"Our Take" - Switching Barriers

(Past Editions by: Date, Title, Topic)

 
About "Our Take" 
"Our Take" is a collection of daily vignettes covering a wide range of CRM topics. It's an attempt to add our own spin to the world of CRM. We will use the column to share our perspectives, opinions, epiphanies, web nuggets, or quite frankly anything that moves us. Get ready to expect the unexpected. And, don't be shy about sharing your thoughts.
 
 
8/20/07 - Switching Barriers
You probably know the feeling. If you feel trapped, all your energy focuses on how to free yourself. Most cell phone user comes to a point in their relationship with their provider where they wish they didn't have a contract that keeps them from looking at other options. The issue comes up for a myriad of reasons but it seems that the end date of the contract keeps people from getting what they want unless they renew or extend the agreement. Or pay a fee to break the contract.
 
Hey, a deal is a deal. Right? Was the customer forced to sign the agreement? No. I can't argue with the wisdom of the practice from a profit/loss perspective, but we all know the feeling we get and we don’t like it. This is one example of a "switching barrier" that keeps customers from jumping ship to a competitor. Cell phone providers have upfront costs they need to recoup so I understand the need for an agreement.
 
Here's my question for you today. How does a business create programs that keep customers in the fold without making them feel like caged animals? What switching barriers do you employ in your business? Do they add or subtract from customer good will?
 
Gary Lemke, Publisher
(Share your thoughts)
 
8/21/07 - More Switching Barriers
Yesterday, we talked about the switching barrier created by cell phone providers in the form of the long term contract. Switching barriers keep customers in the fold often making them feel like hostages because the cost of change to a competitor is too great.
 
Let me share some additional examples of switching costs offered by some of our readers. Consider the frequent flier programs that encourage people to fly an airline even if they may not be the most convenient or the most economical. How about the online bill pay services many banks offer? Once the customer has spent the time to enter specific payee information, they are less inclined to repeat the effort to move to another bank.
 
What do you feel are the best examples of switching barriers done well and ones that create more defection than retention?
 
Gary Lemke, Publisher
(Share your thoughts)
 
8/22/07 - My Own Switching Cost
I'm moving. To be more precise, I'm moving from one home to another. Fortunately, it's simply a move to a new neighborhood. It was a quick decisions and things are happening fast. My reluctance to embrace all the details of the move reminds me of our current discussion on switching barriers.
 
Dealing with details like packing, moving, selling, buying, and cleaning can be overwhelming. I had to smirk a little bit as I look around the house at the amount of “stuff” a family of five accumulates over time. If I didn't have so much stuff, the move would be tremendously simpler. And how much of that stuff do I really need? OK, I'll save that philosophical question for another time.
 
But in the end, the anxiety of the move has to do with "the stuff." Do your customers carry "stuff" (good or bad) that keeps them from switching to a competitor? We all carry "stuff" - memories, expectations, relationships, etc. - that keep us from changing. Wouldn't it be interesting to gain an understanding of your most valuable customers' stuff?
 
Gary Lemke, Publisher
(Share your thoughts)
 
8/23/07 - This Stuff Owns Me
Yesterday, I shared that I'm starting to plan a move to a new home and how the stuff we hold on to can create switching barriers. One reader shared the following:
 
"In my experience, fear of change is the most potent and least acknowledged reason why an otherwise outstanding sales or marketing campaign stalls and fails to meet its objective. Most of us don't do a good enough job of helping our prospect work through the dark side of the "What if" question. Fear is seldom dispelled by a list of features and benefits and can only be minimized when an atmosphere of trust and integrity is created."
 
It has been 12 years since my last move (California to Indiana - don't ask why I would do that). More than 80% of our possessions stayed stored in a warehouse for a year while our house was being built. When the movers delivered the lion's share of our possessions, I realized how rich my life had been without them. Life had gone on and I truly missed very few items. How much these things owned me rather than the other way around. How much does the "stuff" in our customer's brain own them in ways we (and they) don't understand?
 
Gary Lemke, Publisher
(Share your thoughts)
 
8/24/07 - What Do Customers Really Cherish
Yesterday, I shared my story about living without most of my possessions for over a year and how their absence had no measurable impact on my life. Conversely, they had no impact when they were delivered out of storage. So much stuff I never missed, or needed. I guess that is why we call it stuff, or better yet, junk.
 
One reader wrote, "Moving is an excellent way to determine what is really cherished. You make an interesting point about how great it would be to know what your customer value. For example, I can assume that antiques, photos, your children's blanket/favorite stuffed animal, good china, jewelry all immediately come to mind. What else? Imagine if your movers knew that you used the same coffee mug every morning because it was a gift from a favorite professor in college and even thought it was chipped, it was priceless to you. They would know to handle it with kid gloves like Great Granny's vase!"
 
When something is taken away and then returned, we often are able to determine it's true worth, or value. It's easier to ask, "did I miss it" rather than "will I miss it." It's amazing how often I can't discern the answer to the second question but how obvious the answer to the first question is once I've experienced the absence. The reader further goes on to suggest that with today's technology, businesses have the opportunity to discern what "stuff" really matters to customers by stating, "Companies now have a way of gathering this intelligence and fostering by implementing customer communities. They provide a place for customers to share best practices, ask for new services and products, and be passionate about your company by using the web 2.0 technologies." Will technology really replace the "will I" versus "did I" miss it question?
 
Gary Lemke, Publisher
(Share your thoughts)