I have been having an impolite discussion lately with a payment processing organization. It’s all about one of those credit card swipey terminals that a charity I help out has been renting for a few years. We don’t use it often; we can do the same thing for a lot less using Square; and, we’re paying over $170 a month for a machine that in the three or so years we’ve had it has almost never worked. We just want to give it back and take the next exit. Not so fast, apparently. We have a contract. In fact, it renewed automatically just a few months ago. Yes, they are sure they sent a renewal notice. No, they can’t produce a copy of the notice. No, we can’t see a copy of the contract. Oh, well, if we insist, for $50 they will send us a copy of the contract. What fun.
All of this has had me thinking about whether or not most marketers have any idea how difficult it would be to quit their brand. If you sell cigarettes, crystal meth or brain-eating games involving fruit, the answer is pretty clear, but for the rest of us, I’m not sure we really know much about the off-ramps our customers find along their journeys with our brand.
Marketers tend to think in terms of on-ramps. We invest most of our time on growth — revenue, market share, number of accounts or what have you, our Daddy is usually some kind of year-over-year improvement.
I have long held that marketing ought to own the dismount but I don’t know that we spend nearly enough time working out what keeps our customers on the freeway in the first place. We know reasons for churn but do we know reasons for sticking around?
Perhaps we should be spending time with our customers, product managers and service people to understand the barriers to exit, as well as we understand the barriers to entry for our products.
I will get us started by suggesting there are four classes of barriers to exit:
The Really Great Barriers to Exit
Whether it’s the shop where you’re always greeted by name or the predictably pleasant experience you have each time you call for service, or the terrific Sales Squirrel who checks in with you, even when you aren’t buying anything, some brands just make you want to stick around. Barriers like these take the temptation right out of those off-ramps.
- Awesome service
- Great personal relationships
- Mutual Trust
- Habit (the healthy kind)
The Inconvenient Barriers to Exit
If you have ever tried to get out of a car lease or a mobile phone contract, you know that sometimes it’s just way too much work to fight your way to the exit. As marketers, we should be looking out for warning signs that we are inadvertently forcing our customers to stay on the freeway until it peters out into a sad suburban cul-de-sac or an ugly lawsuit. Things we should be looking for are
- Costs to exit
- Complexity to exit or switch
- Not really understanding how to exit, usually the result of a missing pre-nuptial agreement
The Really Evil Barriers to Exit
As with the payments company that is fleecing my poor charity, some companies come up with ways to block the off-ramps all together. Usually these are ill-considered nastiness like
- Ridiculous cancellation fees (I was actually asked by a bank once to pay them $25 to close my account; I took all but $3 out and it’s probably still open)
- Contracts that renew automatically without notice (Not cool. Not ever)
- Lawyers, collection agencies and other Dementors
The Barriers We Imagine
Good marketers aren’t oblivious to the idea of retention strategies but we often delude ourselves into thinking there are barriers to exit that really aren’t sustainable. Such as
All good reasons to stay but also easily replicated and sometimes very costly to maintain.
It’s inevitable that customers will take an off-ramp at some point. Smart marketers know that a not-very-terrible experience on the dismount greatly improves our odds of winning them back in the future. Here are some questions we should be asking:
- Do we actually have any great barriers that keep customers coming back?
- Are our great barriers scalable? Unique? Institutional?
- Can we knock down any of our inconvenient barriers?
- Do our customers incur unforeseen costs if they leave us (like moving a bunch of data, having to hire people to do the work instead of us, etc.)?
- Do we do a good job of helping them understand this? Can we help them manage it?
- Do our contracts, statements of work and agreements make it very clear how to quit us? Do we use all kinds of legal BS to make it sound complicated to leave?
- If a customer does leave, how long will it take? Is there equipment to return? Do we punish them unnecessarily for leaving?
- Do we have a plan if a low-priced competitor moves in on our customers?
- If our costs go up, do we need to resort to extreme vendor or employee abuse to keep our market prices low?
- Are we convenient or just the only game in town? Do we have a plan if that changes?
- Have we undermined our brand with evil stuff like contracts that never end or punitive, unnecessary charges?
- Do we sic our Dementors on our customers to intimidate them into staying?
I could go on and on. My point is, as marketers, we should understand whether we have customers or hostages.