Customer inertia – the force that marketers fear most

Despite approaching the upper platform of the organisational pyramid, I believe one should never give up learning. Thus I attended a session this week with a business school professor, who talked – among other things – about Michael Porter and his famous Five Forces.

Those familiar with Porter’s work will know of his belief that there are five principal sources of competitive pressure impinging on each brand in an industry sector and the collective strength of these forces determines the attractiveness of that sector to new entrants – and the behaviour of brands already competing in that market. The five forces are: the threat of new entrants, the bargaining power of buyers, the threat of substitute products or services, the bargaining power of suppliers and the rivalry among existing competitors.

But I think there is a sixth force. One that is potentially more powerful than any of the other five and that marketers fear most: customer inertia.

The biggest challenge for new entrants is getting customers to change their behaviour; to be prepared to leave their trusted brand and try a new one. The reason that both the energy and banking sectors have had their collars felt by the competition authorities of late is largely that new entrants have been reluctant to enter either sector, not because of market abuse but due to the levels of prevailing inertia – despite sustained multimillion-pound advertising campaigns and the arrival of price comparison websites. Fewer customers switch bank account or energy supplier than change their spouse, despite the fact that the former would almost certainly save them money while the latter would definitely bankrupt them.

Porter was writing in the late 1970s, when the web and social media were twinkles in the respective eyes of Tim Berners-Lee and Mrs Zuckerberg. But it is interesting that in those two sectors at least, the digital age has failed to address this inertia challenge – especially as neither can claim high levels of inherent loyalty.

I can see it now: The Secret Marketer’s Six Forces. It has ‘bestseller’ written all over it.

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