August 1, 2012
By Marshall Lager, founder and managing principal, Third Idea Consulting; contributor, CRM magazine

The Anatomy of a Customer Breakup

Over the years, I've had a lot to say in this column and elsewhere about customer loyalty—what it takes to earn it, how to hold onto it, and the value it has for a business. I may even have mentioned loyalty from the other side, where organizations remember what their constituents have done for them over the years, and make decisions based on that as well as the bottom line.

What I haven't done, as far as I can recall, is bring up what happens when corporate interests and individual consumers part ways. Relationships end. We've all experienced this, though we tend to think of it in personal terms—friends, romantic interests, or family going away or dying.

Relationships are important in the business world too. A good brand can become part of a person's identity. I define myself (in part) as a Coke drinker. I drink other colas and soft drinks, too, but Coke is what I reach for when my beverage has to be dark, bubbly, and not fermented.

Sports fans experience something similar; my fellow Long Islanders know exactly what it means to be a Mets or Islanders fan (long stretches of bitter disappointment alleviated by rare good seasons). But what happens when you go through what Dodgers and Giants fans did in 1957?

Today's brand breakups are rarely as traumatic as the one Brooklynites like my dad went through, but it's more important than ever for a business to remain on friendly terms with customers who move on. Back in the day, an enraged customer could only do the equivalent of spreading nasty rumors about you around town. Today, your customer can do the equivalent of posting your nude vacation photos on the Internet.

Think about a product or service you used to use, but no longer do. How do you feel about it? Consider how important the thing was to you, and the reasons you broke up with it. I'll bet that the closer that product was to your heart, the more bitter you are about it today, even if the reason for the split was fairly trivial. Ask me how I feel about the band U2 before it released the album Achtung Baby, and then after—you'll get two very different opinions, though the members are the same. Ask me about a certain big-name electronics and appliance retailer, and I'll respond with a venom most people reserve for ex-girlfriends.

There are three things a business can do when a customer is in a breakup mood. The easiest, nothing, was the approach made infamous by wireless carriers in the late 1990s. This didn't work for them, and it doesn't work particularly well for anybody else either. It builds bitterness and cynicism on both sides. You can get away with it for a while, but eventually a rival will emerge that doesn't treat customers like tissues, destroy you, and change the industry.

The second option is to beg and make deals to prevent customers from leaving in the first place, or to change their minds quickly once they have. This works about as well in business as it does in love. You look pathetic, and you are only delaying the inevitable and causing yourself short-term damage while you do. Trust me.

The third path is that of friendly detachment. Acknowledge your customers' grievances, and if you're unable to set them right, thank them for their business and let them go. After a month or three, get back in touch with a special offer or some other communication to get their attention. Don't rush them, bamboozle them, or strong-arm them—just remind them of the good times, and of what you can do for them now. It won't work every time, but you can expect a higher return than with the other techniques, since customers who return to you this way will likely stay longer.

If you love your customers, set them free. But if they return, make sure you're getting them back for the right reasons.

Marshall Lager is not an expert on personal or business relationships, but then again who is? Contact him at marshall@3rd-idea.com or www.twitter.com/Lager to talk about broken hearts.