Recently Cox Communications had a special where they would give you a Flash Drive for signing up with them. I really wanted a Flash Drive and went up to the office here in town and asked if I could have one. Obviously I couldn't because they were for new customers only. But why not reward those customers who have been with you for a long time? Why not promise that after so many years your rates will go down? Why not give customers who have been with a company for 5 or 10 years some sort of premium, or stock, or something to reward them for their long-term contribution to the company's bottom line?
Sure, I understand the need to attract new customers, but wouldn't it be just as beneficial to have the word-of-mouth of long-time customers convince others to try and stick with the company?
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Businesses are constructed to generate money and an offer of giving away something to clients that they have already captured is unlikely to generate much new income.
It is cheaper to gain additional sales from an existing customer than to develop a new customer and gain the initial sale. In that respect, awarding a flash drive or appropriate reward to existing customers would go a long ways to retain loyalty.
In a case like this, Cox could easily have made these available for existing customers "at cost", often 1/2 the price of the device. There would be zero program cost, and minimal cost of disbursemnt, since only a few customers would actually take them up on the offer. What is not mentioned above is the sign on special ejcarter received when he/she first signed up with Cox....often that is forgotten. A 1/2 price offer to existing customers who desire it would also go a long ways.
However, often a company relies upon customer inertia to retain market share. Such as AT&T did for a decade. Poor business practice in my humble opinion, but apparently Cox would prefer to "win" ejcarter back than to retain their loyalty.
Consider that new customers have to take the effort of signing up with the new service and cancelling their old service (if they had one). The giveaways are an inducement for them to make this effort.
Since companies have limited resources to provide services, they have to decide where those resources are best spent--they either have to treat all customers the same, or give special treatment to a small group of customers; it is impossible to give "special treatment" to everyone.
I had the interesting experience recently when about a year ago a company that offers satellite TV service contacted me with a good deal. What it came down to was more programming and TV's for less money than the provider I was using. I called the service representative for the company I had and asked what they could do to keep me as a customer. I had been with them for about 10 years and had been happy with them and really didn't want to switch.
They offered me what the other company was offering for $25 a month more than I was paying. I discontinued service with them and went to the new company.
About a month ago my old company sent me an offer that was basically what the new company had already set me up with for the same amount of money. Had they done that a year ago they would still have me as a customer. If they want me back tho' they will have to significantly beat what I have now.