Annoying 1 Old Customer to Gain 5 New? A Lesson from the UFC

November 12, 2012

An important aspect of any business is determining the price you pay for new customers. The cost of a new customer is generally calculated as a function of marketing and sales expense using metrics such as Cost Per Acquisition (CPA).

However, there is a soft cost that is rarely discussed: the alienation of existing customers due to changes made to acquire new customers.

UFC on Fox and That Awful “Football” Music

As some of you know, mixed martial arts (MMA) is my favorite sport. I even wrote a post on the original blog: 3 Lessons Small Business Owners Can Learn from Mixed Martial Arts.

Late in 2011, The Ultimate Fighting Championship, the marquee MMA organization, announced that it had signed a 7 year deal with FOX. Having been resigned to obscurity in its early years and constrained by the limitations of cable television as it grew, the UFC’s FOX agreement was a huge leap forward for the sport and for the organization.

The deal exposed the UFC to a massive new audience, made available through FOX and its sister properties of F/X and FUEL TV.

I was excited about the agreement and happy to see my favorite sport gain mainstream acceptance, that is…

…until I heard the intro music during the first UFC on FOX broadcast.

The hard-hitting metal music that had become the UFC’s trademark had been replaced by generic, brass section network sports music.

It sort of sucked.

Obviously, I was not the only fan to feel that way. As UFC President Dana White said in an interview on FUEL TV:

“One of the biggest complaints I got when we started this FOX deal was the NFL music. They all call it the FOX NFL music. It’s not the NFL music; it’s the FOX Sports music. So if you watch any sporting event on FOX, that’s the music they play. I like being on FOX Sports.”

Now, coming from the business world, I understood. Such is the price of being on FOX; you are part of the FOX Sports brand and subject to their branding.

For me, the intro song really did not matter, but it did get me thinking about organizational change and the soft cost of new customers.

People Do Not Like (Organizational) Change

No matter what your business, as you create and manage growth, you will inevitably change some of the things that attracted your early customers to you.

Successful bloggers see this often. As they approach a certain level, their engagement with their community drops. It is one thing to respond to every comment when you get 10 per post; it is another matter entirely when you get 50. Inevitably, some of the early community members will take umbrage at the blogger’s lack of engagement, complaining publicly and sometimes even insulting the person they once admired.

Successful retail businesses endure this as well. It always pains me when one of my earliest customers says to me: I really miss how it was in the old days. It just felt like family here. Sure, we can do everything possible to try to personalize that customer’s experience and to make them feel as special and valued as possible, but we can never go back to how it was.

Nor would we want to.

Our lobby has more people in it. Our staff is quadruple the size it was during our first few months. Every customer experience initiative in the book will not make it feel like it used to.

Let’s face it: Assuming they are equally as profitable, more customers are better than fewer customers. And unfortunately, more customers comes with a price tag that we often do not discuss.

Do everything you can to help your loyal customers feel comfortable with the changes in your organization as you grow, but just realize that sometimes you will annoy one old customer trying to gain five new ones.

When this happens; don’t sweat it too much. As any UFC fan knows, you can’t win them all — unless your name is Anderson Silva.

4 thoughts on “Annoying 1 Old Customer to Gain 5 New? A Lesson from the UFC”

  1. Hi Adam

    I remember when I used to work in the pensions industry and the company I worked for had one of the best reputations in the industry. They were taken over by a US company that no-one had ever heard of in the UK and were renamed.

    That really did cause some issues with customers. It was almost as if the reputation the company had built up vanished overnight and it took a good while for people to regain their trust in the company.

    1. Hey Tim, No doubt, mergers and takeovers can really be challenging for customers, especially when the brand they trust is replaced. It works in reverse too. There was a bank merger here in the States years ago where the bigger bank bought the smaller and took its name, because the bigger bank had such a terrible reputation.

  2. Toporek, I knew there was a reason I liked you. GSP rules! And i am waiting for the day for him to go up a weight class because the duel between GSP and Silva would be brilliant.

    You are so right. I spent 10 years with my previous firm and went through the growth of small firm to big boys. What worked back then won’t necessarily work now. Growth is like that. If you want to live in the past, go ahead. We’ll be over here. Moving on. Now if Dana White “sells out” and changes the rules of these events or, heaven forbid, makes it anything like “professional” wrestling then we have an issue. No longer innovative. I suppose you need to weigh the desire for growth against potentially alienating your true fans as well. I am sure it’s a fine line.

    Here’s that song you love. Me too! The intensity of that intro juices me up every time.

    I have to admit I haven’t seem much MMA recently but still love it.

    1. Love the video Ralph! Great start to the morning. I’ve actually got that song on my workout playlist — it’s a great motivator! I know you’ve got to be psyched for the fight tonight — GSP is back!

      I’m a huge GSP fan, though I will say I’m not as psyched as most about Silva-GSP. Just too much size differential. Don’t get me wrong — I’ll watch it, and the UFC would be fools not to put it on from a biz perspective. But competitively, I’d be more interested in Silva-Jones.

      You’re dead on — every organization has to grow and evolve, and inevitably, some people won’t like the direction. Have I liked every move the UFC has made, or course not, but assuming they don’t screw it up (expand too fast, undercapitalize, etc.), what Dana White and the Fertitta brothers have accomplished is going to go down as one of the greatest business success stories of this century. I truly believe that.

      Love the sport, and love the business story. So, I’m a double fan.

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