Customer retention and loyalty is in the vocabulary of every company, and one of the main objectives of most. But it seems that entire industries insist on locking customers into lengthy contracts which effectively amounts to nothing more than customer detention .
While there are different strategies for customer retention, generally it involves ensuring customer satisfaction by providing quality products and services.
Mandatory service contracts go fundamentally against this principle. The very proposition of these is that customers have to stay with the company regardless of satisfaction.
Mandatory service contracts may actually be the cause of poor customer experience. First, consumers want the freedom to decide. They want to be able to try before committing and want the ability to opt-out. Secondly, mandatory service contracts may actually result in the company being less willing to provide good service and address customers’ issues promptly. After all, if they know customers can`t leave, they have that much less incentive to do so.Read more about why mandatory service contracts are bad for business here