Why it pays to get all tangled up with your customers
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Why it pays to get all tangled up with your customers

Are your customers satisfied with the products and services you provide? Yes? Congratulations. That and a few bucks will get you a nice Starbucks coffee.

Thing is, in surveys up to 50% of “satisfied” customers say they’d happily switch suppliers. That means satisfaction alone doesn’t give you a competitive edge, or help you retain important accounts.

So if satisfaction isn’t the magic bullet, what is? Research shows that it’s the pain your customer would feel if they were to stop doing business with you. These “switching costs,” according to the research, have twice as much influence as satisfaction.

High vs. low switching costs

If you’re selling highly differentiated and/or complex products, the switching costs for your existing customers are naturally high: For example, for someone buying an enterprise software solution, switching could mean costly downtime or lost data.

But if you sell less differentiated and complex products, the natural cost of switching tends to be low. So your challenge is to find ways to increase the pain customers would feel if they deserted you for another vendor. You can do this by “entangling” yourself with the customer.

These “entangled” relationships add value and become difficult for your buyer to unravel.

Let’s look at three of these entanglement strategies:

1. Make your impact visible

Maybe you don’t make a big deal of it when minor problems with an account come up. Maybe you just fix them, and don’t even tell the customer what you’ve done. No biggie.

But that’s a mistake. Your buyer may end up thinking: “This is stuff is routine. Any supplier could do it.”

The thing to do is spotlight the value you add. Don’t be shy about it, or fear tooting your own horn. You can find ways to routinely show your buyers what you’ve done for them lately and why it matters. Your customers will realize that life would be more difficult if you weren’t around.

2. Create more decision makers

Maybe with some of your accounts, you have just one contact who is the sole decision maker. In a way that’s good news: You don’t have to deal with a lot of red tape, egos and competing agendas.

But in another way, it can be bad news: If a competitor comes along and offers a big carrot — like a significant price cut — your one-contact approach may leave you with no allies at the customer company to stick up for you.

So think about involving additional contacts in order to leverage the power of your incumbency. Once you’ve brought in multiple influencers and decision makers, it’s not enough for a competitor to convince one person. The rival has to win over many people – some of whom might object to switching because of overlooked costs and inconvenience. These decision makers will have developed a stake in you that they won’t want to pull up.

3. Get entangled in the planning process

Don’t just ask about your customer’s plans. Get involved in creating them. That adds value for your buyer – and helps lock in your place in the company’s future.

For example, one decision maker says the company is thinking about creating products for a new market. “We have a division that sells to that market,” you might say. “If you like, we can help you set up a focus group.”

Of course, you’re going to be at that focus group. Afterwards, you’re going to try to get involved with the product development team – and, perhaps, get your parts specified into the new products from the beginning.

Building a wall

In short, you’re doing all you can to make the customer happy. But you’re also building a protective wall around your accounts.

Sure, another supplier might offer better terms or a lower price. But to switch, your buyer would have to pry itself loose from the entanglements that you’ve created.

Of course, you may not be able to employ every one of these four entanglement strategies with every buyer. But the more you use them, the harder it becomes for buyers to do without you.

This blog entry is adapted from the Rapid Learning module “Building Customer Loyalty: The entanglement strategy.” If you’re a Rapid Learning customer, you can watch the video here. If you’re not, but would like to see this video (or any of our other programs), request a demo and we’ll get you access.

The blog post and Rapid Learning video module are based on the following scholarly articles:

Mittal, B., & Lassar, W. (1998) Why do customers switch? The dynamics of satisfaction versus loyalty. Journal of Services Marketing 1998 (12):177-194.

Burnham, T. A., Frels, J. K., & Mahajan, V. (2003). Consumer switching costs: a typology, antecedents, and consequences. Journal of the Academy of Marketing Science, 31(2), 109-126.


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