Herek's Blog
The Art & Science of
Client Retention
The place where I share my deep thoughts, observations, experiences, and frameworks
#33: How planned obsolescence erodes trust?
Do businesses have our best interests at heart?
Can we trust them at all?
No trust = No sale = No retention.
Trust is the foundation of all relationships.
People buy from those they trust and feel safe with.
But not all types of trust are created equal.
We've covered this in post #28, where we discussed the Trust Pie.
Gain in one type of trust can lead to a sale.
But erosion of another trust type can lead to retention failure.
In this post, I'll show you a perfect real-life example.
This is based on my personal experience with a company...
And observing what other customers say about the company in online forums.
A few years ago...
I received a notification on my sports watch.
It prompted me to install a firmware update.
I trusted the company's intention to help improve our watches.
I installed the firmware update... I regretted it immediately.
The update caused my watch to crash when it was working perfectly before.
After the update, it can't even be turned on.
I emailed the company.
They asked me to contact the local dealer for a new watch exchange.
I got a new watch of a different model delivered to my doorstep in the end.
Even though the price of the new watch was lower than my original watch...
At least I've got a functional watch.
I've got no complaints.
As I mentioned, that was a few years ago.
Things changed along the way.
I saw on a Facebook community where people were complaining about the watch.
Again, same issue: The firmware update caused the watches to malfunction.
But this time...
No watch exchange was offered.
No free repair was offered.
This was what one watch owner said, "They acknowledged the shutdowns after the firmware update... So there's no dispute about what happened or what caused it... The watch is out of warranty, so they won't fix or replace it. Instead, they generously offered me 20% off a brand-new watch - which they called the 'highest discount' they could provide, valid for one-time use."
The watch owner was upset because of this:
Why Customers Feel Betrayed In Such Situations...
Whenever we purchase a product or a service...
We are looking to solve a problem.
Based on the Trust Pie, there are 4 types of trust:
1) Trust in Expertise.
2) Trust in Competence.
3) Trust in Intention.
4) Trust in Character.
We trust in a business's expertise and competence to solve our problems.
We don't expect the business to hurt us when we're paying them.
We trusted their intentions to help us remove a problem.
We don't expect them to create more problems out of nothing.
We don't expect to be worse off after spending money.
But when the company did something that created new problems out of nothing...
And the solution they gave is to "buy a new one with a discount"...
Trust is eroded.
The disappointment is a trust leak.
And it's caused by the expectation gap.
Like that watch owner said...
It felt like the company was trying to increase sales.
It felt like a Profits > People move.
Because a firmware update is supposed to enhance the product for the user.
It's not supposed to break the device and ask the user to buy another one.
This negative experience caused a loss of Trust in Intention.
I don't have insider info to say whether this is "planned obsolescence"...
And I'm not going to cross the line and say it is.
The point is: Even if it's unintentional...
The way their customer service handled these issues has caused trust erosion.
In case you're wondering if this has happened with other brands...
Here's an article from BBC.
You can read and determine for yourself whether it's fair.
What This Means For You As A Business Owner?
Friedman's Doctrine states that businesses should always maximize their revenue to increase returns for shareholders.
This is in line with the Profits > People philosophy.
It's about Extraction > Service.
If you choose to adopt this philosophy of prioritising profits...
Planned obsolescence will seem like a justified strategy to increase sales.
Because it forces people to spend unnecessarily when the problem wasn't there in the first place.
But you've seen the consequence above.
It erodes Trust in Intention.
When customers and clients feel that the business doesn't care about them...
Loyalty is lost.
Even if the business is competent or is the expert in what they do...
People start looking for alternatives.
People don't like to feel extracted.
They like to be served.
Voluntary Retention turns into Utility Retention.
People will leave as soon as there's a better alternative from the competitors.
Planned obsolescence doesn't give clients and customers a good experience.
It's a good way to damage trust and reputation.
What This Means For You As A Consumer?
If you encounter a business that uses planned obsolescence...
You're likely to be better off buying from other alternatives.
I'm not keen to pay any company that keeps giving me problems to make me buy more stuff from them.
I'd look for a company that prioritises People > Profits.
Because I want peace of mind, knowing they have my back.
I spend money to have my problems solved. Not to get more unnecessary problems.
Having said that... Here are some things you may want to consider.
Nowadays, many businesses are adopting AI.
Some use AI agents for their workflows...
Some have laid off their employees to cut costs.
Have you ever thought of these scenarios:
1) If watches can break from a firmware update... Is it possible for AI companies to break your business when you rely on their agents?.
2) Are you quietly handing control of your business over to the AI company that owns the agents?
3) Do you still have a business if the agents stop working suddenly due to planned obsolescence?
Because AI SaaS companies can carry out "planned obsolescence" in a different way.
They don't break your tools.
They can just quietly change what's included in your pricing tier.
You may find yourself paying for additional credits or needing to upgrade to a higher plan...
When those features were previously included in what you paid for.
What The Company Did For Service Recovery
I later read on an online forum that the company CEO stepped in to intervene.
They released a statement saying the firmware update was meant to benefit the users.
So they didn't mean to cause inconvenience for them.
They claimed that out of over a million watch users...
There were only about 100 customer service requests that reported their watches were bricked after the firmware update.
So it was only a small percentage.
They pledged to replace those damaged watches for free.
The interesting thing was...
Some feedback that the "20% discount offer to get a new watch" was done by the company's automated chatbots.
They requested the option of speaking to a human customer service officer.
They didn't like the idea of speaking to a chatbot and were unable to get a resolution.
This isn't uncommon.
Many businesses try to cut costs by adopting chatbots and AI to attend to humans.
It can cause a lot of frustration when the bots lack flexibility and discernment in addressing each case.
There are nuances in human communication that bots cannot replicate.
This is a HUGE lesson for all businesses.
Even though Friedman's Doctrine talks about maximizing profits for shareholders...
And cutting costs does exactly that.
But at the end of the day, businesses must NEVER forget why they exist.
Businesses exist because clients and customers buy from them.
Without the support of clients and customers... The business dies.
So it's folly to prioritise Profits > People.
Because money itself is a non-living thing.
When the business focuses on extracting money...
They tend to neglect the people they're supposed to serve.
They create a poor experience for people.
And the irony is... The people are the ones who have money.
It should be common sense to serve people well...
So people willingly want to spend money on the business.
Every business should prioritise People > Profits.
Every business should try to create a great experience for its clients and customers.
Every business should aim for value creation and not value extraction.
That's the only way that everyone wins together.
People > Profits.
Always.
- Herek
P.S. If you'd like to explore more of my Client Retention content...
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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!
Table of Contents
#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
#35: Why Personal Branding And AI Are Not Saving Your Business?
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