Businesses that destroy value lose loyal customers

by Ashvini on June 25, 2012 · 7 comments

in Business

I used to be a customer of a photo website. Once, I purchase around $30 of photo credits that I could utilize later(instead of typing in the payment details all the time) . A few months later, I got a mail from the photo company, claiming that my credits are going to expire soon, if I don’t utilize them.

It may be that I missed reading the TOC when I purchased the credits in bulk. Thus, I ended up purchasing the photos before credit expired. When I had credits, I used to visit the site and often purchase something.  Now I have stopped doing that and I am looking for alternatives. I do not visit the site anymore because I do not want any more soon to expire credits. Also I have started looking for alternatives.

Why do companies/people create a blog? There is a cost involved in for example writing content, marketing and maintaining it. They do it to keep the customer/potential customer coming back. They do it to increase the recall value of their business.

Why do stores advertise themselves in newspaper, radio, TV etc.? It is to get the customers to their shops. If customers never visit the shop, they will never buy anything.

The photo website above destroyed the value when they expired my credits. They could have increased the price of their photos but instead they chose an easy way out. That means they lost

  • potential future sales
  • returning customer
  • the perceived value of buying credit and using them whenever I wanted to

Here are a few takeaways

  1. Do not destroy the value of business for your customer. Customer will not view raising prices as bad (business has to face rising costs) but the loss of value ( as perceived by customer) is going to hurt a lot.
  2. No visit to your shop/website/blog means no sales
  3. If your customer is just browsing your catalogue and he has not purchased anything does not mean he is never going to do it.

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{ 7 comments }

JanB June 27, 2012 at 7:01 pm

This would definately set me off. I PAY for a service, I WANT something in return. If that site stated something in their small print for having to get those pictures before a certain date that’s legally ok, bur drives (future customers) away. I wanted a new credit for my purchase or a refund. period.

Ashvini July 3, 2012 at 3:02 pm

Hi Jan,
I totally agree. Legal is one thing and being business savvy is another. We all want to be legally correct but then driving away customer is a disaster. Can you imagine that now I am not buying anything from that site and I have not visited there for a long time. I have become occasional buyer now. The expiring episode lost them a regular customer

Bill Dorman June 27, 2012 at 3:01 am

100% of zero is still zero. Who knows what their reasoning was; but they chased off a customer for sure. Look for ways to keep them coming back, not chasing them off.

Ashvini Kumar Saxena July 3, 2012 at 3:04 pm

Absolutely , Bill. They lost me . I might still go there to be frank but then I am an occasional buyer not a repeat one. I truly hated the way I had to shop before credits expired .

Lori Gosselin June 26, 2012 at 10:12 pm

Point well taken Ashvini. If getting customers to your shop will sooner or later result in sales, that has to be the end goal. Thanks for this.
Lori

Adrienne June 26, 2012 at 8:38 pm

I probably know which one you mean Ashvini and I don’t get my photos there anymore either. I mean I purchase the photos as I need them and not before. They make you purchase so many credits in order to even buy one photo and then they come back and tell you that you have to purchase more now or you lose your credits. Is that really anyway to run a business?

I couldn’t agree with you more about servicing your customers and clients. I mean they’ve already been paid so why does it matter to them when the product is purchased. In my eyes they’ve lost a couple of good customers this way so let’s just see how long they stay in business and if this type of business plan is something they want to keep in place.

Couldn’t agree with you more.

Thanks for voicing your opinion on this one Ashvini and I’m right there with ya.

~Adrienne

Ashvini Kumar Saxena July 3, 2012 at 3:07 pm

Hi Adrienne,

Thanks for corroborating my example. I think many sites indulge in this manner and it is indeed unfortunate. By forcing us to buy stuff at the time we don’t want them is bad. It makes you lose trust in these sites. Now I purchase photos in credits of 1, 2 or 3 never depositing more. Its their loss when they made me run away.
I really don’t think that sustainable businesses would like to follow such a model.

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