The trapped customer

Last week I shared the Loyalty Matrix – a framework that segments customers into four categories based on their attitude and behavior.

When we discuss this framework, people are typically very intrigued with the “trapped” category. It seems to be an element often missed in customer satisfaction ratings, Net Promoter Scores, and other measurements. The trapped customer is indeed unique.

Trapped customersIn some ways trapped customers are appealing because they are giving every indication they are going to continue doing business with you. And that’s good!

However, this can be a short-term approach to building customer relationships and companies should be careful with it. We’ve found time and time again there are important differences between a loyal customer and a trapped customer.

Remember, trapped customers show positive behavior (plan to keep doing business with you) and negative attitude (not real happy about it). So it is no surprise that trapped customers tend not to refer you – a valuable element when you are attempting secure new business. What’s more, trapped customers tend not to increase their spending with you and may not be very open when you propose new products and solutions. Finally, when a new competitive offering comes along, trapped customers are much more likely to check it out.

In contrast, loyal customers will refer you, increase their spending at a much greater rate, and will resist other offers when they come their way.

While retaining customers is certainly important, it can be short term. Building loyal relationships is a long-term approach to more rapid growth and higher profitability.


Patrick Gibbons
Principal/SVP
Walker


Comments for: The trapped customer

Name: Al Watts
Time: Thursday, March 1, 2012

This is a great insight and graphic; thanks. I can't help applying the same model to employees; I'm afraid that after the last few years there are likely more"trapped" workers than organizations think - exhibiting the right behavior because that's survival, but ready to bolt when they have the opportunity. Contact me at www.integro-inc.com if you want a copy of my next newsletter about when it's time to part company with an employer.
Name: Curtis N. Bingham
Time: Thursday, March 1, 2012

Great post, Patrick. What advice would you give for a.) identifying these trapped customers, and b.) proactively rescuing these customers from pending defection?
Name: Pat Gibbons
Time: Thursday, March 1, 2012

Al - indeed, the Loyalty Matrix applies equally well to employee loyalty. In the work we conduct with companies we find it is common that a high percentage of employees are trapped - meaning they plan to stay at the company, but not for the right reasons. They typically do not see many other options and, not surprisingly, they don't tend to go above and beyond the call of duty and probably don't speak highly of the company. The good news - they're not going anywhere so they don't need to be replaced. The bad news - they're not going anywhere, so they are probably a poor influence in the organization.
Name: Pat Gibbons
Time: Thursday, March 1, 2012

Hi Curtis,

Thanks for your comment. We use a specific battery of survey questions that allows us to segment customers into the four quandrants of the loyalty matrix. In instances where account managers are trying to consider if a customer is trapped, they can often look at their spending and their openness to new offerings. Typically trapped customers are stagnant and don't show much interest in your new stuff. Regarding "rescuing" these customers, remember that trapped customers actually are not leaving. They are staying, somewhat grudgingly. The key with trapped customers is to consider what can be done to create a more healthy attitude so that they can be converted to a loyal customer, which not only will stick around, but will recommend you and will potentially spend more with you.
Name: Him Shobha Luthra
Time: Friday, March 2, 2012

Thanks Patrick. We have been keenly reviewing the trapped customers wave on wave. How best do we profile them so we can strategize to move them to the 'truly loyal' category?
Name: Pat Gibbons
Time: Friday, March 2, 2012

In profiling customers I think you need to dig deeper into their feedback and ask yourself a few questions. First, what qualities drive loyalty of your customers the most? Is it the service they receive? New innovations? Delivery? In other words, what aspects of the customer relationship will influence loyalty the most. Second, how are you performing in those areas in the eyes of those trapped customers? And third, what can you do about it? It is doing a better job communicating those characteristics or do initiatives need to be put in place to really make strategic advancements?

Every situation is obviously unique. However, that's where I would tend to start when addressing trapped customers.

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