Customer Addiction
How Repeat Business Can Hurt You
Repeat business is traditionally viewed as a sign of success; if you have a good relationship with your customer, they’ll come back for more. But there’s an inherent risk in repeat business—you can become addicted to your customers.
The increased pace of innovation, reduced barriers to new business formation, competition from outside one’s industry, and the proliferation of category options all converge to create an environment in which serendipity becomes the most important determining factor in one’s success.
Serendipity—happy accidents—allow for the emergence of value from unexpected, unstructured, or unintended sources. It is the result, not of chaos, but of the careful coordination of randomness. Allow people to play and experiment and they’ll accidentally discover something valuable. Ship your product or service before it’s finished, and you might learn that a theretofore supporting feature is actually a product unto itself.
These valuable acts of randomness are dampened by repeat business. Repeat customers incentivize us to keep doing the same thing, in the same way—after all, isn’t that why they‘re still with us? And while we’re busy getting the same thing to the same customer, we’re blind to new high-growth opportunities emerging in the market. It is the smaller, more agile (and serendipitous) business that will, in their accelerated state of experimentation, detect these emerging opportunities first. By the time we become aware of them, the opportunities have already been exploited. What’s more, we risk jeopardizing brand loyalty if we abandon our customers for the new opportunity.
I envision an economy in which brands—not the product or service—are shipped and iterated on an agile basis, allowing an organization to explore and capitalize on emerging opportunities without damaging an existing customer relationship. These responsive brands move fluidly with the market, and demonstrate that the consumer comes first, that the brand exists purely to serve their needs.
This is the reason WhatsApp and Instagram haven’t been brought under the Facebook brand. To do so would throttle their ability to access and secure emerging values, namely the simplicity of an app doing just one thing. In fact, their greatest value proposition is that they aren’t trying to do what Facebook is trying to do (everything). They do the things consumers need them to right now, in a single, simple way, and they can do this because they’re small.
What would your company look like if products were liberated from the larger brand? How could they become more focused?
