How do you keep your customers from going to your competitor? What kind of benefits should you offer customers?
To lock customers in, encourage them to dedicate time, effort, and resources to your products and services. This allows you to charge premium prices and deters competitors from poaching your customer base.
Below, we’ll look at how to keep customers coming back and prevent them from giving your competitors business.
Lock Customers In
Hamilton Helmer explains that the more time, effort, and resources customers invest in adopting your products, learning your systems, and building familiarity with your brand, the more resistant they become to trying other options. This resistance stems from customers’ reluctance to abandon their investments, the comfort they develop with your brand, and the disruption changing providers would cause to their established routines. These combined factors make it challenging and often unprofitable for competitors to attract your customer base, even if they offer better products or services.
(Shortform note: Christensen (The Innovator’s Dilemma) warns that focusing too much on learning how to keep customers coming back may make you vulnerable to competitors with newer, more innovative business models. He explains that, just as established companies often struggle to challenge innovative business models due to their focus on existing customers (as discussed in Strategy #1), companies that prioritize locking in current customers tend to overlook emerging threats. For example, a plant-based meat company that, in an attempt to increase customer loyalty, encourages customers to purchase specialized cookware for their products might get blindsided by a competitor offering simpler cooking methods that don’t require extra cookware.)
How to Lock Customers In
According to Helmer, you can lock customers in with three methods:
1) Offer multiple benefits: Provide incentives to discourage customers from changing providers. For example, offer loyalty programs with accumulated points, provide specialized cooking equipment optimized for your products, and foster a strong online community of plant-based cooking enthusiasts.
(Shortform note: Byron Sharp (How Brands Grow) challenges Helmer’s advice to offer multiple benefits to existing customers. He argues that incentives such as loyalty programs and specialized offerings fail to impact customer retention or sales growth. This is because people will only buy things when they want or need them, regardless of how many incentives you throw at them.)
2) Leverage customer routines: Integrate your products and services into customers’ daily workflows and habits to make your brand indispensable. For example, offer meal planning services such as subscription plans that deliver curated selections of your products, or a meal planning app that integrates with your brand’s smart kitchen appliances.
(Shortform note: Clayton Christensen (Competing Against Luck) suggests that identifying the root motivations behind customer purchases can help you integrate your offers into their routines. To implement this approach, conduct customer interviews to understand the context in which they use your products and services. Then, use these insights to develop solutions that address their underlying needs. For example, if you discover that customers buy your plant-based products to reduce time spent cooking, you might develop ready-to-eat meals or partner with a meal-kit delivery service to make your products more convenient choices.)
3) Ensure ongoing satisfaction: Focus on providing excellent customer service to foster trust and loyalty—happy customers are less likely to consider offers from other providers. For example, provide a forum for customers to share their feedback, promptly address their concerns, and adapt your services to meet their evolving needs and preferences.
(Shortform note: Business experts Ken Blanchard and Sheldon Bowles (Raving Fans) add insight into how fostering trust and loyalty helps you keep your customers. They explain that trust and loyalty are emotional benefits that hold greater significance in customers’ minds than the potential value gained from switching to competitors. According to them, the key to inspiring customer loyalty and trust lies in consistently creating personalized experiences that surpass customer expectations.)
