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Wednesday, May 06, 2009

Forever

IMB_ForeverStamps The US Postal service has a special kind of stamp. After raising the postage rates a few times in the relatively short timeframe of a few years, the USPS was getting criticized by people across the country for making their current stamps they had at home obsolete. If you bought your stamps at a time when they were the correct postage, critics argued, shouldn't they work no matter when you use them?

The USPS agreed and released the "forever stamp." The idea was simple - you could buy this stamp with the Liberty Bell on it at the current postage rate, and no matter what the rate would be in the future for mailing a 1 ounce letter, the stamp would be valid.

This idea of forever is a powerful one. What if your customers thought you wanted to keep them as a customer forever? Many cell phone contracts offer you a rebate only after you have been a customer for six months. Cable companies offer one year promotional rates. Credit cards waive the fee for the first year. Sometimes it seems that just about every promotional offer you are likely to get is only good for a limited time. Then you're a regular customer and you stop mattering. Or at least, you matter less.

Do these companies really want to keep you forever? It doesn't seem like it. I've been a blogger on the Typepad platform for over 5 years now. When I first signed up, I got a lifetime discount of 10%. So every year, I save that. How much does that amount to? Probably less than 10 bucks a year. But how much does it make a difference in my perception to know that SixApart cares about having me as a customer for as long as I'll stay? A lot. Forever is a word people aren't used to hearing from marketers. But forever is good. If you could keep every customer you get forever, you'll be in business for just as long.

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Comments

Not only are folks not used to hearing the word forever, we've been trained that if you don't actively challenge your phone and cable company every six months or so they will very likely take unfair advantage of you. Your reward for not threatening to change carriers or go to satellite? High rates. Makes me feel all warm inside.

Rohit,

Great take. Just saying the word "forever" to myself I can feel the powe of it. The time to take advantage of such a powerful feeling, for marketers, is now. Once everybody offers 'forever' it starts to lose some of its impact.

Very powerful word. It has a much better ring than "loyalty".

Companies will attempt to create loyalists by offering them triple points or a free driver, but what they should be doing is create customers who will forever support and talk about their brand.

I will forever read your blog Rohit.

It's a really cool concept/idea. Will it work? Probably not. People are interested in stamps at the lowest possible cost. If the product held hire value in the sense of usefulness I bet the idea would take off and grab a lot more attention.

Your point is right on, Rohit.

Just the other day we were reviewing our cable bill. I commented to my wife that I was really happy with all aspects of the service: channel offerings, ISP, phone plan.

Unfortunately, that was prior to looking at our last bill. Evidently our value to the cable company has gone down over the two years we've been with them. At least that's the impression I get from the nearly 100% increase in our fees - for the same services.

I guess the cable company believes the switching cost to be greater than their fee increases. And although we haven't switched yet, we are seriously considering it.

If, however, I was still paying the original offering price, they would have a loyal customer for life... or to put it another way, forever.

well that's the best keyword to catch a big fish! free and discounts as well as forever these are the main phrases that catches our attention often.

Forever is a long time and I think it scares off the majority of businesses out there. I think the USPS just did the forever stamp as a marketing strategy to get their butts in the door and buy up as many stamps as they could. It is not like any one person actually bought enough of the forever stamps at a low price to last ... forever. Eventually the buyers of the forever stamp will have to go back to the post office and buy more stamps at the new HIGHER cost. Sure it saved people from having to mess around with the 2 cent stamps or whatever to make their current stamps still viable, but truly, I think it was just a marketing ploy. Because the USPS is not thinking of you or I ... they think of them self.

This is a BRILLIANT marketing move - and as you point out, one that MANY businesses can use effectively. I know that when it comes to car insurance that the longer you're with a company - the greater the chance that you can SAVE money by switching. Talk about building in a "turn and burn" into your customer base!!

It costs a LOT to acquire a customer - in some business models it costs more than others. The "forever" marketing model is a wise one... it not only encourages customers to join you initially - it encourages them to stay.

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