Quickly logged in to my mobile phone provider account this morning. My Samsung Galaxy S3 LTE device, running CyanogenMod, is getting a bit long in the tooth. Eagerly logged in to have a look at the new phone models available (time for a Sony, or another Samsung?), imagine my shock and disgust when I realized that I am only due for a free upgrade days before Christmas this year. I stared in disbelieve at the date, looking at the accumulated bill in front of me, amounting to thousands per month. Surely this cannot be? I spend big bucks per month, so surely my phone is not an expense but an enabler? Allow me to elaborate. I burn in excess of 1000 minutes per month, spend a couple of GB’s of data (despite wireless all over my office and home) and even pop off a few text messages a month. Making sure that I have a top flight phone should be an investment not an expense! In fact, giving me a free phone once a year would great. And not a “free” phone, but a real free phone.
This got me thinking…do business execs ever place them in the shoes of their own customers? How do you think our local Telco exec’s would feel, having to spend two years waiting for the next “free” phone while shiny new tech comes along every day, and 6 months is an almost acceptable replacement cycle for certain tech goodies? Getting phones for free as an R&D expense is nice if your a telco exec, but for the rest of us it is torture…
So, customer lock in. This used to be a very acceptable business model, and it is easy to see why. 20 years to pay of a house, 5 years for a car, 2 years for that new “free” cellphone etc. So many services force you to be locked in for a fixed, minimum period. Don’t think I can easily cancel or reduce my golf driving range membership. No sir, despite your current work schedule and minor health issue, you cannot cancel or “park” your membership, locked-in you are. Order a local ADSL service from our monopoly provider and get a “free” wifi ADSL router, if sir will just sign here and be locked in for 2 years. Crazy!
Why does this happen? I now believe it is because many companies do not have the means and wherewithal to effectively compete in a constantly changing business environment. Why drive ourselves to constantly innovate and delight our customers, when we can just lock the suckers into a term contract? I hope the boardroom talk is not as blunt as that…
But, the world has changed. Even things like cloud computing platforms who bill you on a pay-as-you-go basis have you locked in, because getting your apps and data in and out is difficult or in some cases impossible. Thus while it is easy to turn your billing on and off, moving providers in not that easy.
Now take pity on my poor business partner for what I am about to say. Not only are we entering a new competitive market space, but achieving lock-in has never been part of my design or business plan. Why? Simple, I imagined myself as my own customer. How would I feel if I am locked into some sub standard and slow service? I’d be hopping mad, frustrated and ultimately tell all and sundry to avoid such a platform like the plague. No, the way I want to keep customers is by making it easy to get on my platform, make it easy to use, quick to provision, bill using modern flexible methods, and finally make it easy to leave if you are unhappy. Risky? Not all, if I constantly delight you, and charge you a reasonable rate, why would you want to move, I gave you no reason too 🙂 Will we have churn, sure, but those customers will also return when they go and try the alternatives and realize how easy getting in and out was with us. The pressure will be on us to delight and surprise our customers, keeping them with us out of loyalty due to the great service and deal they get.
On that note, a shout out to my peeps (Wilfred, Christian, Johan et all) at O’Galito’s Centurion. This Portuguese style restaurant has delighted me for almost 10 years. Last night I took some family there and we had a blast, great service and food. They have never dropped me once, which is why if you do business with me, are a friend or family, you’ll end up there with me sooner or later… Obrigado!