Why locking customers in is counterproductive
Thanks to targeted advertising it has never been easier for a business to acquire customers. The precise nature of these techniques means that a brand can reach exactly the right profile of person, at scale, in an instant, through a variety of platforms.
Every day I see ads asking me to sign up to this, or download that app, tempting me with prospective discounts and sign-on bonuses. I’m not ashamed to say that I’ve taken advantage of a fair few referral schemes to get my hands on a cash reward in the past, even when I’ve had no intention of using a service in the long term.
But it goes to show that clicks and conversions can rocket if you get your campaigns right. It’s what happens next that many brands struggle with.
Acquiring loyal customers
Of course, the holy grail for brand marketers is turning one-off customers into repeat customers. Loyalty is the key to long-term success, but there’s a tendency among many brands to try and achieve this using underhand means.
It's very easy to hold on to customers by making it very difficult for them to leave, by hiding the 'unsubscribe' link or requiring them to call during office hours, for example. But unless a customer is actually buying something from you on a regular basis, what real value do they have?
(Of course, there might be some value to a business to have a large number of 'databased' customers that have been locked in. It’s a number that can be used to please potential and existing investors. If that is the kind of dishonesty you want to be involved in, you probably don’t deserve to succeed anyway.)
In my experience, this practice is counterproductive. Making it difficult to leave can turn a customer’s opinion of a brand from 100 to zero in just a few seconds. It’s happened to me plenty of times, as I’ve struggled to make an AI chatbot understand that I want to deactivate my subscription.
Customers aren’t hostages
While the objective for many of these companies seems to be to dissuade me from unsubscribing by making it so difficult or tedious to do, you have to question why they don’t spend their time and energy trying to impress me instead. Organisations should be asking themselves: Do we want a captive customer, or a happy customer?
Many brands fall into the trap of doing what is easy, rather than what is effective. You could send out 10 different email campaigns to your entire customer base over the course of a month. Tick some boxes, generate a few additional sales, create a slidedeck to show in the next management meeting. Perhaps accidentally ‘forget’ to mention how many ‘unsubscribe’ requests the campaigns generated.
Or you could spend time planning which particular segments you should target, what kinds of personalised offers and discounts to include, what kind of value-added content there should be and so on. You might not send out nearly as many emails, but I guarantee you this approach would be more effective.
The fact of the matter is that you actually have to deliver continuous value to your customers through your products and services to ensure they love you and want to keep coming back. No matter what the product or service is that you are offering, a great deal of time and effort needs to be spent making sure that the user experience is as close to perfect as possible.
The slightest hint of friction can cause a customer to lose interest. In today’s highly saturated market, consumers have a multitude of services to choose from — so if you don’t come up to scratch, they’ll be signing up with your competitors instead. And even if their name remains on your database, they won’t really still be your customer.
One key area of friction that I’ve seen a lot in the world of fintech and financial services revolves around the onboarding process. Some brands tempt a new customer with targeted ads, but then can’t get them set up to actually use their service for several days or even weeks afterwards.
In all fairness, there is a great deal of red tape involved in financial services, with compliance checks and KYC (Know Your Customer) rules to adhere to. But if your competitor can complete these processes in just a few minutes, then you’ve just lost out.
Generating loyalty among your customer base by making them feel loved is the way forward. Don’t make them feel trapped. Give them a great experience; make everything as easy as possible for them; and show them that you know what kind of things they are interested in.
More than anything, never stop looking for new ways to surprise and delight them. Innovation is always appreciated — you might not get everything right 100% of the time, but at least it shows you care. If you don’t try and do new things to please your customers every once in a while they will feel your apathy acutely.
But also remember not to go over the top. Don’t bombard them with emails as if you were a jealous lover. Ensure that each and every communication you send is tailored for that customer, carefully curated with relevant information and offers. Less is more in this case.
Businesses should be looking to build a relationship with customers based on love and doing things that will keep them coming back through choice — not because they can't escape. If they love you, they will keep coming back.