Does catering to new customers affect returning customers

Question

Often times you will see deals and bonuses given to new customers or first time users. These deals can be anything from sign up fees waived, deals on products, to a month free subscription. Of course these promotions are designed as incentives to attract new customers. However, I was wondering what implications this has on current and returning customers.

Emotion: Nobody likes to feel left out, so when coming on to a website and finding that they are offering promotions that you're NOT ALLOWED to participate does it elicit contempt? What if these promotions are for free premium service or "pro member status"? Now you are literally putting these new users ahead of your loyal members.

Logistics: There is also the issue of the space it takes up. If you take up even 10% of your page pandering to new customers that space is now useless to returning customers.

So the question is does focusing on new users push away current users? Is there a less abrasive way to offer these type of deals to first time customer without upsetting anyone (if it does upset them)? Is there any kind of data pointing to some golden rule of new user influx versus old customers leaving from anger?

Answer 1

I don't have actual research, but from anecdotal cases, I think the answer is YES. It turns your service into a commodity, customers switch constantly to get the cheapest deal.

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Example - Telecomm (Cable & Internet Providers)

Here in Canada, we do not have a large selection of cable/internet providers. The "Big 3": Bell, Telus, Shaw owning majority of the market. They have a tendency to have promos which provides discounts only for new customers to tie them into a 2-3 year contract. What you notice talking to people is that when the contract period (or promo period) is over, customer switches to one of the other two providers to catch another promo.

Answer 2

I've heard people complaining about that very often.

Maybe you can try to expose to your advertising campaign only people who are not customers yet.

If you are promoting a deal for new customers on your website, you can use cookies and other technologies to not show the deal to returning visitors, or to registered users. Of course there will be people who are customers already and have nevere visited your website before, but at least you expose less people to that bad emotion.