Customer Since 1978
By Peter L DeHaan
was an emotional moment for me. After proudly
carrying and using a Shell gasoline credit card for more than 20
years, I had just canceled it and was in the process of cutting it up.
Not that I was angry or upset with Shell, but it no longer made
sense to carry their card. You see, Shell, in
conjunction with Chase Manhattan, had launched the Shell Master Card.
If I used it for my Shell gasoline purchases, I would receive
five percent off my fuel expenditures on my next statement.
For all non-gas purchases, I would earn a one percent rebate on
future gasoline. Therefore, I could use the card
for more than just gas and get discounts, too. In
comparison, my old trusty Shell gas card was an absolute antique.
The only practical thing to do was to cancel it.
did this long-term relationship with Shell start? It
was 1978. I was attending electronics school and
found myself changing jobs often and moving just about as frequently.
During one such transition of both employment and abode, I
found myself on the other side of town, far away from the gas stations
whose credit card I carried. However, there was a
Shell station around the corner from my ramshackle apartment, one down
the street from the TV station where I worked, and another next door
to the school I was attending. Add to this a gas
shortage, skyrocketing prices, and Shell’s tendency to not only have
gas, but to be one of the less expensive options. This
led to an easy decision to get a Shell credit card. It
all began due to practicality, convenience, and frugality.
course, it wasn’t long before I finished school, got a “real”
job, and moved again. To my delight, there were
Shell gas stations both near the office and close to my new home.
Soon thereafter, I married and it was a simple matter to order
a second card for my wife. In the years that
followed, through job changes and relocations, there always seemed to
be a Shell gas station nearby. A habit was formed.
By then, even at times when Shell didn’t have the lowest
prices, little thought was given to going somewhere else. (This
is a lesson for anyone selling a commodity product or service:
availability, convenience, and consistency produce long-term
to a couple of years ago when the Shell Master Card was introduced.
At first, I viewed their offer with skepticism, but there
didn’t seem to be a downside. I could continue my
Shell gasoline habit, reduce my overall gas costs, and have a more
versatile card. We applied for the card and begin
using it immediately. Even so, I anxiously awaited
the first statement, worried about a hidden snag or unanticipated
caveat. None appeared, just my rebate to be applied
to next month’s gas charges. Still the cynic, I
cautiously anticipated my second statement. Was
there some fine print to let them wiggle away from the result I
expected? No. The rebate
occurred exactly as indicated and for the amount promised.
so, my old Shell card remained in my wallet – just in case.
Finally, after a year of non-use, I realized the time had come
to throw aside any emotional connection to my long-term companion.
It was time to cancel the card. I glanced
one last time at the words I had grown to delight in – “customer
since 1978” – and cut the card into pieces.
the Shell Master Card was used for all our household purchases and the
ensuing rebates grew. Things went well for quite
some time. Then a surprise came on our statement, a
$29 late fee. My wife, Candy, called Chase
Manhattan to inquire. Since our payment history was
stellar and Candy can be most persuasive, it was a trivial matter to
get the charge removed. We were admonished to mail
the payment earlier in order to avoid future late fees.
next month, Candy mailed our payment five days before the due date.
Again, another $29 late fee appeared. This
time she called to complain. “We don’t care
when you mailed your payment nor do we consider the postmark,” came
the arrogant reply. “We only look at the date we
post your payment.” Apparently, this was a change
in their policy. Plus it seemed a bit despotic,
especially considering that our payment was applied eight days after
it was mailed. “But we have no control over when
you process our check,” Candy countered. The
agent’s response was quick and terse, “We always post payments on
the day they are received.” No amount of pleading
or cajoling could get the late fee removed a second time. The
complaint was escalated and soon the only remaining recourse was to
submit our concern in writing.
letter of complaint was submitted as instructed and a series of
automated written responses from Chase Manhattan followed.
The last one promised the company would “notify (us) of our
findings as soon as they become available.” That
was nine months ago. There have been no further communications from
them about this matter.
the late fees were exceeding our rebates, we stopped using the Shell
Master Card and begin buying our gasoline using an existing Visa card.
This afforded us a new level of flexibility since there was no
longer any need to continue our routine of looking for a Shell sign.
We could also shop for the lowest-priced gas. (When
we used the Shell Master Card, the rebate would more than offset any
higher price we paid for their gas.) It soon got to
the point that we were seldom going to Shell.
the past 24 years, I estimate that we have spent about $20,000 on
Shell gas. Assuming that our future gas consumption
will remain constant and projecting that prices will increase, we
could likely spend another $30,000 on gasoline in our lifetimes.
In line with this projection, a $50,000 lifetime customer and
$30,000 in future business was lost due to a $29 late fee and the
policies supporting it.
are the conclusions we can draw from this experience?
first is to be careful in pursuing strategic alliances. Yes,
this is a business trend and, when properly done, it is a great way to
retain clients and obtain new ones. I am sure that
Shell saw these benefits, which is why they formed a relationship with
Chase. The failure in their strategy is that they
relinquished interaction with their patrons to Chase. Chase
did not view me as a $20,000 customer or foresee a $50,000 lifetime
value; they likely saw me only as an unprofitable credit card holder
(since we always pay the entire balance each month and, until the end
of our relationship, continually paid on time). Hence,
when forming any kind of marketing, cross-promotion, or reciprocal
business relationship, make sure you retain control over your clients;
don’t leave such a critical element to someone else.
second lesson is about policies. Certainly
Chase’s policy to track late fees and interest charges by the date
posted is practical and easy to follow (as well as being
self-serving), but is it fair? Care must always be
given to ensure that policies and procedures balance the needs of the
company with the best interests of the client.
consider your staff. The agents Candy talked to did
not have the latitude to credit a late fee more than one time.
Apparently, their supervisors didn’t either, nor did the
managers. Yes, there is a place for rules and
policies, but to make them absolute and intractable, unfairly
handicaps agents and can ruin client relationships. The
last words that a frustrated client or caller wants to hear are,
“It’s our policy,” or “I can’t do that.”
of these problems, caused by a partner company, Shell, through no
direct fault of its own, has lost me as an exclusive customer and has
encouraged me to spend money with its competitors.
We since received a notice from Chase stating in part, “Shell will
no longer be participating with Chase in a credit card program.”
Do you think that perhaps Shell has realized what I’ve just
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