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How Successful Customer Acquisition Programs Can Ruin Your Brand

Mike Sweeney | October 7, 2010

We recently wrapped a client project that involved us delivering a complete marketing evaluation and recommendation, covering areas such as overall marketing strategy, user experience, customer acquisition tactics and consumer messaging. The project required extensive competitor research and evaluation; we looked at everything from competitor creative execution to third-party analytics to social media trends. Of all the competitive research we did, the most revealing task was becoming an actual customer of a few of our client’s competitors.

I am not going to name the client, the competitors, nor the exact industry we’re discussing for a variety of reasons. In order to establish some context, however, I will reveal that the particular transaction that these companies are interested in involves handing over a good deal of personal information, information that most consumers don’t like sharing.

There is a company in this space that is regarded as a customer acquisition machine. They spend tens of millions of dollars to market their products and services, and they literally throw the kitchen sink at marketing tactics – they either try or have tried everything. While the company’s messaging is all warm and fuzzy, make no mistake – this company’s goal is to acquire customers, one by one, dozens by dozens, or hundreds by hundreds.

According to those in the know, this company is very good at this customer acquisition game, or at least they appear to be very good at it.

There’s only one problem. This company’s emphasis on customer acquisition and capturing market share is likely ruining its brand and its customer relationships.

During my 6-week relationship with this company, I ran into three concrete examples of this overemphasis on customer acquisition and how it completely ruined the brand experience for me:

1) They were trying to upsell at every single opportunity, before ANY trust had been built and before I even understood what I was purchasing prior to the upsell.

The signup process should have been called the ‘we have no interest in you signing up for our basic package, so we’re going to get you to cave and buy every additional option’ route.

What this means to the consumer: Unless you present these upsell options in a way that makes it too compelling to pass up, all you’re doing is making consumers feel like another transaction.

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Upsell at every opportunity = annoying

2) From the moment I registered through the moment I cancelled, they didn’t DO anything useful for me.  I gave them 6 weeks to prove something, and they proved nothing.

I can’t provide the visual evidence on this one, so you’ll just have to trust me. After a registration confirmation email – in which they tried to upsell me, of course – I received nothing of value.

3) When I finally decided it was time to cancel, they made it as difficult as possible to do so.

While it came as no surprise to me that I couldn’t cancel via the website (although I’d argue this tactic is so 2002), I was shocked at the phone dialogue that occurred with the representative of the company. I sent the following email to our primary contact at our client:

Subject: Further Evidence that Company X Sucks

Trying to cancel right now, they are trying to pull out every stop in the book.  Once again, we’re dealing with a relatively personal issue, and these companies treat it like I am friggin’ making a small deposit at a bank. Why again would I trust you (Company X) if all you do on the phone is take shots at competitors and attempt to upsell me crap I don’t care about?

Customer Service: You realize Mr. Sweeney that Company Y’s guarantee is purely superficial, meaning you need to be prepared to lose a good deal of money.

ME: Yes.

Customer Service: So you’re prepared to lose as much as XXX dollars, is that something you can cover?

ME: Yes.

Customer Service: (Snickering) OK, please hold while I process some information.

Wow … I mean … wow. This company failed at establishing a positive impression during the signup process, failed at establishing a positive impression after I had actually paid for their services, and then failed at establishing a positive impression as I was walking out the door.

Here’s an age-old lesson for those companies focused on customer acquisition – it costs a whole lot more to acquire a new customer than to keep a current customer. Unless your product or service has no competition whatsoever (hint: those products and services don’t exist), you need to start spending some of that budget on making sure current customers are getting some value from what you offer.

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