In larger firms, you'd think the incentive would be to account for the drop-off caused by eroded goodwill, but functionally there's a middle level manager who is using this spike in numbers to jump to another role before the piper has to be paid by his replacement. Even if the company blows up, he can lateral safely with his new title.
I think mileage may have gone up slightly but I'm still well below the norm.
Well, I guess AAA finally hit that "gap between your changes and the long term change in churn" for me. I dropped them for GEICO. But even before I left, I called them back and gave them a chance to match the GEICO quote. Their phone agent seemed to have no path in her script to consider or escalate this offer.
It sounds like we may need a catchy term for that gap you mentioned, the one where as a consumer I'm ready to jump but the alternatives (if any still exist) don't feel like they're worth the trouble. (I'm at that point with my cable internet provider.) Something like the "Recurry" or "Gamey Valley".
Be careful with iselect though, I think all their resellers use the same underwriter. I.E not real competitors.
We had little churn, if you stayed a customer after a slight rise, 90% stayed for the next slow rise.
Captive customers? Rubes?
Then, the inspector can buy the salvage car for pennies on the dollar, fix it, and sell it with a salvage title.
All these gimmicks work short term, until someone figures it out (like this article). But if everyone is doing it then it wouldn't make a difference I guess.
i.e. a collective labour and legal assistance group that has economy of scale and/or ML that's cheap enough for everyone and uses its userbase to collectively punish companies that uses belligerent gamifications against its customers by automating bill payments and underpaying every single bill by a small amount that makes it financially penalizing to resort to collection agencies etc.
A consumer protection equivalent of unions + zombie botnets.
But clients around generally clueless how to run businesses. So they either don't excersize their voting rights or they vote for incompetent managers.
One solution is cooperatives that have no operational assets and outsource everything. Then they still have bulk buying power.
The solution doesn't fix the problem, because the problem is that quality of business models just plain don't sample for customer goodwill - they measure sales metrics rather than feelings. So the sales metrics are gamed at the expense of the consumer feelings that create the metrics in the first place.
> Net Promoter or Net Promoter Score (NPS) is a management tool that can be used to gauge the loyalty of a firm's customer relationships
It asks one question:
> How likely is it that you would recommend our company/product/service to a friend or colleague?
The wikipedia article provides more details including criticism.
Instead you often get people trying to game their local NPS scores; not quite the same problem, but similar.
The term you're looking for is "brand". Measuring a brand's value is much more difficult than measuring sales, but it's not something new that no company do.
But why would they favor that? They are intelligently blind.
Its a side effect of an optimization function, basically. New customers are price sensitive. Loyal customers are.. loyal. They will buy anyway. Advertising is expensive, and discounts can be a cheaper way of getting them. If your decision framework is "do what brings the most growth by lunchtime" you will often end up with new customer perks.
If you have freebies and discounts to spread around, spending them on newbies will produce more sales.
Politcal campaigns often consider voters in reverse order to loyalty. Party members are guaranteed votes, so don't spend effort courting them. Party supporters need some attention, to bring them out. Fence sitters or potential conversions are courted vigorously.
Lots of tech "platforms" will be free for new users, cheap for small users and expensive for big clients. The big clients are more locked in, so it's hard to affect sales one way or another. New/small users are fickle, and more likely to respond to prices.
Banks have better rates for new customers, sometimes actual free money.
Its like when you don't put effort into dating your wife. It's not the right thing to do, but there are some difficult to avoid consequences to knowing she will go home with you regardless.
Fantasy I know.
Discounts for long term and importantly, low risk customers, are a way of securing future revenue by disincentivizing customers from shopping for lower rates elsewhere.
If your odds of noticing the bump, and caring enough to drop them were <80%, they still made money.
Hence the whole cat-and-mouse churning game.
Typically it emerges where "customer acquisition" is hugely expensive or important and this typically emerges when either (1) it is a winner-take-most-game or (2) the product is an ironic "commodity:" A product that is 90% standardized under the hood but has a sales oriented differentiation layer. EG, the underlying product is electricity, cable TV or money market stuff like insurance or loans. The company you deal with as a customer is a customer services, sales & marketing layer. Guess how they compete.
