Never understood this. Study after study tells us how much more it costs to find a new customer, instead of retaining an existing one.
same with employees
It costs more, but those are indirect costs associated with marketing. Most executives only look at sales and expenses and don't think in indirect costs, regardless of how many business people try to explain. So the costs are marketing, we either cut the costs or we cut the budget, but not change what we are doing. Or they don't care, because of the above collusion mentioned in another comment, or because they want to spend on marketing for their golf buddy, the marketing CEO.
Does it drive me insane, as someone who has a marketing and accounting degree, and had to explain it a bunch of times? Yes. Also most high level executives make up a fantasy version of how the business is being run and feel anyone who doesn't agree is inherently wrong.
Also most high level executives make up a fantasy version of how the business is being run and feel anyone who doesn't agree is inherently wrong.
This was quite eye-opening for me, when I discovered it.
I've met Chief Information Security Officers who I wouldn't trust to pick my antivirus product.
This also works for. Employees.
"I've been here 15 years. Can I get paid what the new hires get?
"Oglh fuck no. No no no. Can't believe you would ever suggest that."
We made a spreadsheet at my job, and found an occurance of this. Brought it up to my manager. He seemed to agree, generally he's a cool guy imo, but I have yet to see a change in my compensation.
Change job all few years.
As a programmer with more than a decade of experience, I got a variant of this principal watching newly-minted and utterly useless CS graduates get hired with a salary higher than mine. Only remedy was to quit and go work somewhere else.
If they use the phrasing "new or returning customers" you can just cancel your service then sign up again.
And then you lose any loyalty or banked credits because it's technically a "New contract"
I had 100GB of data credit in my pre paid phone plan. I got 2GB a month for $5 unlimited talk and text starting in 2014, it's a good deal for me. And you can imagine how long it took to bank 100GB even with the occasional free bonus data promo.... That plan was replaced with a more expensive one but somehow I got grandfathered in to the cheap plan.
So naturally I didn't want to rock the boat when I was getting my phone for $5 a month (their cheapest plan now is $20)
But they finally caught on and moved me to the $20 this year, they automatically transferred my data bank and sent me the new terms.
I double checked and while this was their cheapest monthly plan the 6 month plan would save me $80 in the long term so I called to get swapped and they said that I'd lose my data bank because it was a new contract. I argued that they changed my contract and I should have had an opportunity to choose which new contract my data gets transferred to.
I spent ages debating it, but there was nothing the rep or their supervisor could do to reward my 10 years with their company or compensate me for the service I had pre paid for (data) that they now expected me to subscribe to on their new terms to be able to access despite the contract I signed saying something totally different.
Their leading budget competitor had the exact same overall rate but for a yearly pre paid plan, and new customers got a 150GB data bank start up bonus. So my phone bill is paid up for the year now and I've still got a decent chunk of data and it didn't cost more than I was prepared to pay the old company.
(and yes I do use it, I'm a substitute teacher so I'm always using my phone as a hot spot when I'm at a different school)
