How not to Retain a Customer
Posted by David Harris Wed, 27 Dec 2006 20:16:00 GMT
About 6-7 months ago, I found a link to the Vongo movie download service and signed up for their 14-day trial. Everything worked fine, movies downloaded correctly, and there was a lot to choose from despite the poor titles they managed to license. It reminded me of Starz On-Demand, which I used to have when we had digital cable. Later, I found out that Vongo was a service provided by Starz, thus explaining the similarities.
Fast forward to last month or so, when Blockbuster Online began their new program that allows users to exchange movies from the online program for a free rental, rather than mailing them in a-la-netflix. At this time, I was considering a switch to Netflix, solely based on the interface (BB queue management is horrible). However, with the advent of instantaneous rentals for simply stopping by the store on my way home, I decided to put my Blockbuster viewing into overdrive, or at least watch more than 3-4 movies per month.
Needless to say, this resulted in the demise of most of my Vongo viewing. I occasionally watched an old 80’s movie a few times per week, but suffice it to say that my library grew quickly to around 60GB and I was downloading more than I was watching. I thought about canceling, but I did manage to watch 7 or so Vongo movies a month, so it was worth the monthly fee (I’m a big movie watcher). Plus, I could occasionally get a movie from Vongo that was also in my Blockbuster Queue, helping to keep my queue under control.
Fast forward to a few weeks ago, when my old Wachovia Check Card finally died on me and I activated a new card with a different number. Obviously, this wreaked havoc with all my online services, but at most I got an email for each online service, with instructions on how to update my credit card information, and a timeline for when that needed to be done by. I was prompt to update my information as soon as I got those emails.
Vongo was not so nice. Instead of sending a warning email, or even alerting me from within the Vongo software, they simply canceled my account. And by Cancel, I don’t mean “place into an unusable state until the information is updated”, I mean they automatically deleted my whole library, movies I intended to watch, basically forcing me to quit or start over.
Bad customer service. I was already on the borderline of whether to keep the account, and with an easy out and 60GB restored on my computer, do you think I’d go through the effort of signing back up? The answer is “heck no”.
So, the lessons I learned:
- When creating a model for an online subscription-based business, one of the first things that should be planned is the exit strategy for users, even before an entrance strategy. If you want to allow them to keep data, plan what format and even the interface they will be able to access that from. Most importantly, make these terms clear to the user when he signs up.
- Communicate with the user. Make absolutely sure that if you cannot bill them, that they actually wish to end their service. Make it easy for them to end, but if they simply need an extra week to get things together, provide access to a grace period during which they can do so. I feel if you allow people extra time, the little money you lose in fees is easily recuperated by the way they’ll rave about your customer service to their friends and on their blogs. Or, it will at least be the opposite of this blog entry.
- Last, but not least, a very easy way to cancel services you don’t want anymore (and that give you a hard time), such as AOL or Netzero or others, is to change your debit or credit card number. For identity theft purposes, most creditors or banks should allow you to do this with little trouble. I wound up canceling two other services (Netzero was giving me trouble cancelling, but that’s another entry) at the same time just by not providing new billing information.
So let that be a lesson to the web 2.0 crowd that does so well on micropayments. I’ll be there soon enough, so this was an equaly good lesson for me. Good customer retention is not always done by providing an awesome incentive to stay, but rather good communication, and an easy exit and return strategy (listen up, cellular providers!)
