The Exploitation of Customer Loyalty & Inertia by Companies (and How to Combat It)

One of the most disheartening experiences as a consumer in a capitalistic economy comes when companies raise their prices unexpectedly on you. After sticking with one despite product flaws or service issues or easily available alternatives – only to receive an unexpected and disloyal price increase as compensation!

At times, even after raising their prices on you, that same company offers new customers irresistible prices and offers that you haven’t seen for years – even on your birthday! Even when asked nicely, these offers won’t come back around to you; that company just isn’t interested.

Unfortunately, you will encounter this kind of treatment repeatedly on your consumer journey; and it likely won’t get any easier over time. But on the bright side, there are actions you can take to change this dynamic and beat them at their own game.

As someone with more than a decade of experience working in marketing and advertising for some of the biggest corporations in the world, as well as closely monitoring consumer, business, and investing trends for decades now, I have noticed certain patterns which undermine customer loyalty:

Customer acquisition often comes before customer retention: companies often create massive customer acquisition channels through marketing and advertising departments, affiliate partners and external agencies – each incentivised to acquire customers with an eye towards “cost per acquisition” (CPA) targets in mind. Retaining existing customers, however, rarely receives as much consideration or value – rarely will there be an incentive or financial value placed upon keeping current ones as they churn.

Investors value customer count and revenue growth above any other metrics: Investors generally place greater weight on customer counts and revenues generated through new customers or price hikes for existing ones than any other measures of success.