I have no interest in repeatedly shopping around for new providers for things like energy, telecoms, savings accounts and so on. I just want to give a company money in exchange for services and have them continue to provide that service with reasonable increases in price as inflation happens. I feel like I'm constantly being bullshitted – "Good news, we're reducing your savings interest rate!".
but… this will be the primary usecase of blockchain projects.
Players on markets agreeing to use one common protocol and compete for prices in real time.
It won't be the incumbent who wants to do this or change. (it never is) It will be the powerlaw distributed Number 3 to 99 who together are alone barely competitive but together as interesting as the main incumbent.
I give major props to companies that reward loyalty. IntelliJ, for example, offers discounted rates the longer you've been subscribed. It works for them because it's an incentive to never let your subscription lapse, and it rewards the dedicated end-users as well with cheaper prices.
For small businesses this type of service still pays. I know bars who hold tables for hours on a Saturday to save them for the regulars who come the rest of the week. But even there, loyalty is to the staff more than the owners.
The larger the company and the more detached the ownership, the less sensitive the company is to any negative effects.
Like gut flora, they can be useful to humans -- but they are not like us.
Over time, today's swing consumer becomes tomorrow's safe user, so it is really complacency that is penalized. That makes some sense, but is hardly the utopia where we get to spend less mindshare on fundamental services.
Doing this will all of your bills can easily save you hundreds of dollars a year, but it's socially awkward and kind of a pain in the butt (especially if you actually have to switch providers), so most people don't bother. Companies know this and capitalize on it.
It's was a very odd interaction given that Charter's fine print says that to qualify for the discount you have to not have subscribed to Charter's services for a mere 30 days[0]. Even with limited competition, now with MiFi hotspots a person could cancel their plan, do a pay-as-you-go MiFi hot spot for 30 days, and then resubscribe with the new rate. (Not sure if Comcast is the same.)
[0] "Offers are valid for a limited time only, to qualifying residential customers who have not subscribed to applicable services within the previous 30 days and have no outstanding obligation to Charter."
In my case, windstream is the only wired option.. but they don't seem to realize it.
The service used to be completely unreliable too, but as I've complained over the last few years, they seem to have improved things a bit. It's now approaching the reliability of Comcast (i.e. still not great), but at ~1/3 the speed and slightly higher cost.
I do the same process for internet (both Shaw and Telus). Each company has their own process for getting better rates, but it rarely takes more than fifteen or so minutes a few times per year to get them.
I was with Rogers back in 2003 and had their retention give me a killer rate after a few months.
For mobile, I always dig through the loyalty threads on Howard Forums first so I know what to expect.
As these people are in the minority, the companies can afford giving them the goodies - the "suckers" foot the bill regardless.
Sadly, everyone's favorite darling Sonic.net doesn't do this. They will gladly charge long-time customers more than the advertised rate though.
If you're not already, find yourself a local deals site - it can really help you avoid getting screwed over by stuff like this. You can also wind up staying if you're willing to call your current provider back and say "here's what they're offering, beat it or I'm leaving".
OTOH, consider the value of the satisfaction you feel pushing back against a business that rips you off.
Only in London, people I know have had both experiences. Letting agencies are really the one pushing. For the landlord, a paying tenant is a good tenant, there is friction in changing tenant: you can lose 1 month rent or need to do some refurbishments. Even missing a few weeks can mean losing any benefit of keeping the same tenant at the same rate for 1 or more years.
Letting agencies offer a service to both the landlord and the tenant. As a tenant you get a certain level of service, like repairs or maintenance. As a landlord, the agency offer vetted tenant, management and various guarantees. They are the one pushing for rate increase as that's what they take their share from.
The real problem with renting is the underlying skyrocketing price of housing. You can't escape it.
Since I've been here the neighborhood has improved to the point that people actually want to live here and not, like when I originally moved in, a semi-OK neighborhood with cheapish rent where you probably won't have any hassles walking to the corner store at 3am.
Then again, I was talking to my landlord a while back and the city was complaining he wasn't charging enough (ie. wasn't paying enough taxes) but he would rather have good long-term tenants than charge "market rates" and deal with all the problems that come with that.
