“Our Customer Did Not Leave” Is Not A Customer Strategy


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“Our customers rarely leave us,” I was recently told by an executive. “I understand all about customer strategy, but it is not relevant for my company. The moment we get them, they stay,” he added with great conviction. For a brief moment this executive’s argument sounded like customer heaven for his company had identified a method for retaining customers with minimal investment.

Reality was quite different. This executive along with others in a variety of industries posit that minimal investment, if any, is required to keep their customers from defecting. This belief is augmented by the concept of “captive customers” which is the notion that customers are held captive by the companies with whom they business as evidenced by extremely low churn rates. These companies mistakenly equate retention with satisfaction. “Prisoners cannot leave the prison so why bother making their stay more pleasant,” the thinking goes.

There are several reasons why customers can become captive. One reason is the result of customers’ delight from an amazing customer experience – a total value proposition that is so attractive that they will have no reason to shop for competing products and services.

The second reason bears no semblance to the first. Customers are often held captive as a result of monopolistic industries and unfriendly business regulations. The utility industry is a classic example of a monopolistic industry where the absence of competition leaves customers at their providers’ mercy and prevents them from defecting to a competitor.

Other reasons behind customer captivity include the following:

  • Lack of quality competition – The quality of competitors is often so poor that despite the desire to defect, a lack of suitable alternatives inhibits customers’ ability to do so.
  • Inertia – After years of poor customer service, customers have simply gotten used to the idea that nothing will change, leaving them with no will to fight their company. In some cases, customers perceive the product or service as a commodity and lack the desire to take the time and effort to search for better alternatives.
  • High barriers to defection – Until the passage of legislation allowing consumers to leave their mobile carriers with their mobile numbers, defecting from mobile carriers was extremely challenging. Customers preferred to remain in a state of permanent dissatisfaction with their carriers so long as they kept their mobile numbers rather than defect and update their family, friends and colleagues on their number.
  • Lack of knowledge – historically a significant reason, the proliferation of the internet and the speed of information flow is leading increasingly educated consumers to seek other alternatives in growing numbers.

The belief that customers are captive frequently leads companies to mistreat the very people who keep them in business. These companies operate under the mistaken belief that mistreating customers is free. Mistreating captive customers comes with a price – a hefty price.

Captive customers view the products and services that are provided by their vendors as commodities. They do not associate significant value with these products and services and expect prices to reflect this perception. If your company faces a similar situation, welcome to “commodity hell.” In “commodity hell” there is no mercy from price reduction. Regardless of the latest discount or free month of service, you will never satisfy your customers. Your margins will decline drastically forcing you to cut costs. Your customers will be dissatisfied and dissatisfied customers are costly – very costly.

Captive customers are reluctant customers. They tend to complain excessively and frequently abuse their vendors’ employees. Each complaint comes with a price. As the length of the call from an irate customer increases, so does the cost. Transferring the customer to a manager or supervisor increases that cost. Calling to complain about the inability of the company to resolve the problem on the first, second or third call, increases the cost. Customers on hold while other customers complain further increases that cost. Captive customers utilize a disproportionate amount of resources and companies cannot generally operate effectively and profitably under these conditions.

Additionally, captive customers tend to limit their purchase and usage of their vendors’ products and services. They do not associate value with them. Cross selling and up selling opportunities will vanish. Growth prospects will dissipate. The destiny of new products, services and features will often be doomed to failure even before they get off the ground.

If you consider some or all of your customers captive – change. Inertia is not a strategy for long term success. Most importantly, captive customers are costly both for the low price they pay for your products and for the products that they choose not to purchase.

The only way to treat captive customers is to free them from their captivity. Design and deliver appealing experiences that will surprise and delight them. Never take your customers for granted. Monopolies will crumble. Legislation will pass. Do not wait for your captive customers to find better value elsewhere. Taking your partner for granted in your personal life is a bad idea. I posit that it is a costly endeavor and a bad idea in commercial life.

Lior Arussy
One of the world’s authorities on customer experience, customer centricity, and transformation, Lior Arussy delivers results. His strategic framework converts organizations from product- to customer-centricity. It is drawn from his work with some of the world’s leading brands: Mercedes-Benz, Royal Caribbean, Delta Air Lines, MasterCard, Novo Nordisk, Walmart and more.Arussy is also the author of seven books, including Next Is Now (May 2018)


  1. “Inertia is not a strategy for long term success.” This is a great line… I think you captured an important message here, but I imaging it’s not easy for those who keep customers captive to change.

  2. Thanks for your comments. we often see that companies realize too late their need for innovation and exceptional experience. This is already a matter of culture and openess to partner with customers. every compnay does it at its own pace and reap the proportionate reward.
    Lior Arussy

  3. Hello Lior,

    Great piece, I loved your blog. I actually came across it while doing a Google search for “customer captivity” as I was in the middle of writing my own blog on the topic and wanted to double-check whether anyone else has already published anything in this area. Your blog was so good, I decided to switch gears a little and a slightly different angle — by comparing bad customer service to abusive or unproductive relationships between people. Not sure I really succeeded, but a little self-indulgence never hurt anyone. The one thing I would add to your great blog is one additional cost of captive customers — not only do you lose repeat business and up-sell / cross-sell opportunities, you also lose word of mouth referrals!

    Anyway, I hope you don’t mind but I referenced your blog and linked to it from my article, “Retain Your Customers with Great Customer Service, not Threats of Waterboarding or High Termination Fees”:


    Best regards,

  4. John, Thanks for the kind words. I read your piece and liked it. I shared it with my followers on Twitter.
    All the best
    Lior Arussy


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