Sticky Business: How Companies Keep Their Customers

How do some companies manage to retain their customers, regardless of how bad they are? The answer is something called ‘stickiness.’

In September 2016, Wells Fargo (NYSE: WFC) paid $185 million to Los Angeles city and federal regulators after admitting to the creation of fake customers accounts. The company hoped that this would put the issue behind them. After all, big banks pay big fines for messing up all the time.

However, that wasn’t the case.

What followed was the uncovering of one of the biggest corporate scandals in living memory. Management had claimed at the time that it was a few bad employees who had tried to cheat the system to get results. But as we learned, the company’s ‘Eight is Great’ mantra — which meant that every customer should be sold at least 8 Wells Fargo products — had rotted away the very culture of the company.

Under intense pressure from management to perform, Wells Fargo employees had set up millions of accounts for customers without their knowledge or consent. Those employees who refused to do so or spoke up against the system were quickly fired.

Not only had these bogus accounts racked up millions of dollars in fines, but they had also…