Sunday, July 9, 2017

How to Reinforce the Status Quo

In an earlier post, I explained why companies need different marketing content for customer acquisition vs. customer retention. Put simply, when the objective is customer acquisition, your content needs to weaken the grip of the status quo and convince your prospects to make a change. When the goal is customer retention, the exact opposite is true. You need to emphasize the attractiveness of the status quo so that your customers won't want to make a change.

The status quo occupies this central role because of the status quo bias, which can be defined as a cognitive bias that causes humans to prefer the status quo for non-rational reasons. In order to develop marketing content and messaging that will reinforce the status quo, we first need to understand what causes us to have a bias for the status quo.

What Causes the Status Quo Bias?

Psychologists demonstrated the existence of the status quo bias in numerous experiments beginning in the 1980's. Since then, several psychologists and behavioral economists have attempted to identify the specific underlying cause or causes of the bias. So far, the evidence suggests that the status quo bias is largely a result of other biases in human decision making. For example:
  • Daniel Kahneman argues that the status quo bias is related to loss aversion. He contends that most people make the status quo their mental reference point and tend to view change from the status quo as a loss. Because we perceive and weigh losses greater than potential gains, we become loss averse, which makes us inclined to stay with the status quo.
  • Richard Thaler has argued that the status quo bias results from a psychological phenomenon called the endowment effect, which refers to the fact that most people like and value something more simply because they already own it. The endowment effect causes us to overvalue the benefits of the status quo and to under-appreciate its disadvantages.
  • Some psychologists have attributed the status quo bias to a human desire to avoid or delay difficult or complicated choices, and there is evidence showing that people are more likely to stick with the status quo when the alternatives are difficult to evaluate or compare.
How to Reinforce the Status Quo

Your marketing content and messaging can reinforce the status quo in several ways:
  • By documenting the benefits that the customer has already realized by acquiring and using your product or service, and communicating those benefits to the customer
  • By identifying the future benefits that the customer can realize by continuing to use your solution
  • By making the costs of switching to a different product or service visible and tangible to the customer
  • By identifying the risks the customer will face if it switches to a different product or service
  • By highlighting the difficulty and complexity of evaluating and selecting an alternative product or service
How to Make the Job Easier
The techniques described above can reinforce an attractive status quo, but they won't transform a bad status quo into a good one. Therefore, the key starting point for a successful customer retention effort is to provide customers - particularly new customers - information, insights, and assistance that will help them maximize the value they obtain from your solution and from their relationship with your company.
This approach - which is often called customer success management - has been widely adopted by software companies that offer their solutions on a subscription basis, and it is becoming more popular in other types of B2B companies, as business and marketing leaders increasingly recognize the value of long-term customer relationships. The bottom line is, it's much easier to reinforce the status quo when you have happy customers who are deriving great value from your solution.

Image courtesy of Nichole Burrows via Flickr CC.

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