Both sides lost - I had to spend the time and effort to move and they now needed to spend time and money to prep another apartment for rent - but I suppose the pricing algorithm takes this into account and figures that in aggregate the apartment complex still comes out ahead by continuing to squeeze people that don't want to move.
Property markets are perverse in many different ways, most of which don't benefit renters.
Edit: Apparently this was an old wive's tail or something. Oh well...
With a lot of frequent flier miles you are very likely a status customer and airlines will bump those last and, depending on the status, will bump other low revenue passengers to make space for a high status customer.
I know a bit about aviation and if an airline really needs to involuntarily bump a passenger (which is quite rare) they will chose an infrequent flier with a cheap ticket.
Unless you can provide a source for your assessment I call bullshit.
This is accurate per everyone I know at airlines. The reason is it’s trivial to shift one’s loyalty. If an airline goes to shit, I’ll switch from spending cash with them to burning down miles while I book work trips with someone else.
Status-qualifying miles are miles that you can only earn by flying with that particular airline. Those miles are used in calculating your "status" with the airline. Achieving a higher status generally comes with perks that make frequent travel easier and more enjoyable (such as being able to sit anywhere in the plane for free, extra checked bags, access to lounges and better chances at upgrades).
Award qualifying miles are the miles that people most commonly associate with frequent flier miles. These are the miles that can be redeemed for discounted flights in the future. There are several ways to earn this aside from flying with the airline (though flying with the airline gives you more award miles than not): credit card spend, promotions through airline partners, giveaways, etc.
There is also another metric that airlines collect to determine loyalty: the amount of money you spend on your tickets, or status-qualifying spend (or dollars). In the past, this information was only used to protect more frequent or high-paying customers from being inconvenienced during travel. Now, airlines use it as an extra requirement for achieving status levels.
Now, since award miles for airlines can be collected without flying with them, flyers with very little status-qualifying spend will usually be the first in line for involuntary removal (involuntary denied boarding, or IDB). However, IDBs have become less frequent ever since the United Express incident last year; airlines are trying to favor giving people vouchers first (voluntary denied boarding, or VDB) before bumping folks.
Now, if the vendor continuously offers the discount to the customer just because they keep asking for it, then that is unfortunate. But I usually only see this with monopolies, like Comcast. I'm sure their strategy is to do that on purpose just to satiate the vocal minority.
That is not a problem for new customers, who have 1 chance to try a new product.
Optimistically, middlemen or automated tools that ease the pain of changing in hard-to-enter markets. In easier-to-enter markets, the emergence of companies respecting simple pricing (we've already seen some of this). Simplicity will win in the long run, again, unless it's a market that can keep competitors out.
Not sure what it's like outside of the EU, but what made it easy and attractive to swich mobile operators here were neither "middlemen or automated tools". It was regulation. Namely, the EU directive that forced mobile operators to allow you to take your phone number with you when switching to another operator. Before this you had to get a new phone number when you switched operators, which was a huge disincentive.
In the meantime I'd get really bad offers (I want to say scam, but they were IMO deceptive) from other places (they were still legit financial institutions) for whom spamming me via mail wouldn't cost them much and they'd make plenty if I was dumb enough to take their offer.
Then I found I got the same, not a scam... but really bad offers from the places that I had done business with for years.
It really irked me when I'd get those fake check (actually a loan) things from a bank I'd been with for ages...
Eventually just said screw them and to a credit union who just keeps mailing me about local discounted baseball tickets. I can handle that.
But, once they get some sort of monopoly everyone is going to be worse off. Something which is happening right now with Grab's acquisition of Uber.
Set a reminder to call cancellation every year or so. It’s annoying we have to do this, but it easily saves hundreds if not thousands of dollars a year.
I bet that would lead to complaints that companies are exploiting the less wealthy. The argument would be that less wealthy people might not be able to afford to switch to a new company where they would not have the long term discount.
New customers got all sorts of incentives.
So, perversely, the system encouraged to switch providers every year or every 2 years.
Many people (myself included) don't do it because of the hassle.
This has always been so, it's nothing new.
It's a weird development and I wonder what the long term effects of this attitude will be.