Know the cost to move from your existing platform and estimate the switching costs for![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2021\/03\/Switching-costs2.jpg\")
moving from a competitor\u2019s product or service to yours.\u00a0 Offer incentives to existing customers to stay, and for competitor\u2019s customers to switch.\u00a0 Protect your base with incentives to stay that are intangible – such as membership in an insider\u2019s club, access to special deals not available to others, and attention from the executives at the top.<\/p>\n
The costs of replacing a lost customer<\/strong><\/p>\n The momentum from an old decision that took lots of effort to implement is worth something to a marketing professional.\u00a0 To keep an existing customer, even if by offering discounts, is much less expensive than the cost of attracting a new one.\u00a0 To reduce switching cost from a competitor is to lower the barriers to a quick decision that might have been otherwise much harder to make.<\/p>\n Consider increasing the cost of your customer\u2019s switching<\/strong><\/p>\n Increase the barriers to your customer\u2019s switching, not just with excellent service, but with some form of personal touch.\u00a0 Recognizing a longstanding customer with an appropriate gesture from the top is best of all.<\/p>\n A personal story to illustrate the point<\/strong><\/p>\n [Email readers, continue here…]\u00a0<\/em> <\/span>\u00a0Recently, I received a hand-written letter from two co-CEOs of a company I had helped with a few hours of time.\u00a0 They accompanied the letter with a customized gift of their product that contained the logo and name of the college where they knew I was a trustee.<\/p>\n The lesson from extraordinary effort<\/strong><\/p>\n And that is a lesson for all of us in marketing.\u00a0 Find the right way to reach existing customers that stands out from the usual.\u00a0 Find an offer that makes switching easy for others. Pay attention to opportunities to differentiate yourself from the rest.<\/p>\n Someday I will file the letter and put away the customized gift.\u00a0 In the meantime, those two guys got many more miles from a relatively simple gesture than I would have thought possible.<\/p>\n","protected":false},"excerpt":{"rendered":" We know that one of the ways we hold onto our customers is if there are high switching costs to move away to a competitor. \u00a0But how about the other side of the coin? \u00a0Do you have an estimate of … Continue reading ![\"\"](\"https:\/\/berkonomics.com\/wp-content\/uploads\/2017\/07\/red-apple-for-teacher1-300x299.jpg\")
First, I have not received a hand-written letter other than a greeting card from any business associate in what feels like decades.\u00a0 I was in such shock, I did not respond in kind.\u00a0 What to do?\u00a0 Pull out a piece of stationery that had been sitting unused for over a decade and write in longhand?\u00a0 You aren\u2019t supposed to respond using a less personal vehicle than the original one. So, email was out. A phone call might have done it, but not with the elegance of the original correspondence.\u00a0 Now, every time I turn from my desk to the credenza behind, I see that letter and gift.\u00a0 I am not willing to just file the letter or put the gift on the shelf. \u00a0That\u2019s the power of a great outreach from the top.<\/p>\n