Serial switcher

The term Serial switcher was first coined as a phrase by Charles Turner and David Alexander in their Customer relationship management course and then their CRM Pocketbook [ [http://books.google.co.uk/books?hl=en&id=PcM1WnOPuRsC&dq=Charles+Turner+and+David+Alexander&printsec=frontcover&source=web&ots=16qTbxOmrE&sig=WhaFVfDsJJQLG0k5opnFn2teXBc&sa=X&oi=book_result&resnum=1&ct=result#PPP1,M1 CRM Pocketbook] ] . It describes a person who continually moves his/her custom from one company to another and highlights the ignorance of many organisations, including credit card companies, who drive for customer acquisition regardless of retention rates.

Overview

By offering a range of financial incentives, such as free balance transfers or interest free periods, a company may hope to attract new customers. However, these new customers will not contribute any profit if they do stay long enough to provide a return on investment, such as:

* Acquisition costs
* Set up and welcome costs
* Administration
* Exit costs

A serial switcher is a clever customer who switches from supplier to supplier on an ongoing basis to take advantage of special incentives and offers. This is superficially attractive to companies if it meets acquisition and competitive switching targets. In practice, however, a serial switcher will not contribute any profit if he/she does not stay long enough to provide a return on investment. The moral is that lack of integration and analysis across the business allows bad decisions to be made.

References