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Good Customer Support Furthers Customer Retention

posted May 24, 2014, 12:34 PM by Info@ HelpAsNeeded   [ updated May 24, 2014, 12:44 PM ]
Customer acquisition costs tend to be pretty high, so the best strategy usually is to treat existing customers very well so that they remain customers. Here's an example of how not to treat existing customers.

MelbourneIT is listed as having registered the 6th most domains, with 2.2 M, according to information on as of May 24, 2014. According to information from MelbourneIT, Microsoft was one of their domain resellers until Microsoft discontinued Office Live Small Business in 2011, at which time former Microsoft customers began to interface, often for the first time, directly with MelbourneIT.

My organization provides technical support to a number of web sites, some of which own domains that were a party to this transition from Microsoft to MelbourneIT. While we don't know how many accounts Microsoft delivered to Melbourne IT, it seems to us that Melbourne IT should be grateful for these new accounts. However, it seems that MelbourneIT never understood the idea of treating its customers well but instead treats its customers lousy. We won't take time to list all the examples but will list a few.

First, their tech support is lousy -- they don't offer support by email, but instead direct you to post queries to an online forum. When we wanted support changing a particular web host from Microsoft to Google, our online queries went unanswered for a week. We went so far as to call them -- in Australia -- from the United States and had a support tech ask for the account password. It seems to us that support personnel should not have access to passwords, much less should they ask for passwords over the phone. MelbourneIT had a "challenge question" on the account that they should have used, but didn't.

Second, we decided to transfer the domain we were having trouble configuring to a US registrar but we couldn't because of problems with the registry. We submitted a complaint to InterNIC which produced a response from their Policy Office - Legal and completed a successful transfer.

Now -- this month -- Melbourne IT decided without any warning or notice to automatically renew the remaining MelbourneIT domain at $39.95 -- more than double the $14.95 fee we had been paying per domain per year. Fortunately, the credit card company to which this domain renewal fee was submitted identified this as a potentially fraudulent charge so they blocked the charge and alerted us of the charge. We investigated this charge using MelbourneIT's online customer support service, and received the following explanation:

"As a reseller of Melbourne IT, Microsoft were free to set their pricing at whatever level they thought appropriate. When they rather abruptly closed the office live system and replaced it with Office 365, all their customers reverted to being managed my us. As a gesture of good faith, we agreed that we would process the next renewal on all those domains at the same price Microsoft would have charged. As it's now the second time the domain is to be renewed, the pricing is now at our standard level - what you are being invoiced is the same as what it would cost you to buy a new domain or renew an existing one if Microsoft had not been involved in the process."

We don't set prices, but $15 seems to be the going rate for domain registrations, so we informed MelbourneIT that we would not renew. we informed them that we were going to transfer to an other registrar. We turned off the automatic renewal setting on our account. We asked them to stop sending "domain expires on 2014-06-16" notices (they refused to agree to do so). We asked them to stop billing us. Despite all this, they continued to bill the credit card and despite our instructions to the credit card company, MelbourneIT was paid for this renewal at this exorbitant fee.

We have asked for an immediate refund and hope, despite all that has transpired, that we will find satisfactory resolution and that we will be done with this organization.

PS: shows MelbourneIT's total domains have declined by over 1% in the past month, from 2,240,000 on April 14, 2014, to below 2,210,000 on May 19, 2014. Perhaps MelbourneIT is abandoning the business?