Being a "loyal customer" is increasingly a sucker's game. Need to be as mercenary about purchasing decisions as companies are about their ToS and business models.
"Frequent user/loyalty" programs are, across sectors, implicit acknowledgement by companies that their products are indistinguishable from those of their competitors.
These companies often assume that they can spend money to acquire customers but that those customers will stay loyal when the money hose turns off. If you have a fucking amazing product and spent the money to get people over the activation energy of trying it, that’s true. But a lot of these customers came to you for the bargain and flee as soon as the bargain dries up.
In the broadest sense it's almost always better to attract customers by simply building a better product rather than some form of trickery, like making subscriptions unreasonably hard to cancel. Sure you might leave a little bit of money on the table in the short term, but as the author mentions it's hard to quantify the long term cost of being a bit of an asshole.
The prevalence of these sorts of tactics demonstrates the extent to which we've MBA-ified the tech economy away from what people used to like about it.
It's like with Lenovo and SuperFish. Even if you have a perfectly good business model and satisfied customer, there's nothing stopping some greedy people to try and extract even more value from their customer.
Brand loyalty is practically a myth at this point. I don't use any service or any product without some reservations about the company that made it, especially when it comes to apps and cloud stuff.
People I talk to about this sort of thing USE online services, but we're also fully backed up and ready to move at a moment's notice. Probably a consequence of watching so many of these things go up in smoke.
Yet another business that took the approach of "customer adoption first, actual business model second." It's so frustrating to see this play out time and time again.
So much of the current economy derives benefit from captive customers who are charged ridiculous fees because they have no other place to go (think drinks at a movie theater or baggage fees on an airline, but there are many versions of the captive-customer squeeze), use extortion-type tactics to retain customers (you lose functionality of the product you've "bought" if you leave or otherwise lock you into their product making it painful to leave), or otherwise strong-arm their customers from leaving once they have them on board (high termination fees, impossible cancellation methods, threatening collections if you do a chargeback).
Many SaaS compaines even do this -- luring their customers in with low or even free offerings and then turning off those free or low priced offerings to force their users into higher paying brackets without providing any additional functionality. Pipedrive just announced that they are sunsetting their popular Esssentials plan for no really good reason than to squeeze their customers into a higher plan. I have had other companies decide to arbitrarily double or even quadruple the price of their offering for the same features because they can't find any other way to generate more revenues and probably didn't have the right price to begin with if it can't sustain their business.
Are these products good? Yeah they're decent enough. But these tactics say more about trying to squeeze every nickel not only out of those who would otherwise want to leave, but even those who would like to stay.
Think about how many non-basic need products that you know which consumers pay which is not some kind of exclusive or monopoly: Utilities, Cable, Cell phone, NetflixEtc, Uber*.
Today's consumer doesn't like to pay for anything, especially if it is a digital product. They will do whatever they can to get out of paying either by pirating or trying to get a refund/chargeback after using it.
Sometimes they will do an impulse buy. Which is what we were able to work for us, but then bad actors try to make your life as miserable as possible.
B2B is not rosy and has its own set of issues. But I would rather kick 50 ungrateful users from the platform to their face, rather than deal with 10k ungrateful consumers.
Which is basically just boring normal business leverage.
"My customers are more loyal to my portal to your platform than your platform. You're literally putting me out of business so you can buy my app and keep running to keep those users for a price.
Incidentally, and naively, I have to ask: Is there a business model that can promise customers a product that's immune to eventual usurpation? It's a hidden cost to build your world around a product only to see it turn into pay-to-play.
Been through this at medium sized companies struggling to sell. This kind of customer is alluring but poisonous. Company: We sell Product X! Toxic Customer: I don't want Product X, I want Product Y. If you're willing to bolt Product Y onto one of your menus I will pay you this stack of money for it! Company: $$$!
Bam! The company just went from being a product company to a custom engineering service. You will have to drag Product Y along with your product forever as a big lump of technical debt. After a few repeat iterations of the above, you will have a franken-product with random features hanging off of all ends, confusing to general users and impossible to maintain.
If you're a Product X company and one customer wants Product Y, stand your ground and tell them to go find Product Y somewhere else. If tons of customers want Product Y, maybe pivot and become a Product Y company and ditch Product X.
Your comment hits the nail on the head. It's anticompetitive behaviour, and in the end consumers don't have a choice because competitors have gone out of business. If it's a valuable product or service (e.g. lifetime memories), consumers are then held to ransom. It has been going on for years, and it will continue to get worse until we rearch some kind of tipping point where people start to really care.
If they said "buy once, get upgrades forever" and didn't provide that, then yeah, that's definitely a very plain example of immoral dealing. The future service is exactly what the purchasers were buying - not a nice-to-have add-on.
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