I went to a Business Link Yorkshire seminar on sales today, to learn how to make sales and keep existing clients. It was a very good event. Business Link are a great bunch of people.
However, one of the last slides provoked a strong reaction in me. These were the two final tactics under a list of tips for keeping customers:
Do you have a technology which you can embed in your customers’ systems?
Can you lock your customer into a long term contract with penalties for termination?
I thought that these were both very dangerous tactics which raise issues of business ethics.
Embedding proprietary software in clients’ systems could be akin to spyware or malware. Is there a practical need for it? Does the client fully appreciate what her software is doing, and how her future choices may be limited by the closed nature of a software system?
And on the second point, is there a justification for locking people into long contracts, and for applying penalties if they wish to end the relationship? In the case of phone companies offering “free” hardware with long-term contracts, I think this is fair enough—the company is clearly only able to “give” you a phone because you agree to pay for it over a period of time through your monthly contract payments. Likewise, I can imagine large-scale website development projects where the cost of development is actually part of a long-term relationship between developer and client.
But citing these strategies as techniques for keeping customers really does seem deeply unethical to me. They may be practical solutions which help manage software systems or help finance a long-term project. But as sales techniques I submit that they could to lead to the vendor deliberately manipulating their product or their client to force ongoing sales.
In any case, I think such strategies are counter-productive. Of all the relationships I’ve had with suppliers, those where the supplier had tried to lock me in or limit my choices have resulted in a souring of the relationship—often to a point where I would not willingly do business with them again. Companies which allow me to leave easily and freely are much more likely to get me back if I decide they provide a product or service I need in the future.
At the beginning of the seminar, the leader told us that sales very much isn’t about forcing people to buy things they don’t want, but rather about helping them get the things they need. With these two strategies for lock-in, I think he contradicted himself.
