Our daughter is home from college. She just came into my office, pretty perturbed (a parent’s way of saying completely pissed off). She had been on the phone for over 25 minutes, long distance, attempting to cancel a vendor’s service agreement. They weren’t buying it.
Even when she explained that she was the one that wasn’t buying it from them. Ever again.
The vendor, a provider of drinking water systems, had these college students sign a one year agreement. Of course, the students didn’t realize they were signing a one-year agreement. They were signing up to have water delivered every week, and the large empty containers picked up. All the sales person told them about was weekly delivery. How great was that?
Which would have been fine if the students were ever satisfied with their service. But they weren’t.
You can probably guess the rest of the story. Missed deliveries, incorrect charges, over charges, broken equipment. All of the above were never addressed or corrected by the vendor. A horror story.
On and on, customer dissatisfaction continued. And why not? Everyone this company signs up has an annual contract! Guaranteed annual revenue for the company. Guaranteed nightmare for the customers.
When you call to cancel your contract due to lousy service quality, you are told that if you cancel early, your credit rating will suffer and there will be a multiple hundred dollar cancellation fee. And as college students, you wouldn’t want to have it on your credit record that you cancelled a service contract and paid an early cancellation fee, would you?
Which is a bunch of bull. Except when you’re a college student, this kind of stuff scares you, you believe the customer service rep on the other end of the phone, and you decide to stick it out.
Our daughter decided she was sick of sticking it out. In fact, the only service that was being provided was that our daughter – and probably a ton of other college students – were indentured servants to this vendor.
It’s a great way to insure cash flow. Sign everyone up, tell them they’ll have a black mark against their name if they cancel before the year is up, and just keep collecting revenue.
In exchange for lousy service.
I mean, why try to keep your customers? In a college town, I guess customers are like a revolving door with an expiration date. At least as a vendor, you have one year of revenue guaranteed.
So how many of you sell subscription services? And after your customer signs that contract, you bolt out of there. It’s hit-and-run. At least you have guaranteed commission because the customer wouldn’t dare cancel and have all those fees and possible legal proceedings, right?
Maybe you attempt to service the account in between closing the sale and when it comes time for renewal. Then again, maybe you don’t. You just hope that your customer “feels” they got enough out of the service they signed up for, so that they decide to renew for next year.
There’s very little difference between the water vendor and professional services companies who can provide anything from internet marketing services, web services, software licensing, widgets delivered quarterly, you name it.
Your customers aren’t guaranteed, they are not naive college students and they are not locked in by that contract. Some of them may decide it’s worth the cost of early cancellation to get out of the horror story of working with you and your company.
Which means each year you are working to replace the accounts you lose due to your inept sales ethic, just to get back to baseline.
Hit-and-run doesn’t sound like a fulfilling or elegant way to sell. It certainly isn’t anywhere close to strategic selling.
Yet you know people who sell like this. You know companies who are organized around this strategy. Perhaps I’m talking to you.
I’m not sure who is on the receiving end of the horror story: your current customers. Or you?
Did you ever think about it from this perspective?