated. He called the customer service line and they offered to make it so he could listen to Sirius programming online. The really interesting part of the story, though, is that Sirius offered to send Eric a new (actually refurbished) radio for free. On top of all that, they were going to give him three months of free service.

Sirius is smart when it comes to retentions. Instead of hassling Eric about canceling, they offered him a nice deal that would motivation him to stay on as a customer. They know that if Eric had canceled his subscription, even temporarily, the chances of him buying a new radio and subscribing again would go way way down.

Sirius figured out that it was worth a refurbished radio and three months of service to keep Eric as a customer. This isn’t something that every company gets. In fact, it is something that very few companies get.

Something that is important to note, though, is that Eric was not canceling because he was an unhappy customer. The effectiveness of free stuff goes way down when the customer is unhappy. If customers are unhappy, they want to be happy and a bribe isn’t a sure fire way to fix that. If they are canceling because of another reason, like because a relevant product was stolen, then the free stuff (especially when it is really relevant, like in this case) becomes a lot more effective.

Sirius’s story shows that there is a classy and highly effective way to do retentions. Not every retention story has to be the one like Vincent Ferrari’s AOL story.

By the way, sorry for the late post today. I’ve been busy all day and the time got by me.

One Response to “An example of not being cheap.”

  1. Envision Blog said:

    Jan 04, 08 at 4:18 pm

    Five For Friday…

    Here are a few great contact center & customer service links for the close of the first week of 2008…