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When Loyalty isn’t Loyalty at All
Posted by
Al Mackay at 12:00

I have recently switched network providers. I admit this to people sheepishly, because I was once a fierce and vocal brand ambassador for the network I have now left. I thought that they did an excellent brand job: fun and dynamic, relevant to - and celebratory of - local culture, they represented so many things that I love in a brand.

The problem, though, was that they weren't very helpful when I wanted to save money. I spend an obscene amount of money on my phone - a combination of data addiction and family members who live overseas - and I began to lose my sense of humour about it. I tried, on two occasions, to speak to my network provider about it. I asked them to analyse my spending and give me a solution to save me money. They would do no such thing.

There may be customers out there who are willing to spend hours going through various pre-defined packages and cross-referencing these to their phone bills to try and find the one that best suits their needs. I am not one of those customers. I am pathologically allergic to admin and I expect my service provider to provide a service; one that is relevant to me. They have all of my usage data - why can they not do something useful with it?

When a competitor came along with a drag-and-drop, build-your-own contract service, I switched in a heartbeat.

It made me realise that the telecommunications industry is built on inconvenience. The network providers trap you in contracts that give you too much of the things you don't want and not enough of what you do. They make it difficult to directly compare what you are getting against what you are paying for, against what the competitors offer.

There are plenty of other industries like that too. But quite a few have been radically changed. Before low-cost airlines disrupted the airline industry, you had to pay for meals whether you wanted them or not. Before iTunes disrupted the music industry, you had to buy whole CDs when you only wanted one track. And before City Lodge disrupted the hotel industry, you had to pay for all sorts of hospitality services that you didn't want.

Ultimately, forcing your customers into bundles and packages that they don't want is quite simply bad business. If they stay, it's not out of loyalty - it's out of inertia and inconvenience. Sooner or later a competitor will arrive that informs them instead of hiding information, and that uses their data to tailor relevant products and services for them instead of making them hunt for services that work for them. It's a precarious position to be in, and the surest way to survive is to be the first to disrupt. Think about:

  • What do your customers really want?
  • Are your formats (eg CDs) or distribution models no longer relevant - or actively frustrating?
  • How can you use the data at your disposal to build a useful tool for them?
  • How can your products and services be tailored to an individual level?
  • How can you empower your customers with tools and information to build their own packages?

The age of enforced loyalty and compliant customers is over. If you are not innovating to give your customers exactly what they want, you will soon be disrupted by an upstart who does. 

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UNCONVENTIONAL WISDOM®