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50 ways to lose your customers

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Are customers cheering to adopt or dump your brand?

Are customers cheering to adopt or dump your brand?

Singer-composer Paul Simon’s classic song “50 Ways To Leave Your Lover” is about an emotionally torn man who “struggles to be free” of his wife. He learns, from his mistress, “The answer is easy if you take it logically.” Her advice? “You just slip out the back, Jack. Make a new plan, Stan. You don’t need to be coy, Roy. Just get yourself free.”

Companies usually don’t want to slip out the back, leaving their customers feeling dumped. But companies can unconsciously induce their customers to say goodbye to the company’s brands – in ways as swift and sure as the song’s recommendations.

I won’t bore you with fifty ways, but here are seven sure-fire mistakes leaders make that lead their customers to “slip out the back” or “make a new plan.”

1. Placing profits before people and customer experiences. Financial outcomes are a result – a lagging indicator – of making the right decisions on behalf of customers and the employees who serve them. Nevertheless, too many companies make profits the end-all and be-all. And they pay a price, eventually. Subscribers are exiting in droves as cable companies lose their monopoly status to disruptors like Hulu, Apple, Amazon, and Netflix. Had cable companies invested in terrific customer experiences, they would have retained more customers.

Customers today care about how a company behaves. Yes, people got angry about Starbuck’s suggesting a conversation over coffee about race. But they love that Starbucks’ CFO said the company would gladly give up profits to honor its belief that sexual orientation is not a basis for discrimination in marriage or customer service. Costco customers value Costco’s core values, especially in contrast to Sam’s Club.

2. Ignoring your fans. I am a United Airlines fan. (Don’t ask me to explain. I am.) I regularly give feedback to them and don’t shop for other fares. But when my miles went down last year, United dismissed all my past loyalty (700,000 miles worth) and lowered my privileges. They should have instead offered me inducements to fly more (versus use free miles) this year.

3. Losing your relevancy. Trying to milk an aging business model doomed Kodak, Blackberry, and Blockbuster. Their products and services simply are not relevant to a sufficient number of customers to sustain a business. The Internet of Things will create yet more shake-ups.

4. Offering too much choice. I saw so many versions of Crest toothpaste on the drug store shelf that I finally said, “Goodbye.” I’m feeling the same way about Charmin toilet paper. Nine types? Really? I’ve often wondered if customers select store brands in part because the choices are fewer, saving precious brainpower!

5. Presenting a tired image. Outdated visual imagery and an absence of social media presence in today’s world can suggest your company is not keeping up with the times. You give a new entrant an opportunity to look more vibrant, even if its underlying technology or service offering is not.

6. Changing the sizing. It’s OK for cars and kitchen appliances, even computers, to develop new models. But when my favorite running shoe, hosiery, and bra brands change sizing, it makes me scream. How often do you regret you did not buy two versions of something so that when the first wore out, you had another in your closet?

7. Losing your differentiating value promise. What was once a differentiating brand promise becomes a customer expectation because competitors copy what works. Product quality for example was once  differentiating, and now it’s a requirement to be considered. Amazon-like customer experience is quickly becoming an expectation. I purchased Chubb Group insurance as I now live in the land of earthquakes and wanted the best coverage. I was disappointed when my website experience was anything but best-in-class. (My agent said Chubb plans to close the gap, soon I hope.)

The lesson here is that if you are not regularly evolving your business model to deliver more value to customers, you are running the risk of being commoditized. And only one company wins in a commodity-like market, and that is the one with the lowest cost structure.

There are times when you should dump a customer.

The pitfall of the customer-centric thinking is that not all customers deserve your loving care and investments. You must choose which customers to invest in or not. Choosing is strategy, as Richard Rumelt states in my all-time favorite strategy book, Good Strategy Bad Strategy. Everything else is aspiration.

So here’s my advice when your company is emotionally torn about a customer:

“Hop on the bus” and leave behind crazy-making customers who steal spirit from your staff.

“You don’t need to discuss much” with consistently unprofitable customers. Raise their prices and they will exit voluntarily.

Tell customers in non-strategic target markets that demand things you cannot leverage in your strategic markets to “Just drop off the key.” Find them a better partner than you will ever be.

“And get yourself free.”

© Plantes Company, 2015


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