Why I Continually Spend 5+ Figures with Companies I Dislike
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Chapter 1: Understanding Repeat Business
When considering a substantial expenditure—such as five figures—the initial thought that comes to mind is often the "likability" of the product or service. Surely, one must appreciate what they're spending their money on, right?
However, I must confess something rather embarrassing: for years, I've directed a significant portion of my business funds toward vendors, software, and service providers that I don't particularly enjoy working with—sometimes, I can't even stand them.
At this point, you might think I'm foolish for committing to these companies year after year, despite the dissatisfaction. Yet, I've made this choice consciously, and there's a compelling reason behind it. It's the same reason businesses can attract and retain customers for years, even without an automatic billing system. The ultimate goal isn't to deliver an unsatisfactory service or to build a customer base that resents you; rather, it's to combine this approach with a positive experience for a true win-win situation.
Section 1.1: Reasons for Discontent
Let's clarify: customers are unlikely to return if they dislike your product or service—this is a given. However, it's essential to acknowledge that many factors contribute to a customer's overall experience beyond just the service itself.
- Non-Responsiveness: I once hired an accounting firm known for their delays, particularly during tax season, despite paying them significant sums across various ventures. Although they eventually completed the returns, their lack of communication made me reconsider my options.
- High Costs: Several of my businesses have relied on a software tool that has become increasingly expensive, more so than its main competitors. It’s not superior to those alternatives, yet I continue to renew my subscription.
- Underwhelming Results: I have invested tens of thousands in a marketing firm whose results were far inferior to the outcomes I achieved when managing the campaigns myself. Yet, I kept them onboard for over a year.
If a company provides a necessary service, you might tolerate poor customer service, rising prices, and diminishing results for a while—not indefinitely.
Section 1.2: The Unseen Connection
Despite the frustrations with these vendors, there is a commonality that explains my continued patronage, and it’s a strategy I plan to implement in my future endeavors.
As an entrepreneur, I know there’s fierce competition. I realize that there are numerous accounting firms, newer and superior CRM software options, and a plethora of marketing teams eager to claim high success rates.
I don’t stick with these frustrating vendors because they’re my only choice—similarly, your customers won’t return for that reason either. Each of these companies has employed effective onboarding processes, integrating their services into my business operations.
For example:
- The accounting firm has managed my finances across various ventures for over seven years, leveraging historical data for current benefits.
- The CRM system holds vast amounts of leads and automations that facilitate my marketing and client onboarding.
- The marketing team dedicated months to testing and optimizing campaigns, becoming intimately familiar with my business and customer acquisition strategies.
In essence, these companies have embedded themselves deeply into my operations, making it painful to remove them—even to seek better alternatives.
Chapter 2: The Cost of Switching
The thought of transitioning to a new accounting firm, for instance, is intimidating. It would likely incur greater costs and demand a considerable time investment, possibly yielding similar or inferior outcomes.
Even if I move my leads to a new CRM, I risk losing historical data and recreating numerous automations, which would entail a significant learning curve. Similarly, although I’ve been underwhelmed by my current marketing team, they have invested time in understanding my business. Starting over means entering another lengthy trial phase with no guarantees of better results.
The common thread linking these companies to my business is encapsulated in three words: high switching costs. Their integration into my operations has made them indispensable, creating a reliance that makes switching options seem overwhelming and fraught with uncertainty.
In summary, I’m not advocating for locking clients into subpar services. Ideally, you would provide offerings that customers genuinely appreciate. However, to ensure long-term business relationships with minimal customer turnover, it’s crucial to create “stickiness.” Establish strong ties with your clients, offering services that build upon previous experiences. You can make your business seem essential, even without monthly memberships or automatic billing.
5 Questions to Assess Your Business's Stickiness
To foster client loyalty, consider the following questions:
- Are you offering something that customers cannot easily replicate or transfer?
- Have you developed valuable relationships or networks within your company or platform?
- Do your services enhance over time, providing increasing value?
- What unique benefits would clients lose if they decided to leave?
- Would switching back to your service be a difficult, slow, or costly process?
You don’t need to intimidate customers into repurchasing. If you establish your business as an integrated necessity with high switching costs, clients will remain loyal time and again.
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