I covered the 15 silent killers of client retention in the previous post.
Take some time to read that first if you haven't.
Because in this post, I'm going to discuss my personal experience with a business.
And you'll spot how many of the 15 silent killers they have adopted.
Whether the company did it knowingly or unknowingly... I don't know.
That's also not the main point.
The main point is... Don't commit the same mistakes.
Or risk losing clients (or customers), trust, and reputation.
I have already left... And I'm not buying from them again.
I was looking for a video hosting platform.
I saw an irresistible offer:
- One-time payment.
- Lifetime access.
- Unlimited storage space.
Without a second thought, I made the purchase.
I was sick of paying monthly or yearly subscription fees.
This type of offer was never seen anywhere else before.
That was why I found it appealing.
A few years later...
I received an email from the company.
The email said it was no longer sustainable to continue providing lifetime access...
Due to the rising costs of bandwidth, encoding, storage, APIs, and other related services.
The company decided to switch our lifetime plan to a subscription-based plan.
Now, each subscription tier is based on the storage space provided.
The more we pay, the more monthly bandwidth we get.
That's not all.
The announcement came with an ultimatum:
Lose access to our account if a subscription plan isn't chosen by a certain date.
The company didn't keep its promise.
Trust has eroded.
All the reasons that made me buy in the past have been removed now.
In the current subscription plan...
I don't see anything special between them and other video hosting companies.
So the question is... Why should I continue buying from them?
There's no more meaning in staying.
They have removed their uniqueness.
They have become similar to their competitors.
The thing that pissed me off the most...
Was the ultimatum they gave.
I bought the lifetime plan from them to remove a problem.
Now they created a problem for me even though I've paid...
And they still threaten me with restricted access to my account?!
Isn't that absurd?
That was not why I decided to do business with them in the beginning!
The way they communicated was the deal-breaker.
This is obviously a Profits > People move.
The company created a negative impact on the customer experience for me.
I ignored their ultimatum.
I didn't choose a new plan to sign up for.
I just ignored the account and let them do whatever they want.
Even if they're going to remove all my videos from the account.
So be it.
Be my guest.
The Retention Formula states:
Trust + Meaning = Retention
Since there's no more trust and meaning...
They failed to retain me.
I'm out.
I felt that the company didn't value me.
I felt I was treated like an idiot.
I felt they had taken us, the long-time customers, for granted.
It was as if what they promised at the beginning didn't count.
They just shifted the goalposts and expected us to play by their rules.
If they prioritised People > Profits...
They wouldn't have created such a negative customer experience.
Jay Abraham mentioned there are 3 ways to grow a business:
1) Increase the number of clients.
2) Increase the frequency of buying.
3) Increase the transaction size.
Many businesses obsess over Option 1.
They keep trying to get new leads and sell to new people.
But that's the most expensive option.
Because it's harder to make a sale when people don't know and don't trust you yet.
It's easier to get someone who knows and trusts you to buy from you again.
That's Option 2.
By changing our lifetime plan to a subscription plan...
The company is trying to increase the frequency of our payments to either monthly or yearly.
If we choose the annual payment...
Then it's also using Option 3: Increasing transaction size.
Since it's a larger amount of money paid annually.
Now that we know what the company did pissed me off...
What is a better way?
These are my thoughts...
The company is trying to make more money.
So it couldn't afford to let the lifetime plan buyers stay without recurring payments.
But the truth is... They could make that happen if they want to.
Solution 1: Only sell the new monthly or yearly plans to new customers.
There is a better way to make more money... Without pissing anyone off.
Maintain the status quo for the existing lifetime plan members.
No additional payments.
Rationale: Lifetime plan members who stayed with the company for years should continue enjoying the privilege. It's to thank them for their support in the beginning stages of the business. The long-time members also feel appreciated.
Solution 2: Offer value-adding services as upsells.
People are willing to pay for solutions to their problems.
If the company made additional offers that genuinely help the lifetime plan members...
It's not difficult to increase revenue with great offers.
Rationale: Changing lifetime plans to subscription plans feels like a betrayal. People bought from the company because of trust. Not honoring what they promised results in trust erosion. But providing additional solutions to help existing members? No one would blame them for creating value to help members.
Solution 3: Selling lifetime plans at a higher price to new customers.
Lifetime plans fail to be sustainable because the current price is too low.
The company could improve the situation if new members bought at a higher price.
This way, the existing lifetime members also wouldn't be affected.
Rationale: Existing lifetime plan members won't feel betrayed or penalized. Because prior promises weren't broken. New members decide to buy it willingly. They had not been misled, as long as what was newly promised will be delivered after purchase.
Because how people feel about each solution was considered.
The 3 solutions focused on keeping promises and sustaining trust.
People feel emotionally drained when trust is broken.
None of the 3 solutions resulted in the breaking of promises.
Existing lifetime plan members don't feel shortchanged.
They feel valued and respected when their interests are prioritised.
They feel appreciated when promises are kept.
When the priority is Profits > People...
It creates many downstream problems.
The people who placed their trust in the business end up feeling disappointed and angry.
People feel extracted instead of served.
A poor customer experience is created when the business only sees short-term benefits.
Solutions that focus on People > Profits have an unfair advantage.
They protect and deepen human relationships.
Happy customers are more likely to buy more frequently and spend more with the business.
They also tend to make referrals. This becomes free marketing.
For the business in this case study...
They created an angry customer in me.
Just because they went back on their promise and tried to extract more from me.
Do you think it's worth it when there are many other ways to increase revenue?
Sustainable businesses understand this:
People > Profits.
Always.
- Herek
P.S. If you'd like to explore more of my Client Retention content...
Feel free to follow me on the following platforms:
- LinkedIn.
- YouTube.
If you'd like to have a peek at my personal life...
I post more personal stuff on:
P.P.S. In case you missed it... Read the Client Retention Top 10 FAQs HERE. Then you'll understand our philosophy behind everything we do.
I look forward to sharing more with you in the next post.
If you enjoyed reading this post... Feel free to check out the other posts!
#8: What Is The Retention Architecture Model: The 3 Layers Explained
#9: The Hidden Costs Of Ignoring Retention Principles (No One Talks About This)
#10: Why Clients Still Leave Despite Enjoying Great Service?
#11: Why Have Traditional Marketing Tactics Lost Effectiveness?
#13: Why Businesses Lose Clients: The Hidden Role Of Trust Leaks
#16: Where Does Client Trust Break Down? The Trust Leak Stages Explained
#17: Why Tactical Optimization Can't Fix Weak Business Foundations
#18: What Should Consultants Do When Clients Insist On Their Ideas?
#21: Why Do Clients Request A Refund? (It's Not What You Think)
#22: Case Study 1 - How Retention Principles Saved A Marriage...
#25: Read This If You Use AI In Business (It's Killing Client Retention... And More)
#29: How To Increase Client Lifetime Value Using Retention Principles
#30: Why Most Client Retention Tactics Don't Work (And What Actually Does)
#31: Why Business Partnerships Fail (And How Retention Principles Fix It)
#32: How To Increase Client Retention (Without Contracts & Loyalty Programs)
#33: Planned Obsolescence: How Software Updates Quietly Profit From Your Trust
#34: The Retention Architecture System: How All The Frameworks Come Together
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