Try This: Set customers free

In this new series, Marketing Week columnist Thomas Barta offers quick, practical tips to help marketers solve perennial problems and become better leaders.

Thomas Barta Try This

Bean counters love long-term contracts. A customer signs and the revenue is secure for three months, six months, twelve months. If the customer forgets to cancel, more cash rolls in. It’s tempting to make leaving hard for them.

Everyone hates to feel trapped. Someone tempts (or tricks) us into saying ‘yes’ and the next day, the hangover sets in. If you want dissatisfied customers, lock them in.

Setting people free is better all round:

  • ‘No ties’ makes your market bigger. Amazon Prime, Netflix, Spotify – the world’s fastest-growing subscription brands make cancelling (at any time) simple. Because the risk is low, more people sign up.
  • ‘No ties’ can increase profits. A phone carrier had two customer types: long-term contract customers, lured in with subsidised phones, and pay as you go customers, with no sign-up benefits. The accountants loved the predictable contract customers. But the pay as you go people generated more profits. Locking people in comes at a price.
  • ‘No ties’ makes your firm better. If a customer stays because they have to, what does this say about your brand? Great marketing isn’t just about attracting people. It’s about serving them better than competitors do. Every day.

Try This >>

Don’t aspire to lock people in. Aspire to be the brand people choose—time and time again.

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