Penny Wise, Customer Foolish

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Owners and managers of most commercial operations do everything they can to attract and hold loyal customers. These businesses understand that once a customer has been won over, that individual’s repeat business can add to the bottom line for years, even decades to come.

The same is true about Radio. As a multi-station manager, I often spent time with my staff brainstorming new ideas to increase our loyal customer base — both among advertisers and listeners.

Last month, I came across a new concept: a store policy designed to drive customers away.

Fortunately, this policy did not originate from any Radio station. Instead, it came from a well-known, national office supply chain. This was a franchise that was at the top of my “preferred business” list; low prices, convenient location, excellent selection of merchandise. For these reasons, it was my first stop when shopping for a replacement set of headphones for my PC. These days, headphones are encased in molded plastic suitable for guarding gold at Ft. Knox (assuming we have any gold remaining there). It required a sharp utility knife and several minutes work to free the headphones and position them over my ears…only to find them to be the most uncomfortable model I’ve ever worn.

After less than two hours of adjusting, repositioning, and pain, I returned to the store for a refund. It was then I learned there was a 15% “restocking” fee because I had opened the plastic package. I explained that I had to open the package in order to learn that the headphones were unsuitable; wearing the headset while it was still encased in plastic didn’t seem to work. Ah, but a policy is a policy, so I was charged $4 and change for returning an unsatisfactory product.

I found the entire experience unsatisfactory. So, in gaining their $4+ restocking fee, they lost a customer. I now travel slightly farther to a competing store and they get all my office supply business. There I found a better set of headphones (very comfortable!) for less money. And a formerly loyal customer has become a non-customer for my old office supply place.

Are your stations policies driving your customers away? While Radio doesn’t have “restocking” fees (thank God), think about policies that give new advertisers a discount while taking existing customers for granted. There may be other, more subtle ways that Radio discourages repeat business.

My recommendation: review your policies and make improvements where necessary. Your customers (and bottom line) will be better for it.