Seven subtle signs that your customers will migrate to your competitors

Image courtesy of Lukas Blazek on Unsplash

There are numerous clear and obvious signs that customer migration may occur. A high volume of complaints, new technologies that cannot be exploited or the drip feed of data showing declining market share, are all flashing red lights of concern. Important though they are, these signals are not the focal point of this blog.

Rather, the focus is on the less conspicuous signs, including the numerous subtle indicators that are hidden in plain sight. Of these, the underpinning psychology and sentiment that drives customer choice is of particular interest. As this blog will show, the very success and ubiquity of a product could be the first sign that decline or even demise are on the horizon. This blog also shows that the sheer dynamism of the market dictates that customer migration is an inevitable characteristic of customer behaviour.

Let’s discover more. Set out below are seven subtle signs that your customers will migrate to your competitors.

1. Reaching the saturation point

The fact that customer wants are insatiable means that there are times when products and services seem to reach a saturation point. Look at the social networking service MySpace as an example of this. Though hard to imagine, in 2006, MySpace was the most visited website in the United States. Following the emergence of Facebook, MySpace users steadily declined and are currently a mere fraction of what they were at their peak. It is always difficult to attribute decline to a single cause. However, what is undeniable is that no matter how good MySpace may have been, it was unable to sustain its position as a market leader, when a viable competitor emerged.

2. Mismatch between the physical and psychological

Keep in mind that products and services trigger a psychological as well as physical response. They do not just make our lives more convenient in a practical sense; they also make us feel good about our association with them. It is when these two dynamics (physical satisfaction and psychological stimulus) are misaligned, that problems arise. The demise of the Volkswagen Beetle, which is covered in a separate blog, is an example of this. Here, you have a product that clearly met the physical requirements of its customer base, but whose appeal and eventual demise, was determined to a large extent by the psychology of gender perception.

3. Ideological maturity

Increasingly, products and services are designed to carry messages on important social issues. For customers, as their ideological views mature and become more discerning, they can identify those suppliers that better reflect them. Once that happens, the customer will move on. From the customer perspective, they are simply looking for the supplier able to give the clearest expression to their preferences. Mindful of the impact of climate change, think of consumers who have migrated from environmentally friendly fuelled vehicles, to those powered by electricity. That is how ideological maturity works.

4. Market fertility

In a market where demand is high and choice is abundant, customer behaviour is dynamic. The phenomena of market fertility can best be seen in the motion picture industry. Here, the loyalty of movie-goers to their favourite franchise is non-transferable to the motion picture studios that produce them. Therefore, a huge opening weekend for a Warner Bros movie, one week could (driven by the same movie-goers) become an equally massive opening weekend for a MGM, Paramount or DreamWorks movie the next. Dynamic customer preference blurs the line between brands and removes constraint on customer behaviour.

5. It’s all about the profit baby!

Look no further than the stock market for examples of this principle in action. Whilst there are clearly ideologically driven reasons why people invest in certain products and not others, at a fundamental level the goal of investment is to generate profit not to sustain loss. Therefore, if a stock is consistently under-performing and losing value, irrespective of ideology, expect an investor to sell that stock or re-invest in stock that is performing. Likewise, for those with no ideological perspective, you can expect a similar response as investment is primarily predicated on the need to make a profit, not to the desire to make a point.

6. Transitory trends

The sentiments that drive transitory trends are attributable to current events, conditions or ideological flirtations. The growing popularity of dietary and wellbeing movements or trends such as veganism are a case in point. However, transitory trends may also be triggered by the practicalities of affordability arising from economic conditions, such as inflation. Here, customer choice eg switching away from pricier brands to cheaper and more affordable options, is driven by prevailing conditions. To that extent, the way in which customer choice is expressed will last as long as conditions prevail.

7. Demographic decision-making

One of the more interesting aspects of customer sentiment is the impact of demographic decision making in elections. A poll conducted by the Institute of Politics at Harvard Kennedy School showed that 40% of Gen Z voters (those aged 18 to 29 years) committed to vote in the 2022 US mid-term elections. This is important because Gen Z will in due course, become a dominant voting bloc in future elections. The fact that this demographic is particularly energised by issues relating to the environment suggests that they may likely have a significant impact on the shaping of government policy and the growth of the green economy.

If there is a lesson from this blog it is the fact that: with customer engagement, the factors that work for you, can just as easily work against you. The key to customer engagement is therefore the ability to master the art and science of predictable unpredictability. The customer is not a homogenous entity. The sentiments and psychology that shape customer behaviour are often fast moving, giving suppliers little time to re-position and respond to market-driven headwinds and tailwinds. In such an environment, agility of mind is of far greater value than certitude.