Barriers to exit

One of the tenets of 1to1 Marketing, or CRM, is the creation of a 'learning relationship' with our customers. By learning from every interaction, we can build services and products that are so customized to the individual that it makes it difficult for them to leave. Even when our competition matches, or even exceeds, our offering, the cost of 'teaching' a new provider what we already know may be too much for the customer to bear.

One of the tenets of 1to1 Marketing, or CRM, is the creation of a ‘learning relationship’ with our customers. By learning from every interaction, we can build services and products that are so customized to the individual that it makes it difficult for them to leave. Even when our competition matches, or even exceeds, our offering, the cost of ‘teaching’ a new provider what we already know may be too much for the customer to bear.

I was recently on the client end of a fascinating example of this in action. A few months ago, I was introduced to a U.S.-based service at www.bigstep.com. Bigstep offered templates and tools to allow a small business like mine to create a Web site – for free. Having been frequently asked by prospective clients for my Web address, I thought I’d give it a try. I decided to use this as a ‘scratch pad’ to help me determine what I would need on a site – with the intent to build a ‘proper’ site later.

With considerable ease and no programming, I began building pages. Every time I returned to the site, Bigstep welcomed me personally, told me what pages I’d already published and which I was still working on, and offered me others that might be of value for my business. I was quickly hooked, and completed sections detailing my services and contact information and linking to my published articles.

In addition to the basic pages, Bigstep allowed me to build a visitor survey and distribute an e-newsletter, carefully maintaining and safeguarding my visitor information. They provided me with the ability to track site visits and referrer information. In short, they remembered me every time I visited and maintained everything I needed to manage my Web presence.

But this column is entitled ‘Barriers to exit;’ so far, the story hasn’t provided any compelling reason for me to want to leave. In an unfortunate coincidence, two days after I gave my new Web address to all my clients, business associates and prospects, I received an email from Bigstep; as I had suspected, they had determined, like many of their counterparts, that giving everything away for free just isn’t a sustainable business model! Now, the service that used to be free was coming with a price tag; due to the complexity of my site, I would be required to pay US$24.95 per month.

My immediate reaction to the news was to look for another provider. I investigated having the site custom built, but balked somewhat at the associated price tag. However, Bigstep has a number of competitors still offering this type of service for free. Great! I’d switch to one of those, I decided.

It didn’t take me long to realize, however, that there is a huge cost to starting from scratch. Bigstep already had a list of all my services and a record of every link I wanted to use. In addition, it had a record of my registered site visitors and a history of my site traffic – things that are more difficult to recreate.

While I was investigating other options, I also communicated with customer support at Bigstep. A fabulous representative used what Bigstep knew about my company and my Web site to customize the new offering. She was able to provide me with ways to redo a couple of my more complex pages. It now seems likely that I will end up with almost the same functionality for a US$9.95 per month price tag.

By creating a learning relationship, in addition to providing excellent customer service, Bigstep has kept a customer. In spite of the new costs, they have made the price to leave just too high. They have effectively created a ‘barrier to exit.’

Of course, this is also a lesson on the perils of depending too heavily on an ASP – and eventually I will probably go down the custom-built route. But, for now, I’m going to give their new business model a try.

Learning relationships can create ‘barriers to exit’ for all sorts of businesses. If my online grocery retailer were smart, they’d remember when I last purchased toilet paper and ketchup and how frequently I purchase them, and remind me when I am running low. Then, even if my favorite offline grocery store moves online, I’d have to think long and hard about whether I was willing to invest the time it would take for them to know me as well as my incumbent e-commerce site.

Emma Warrillow helps her clients assess and gather data, tools and resources to get the most out of their customer relationships. Her Bigstep-powered Web site can be viewed at www.emmawarrillow.com.