Are You A Bank Or A Gas Station?

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“What’s Nathan been up to lately?,” asked my wife, Linda.

Nathan is the son of my friend Matt, and since Matt and I had just had a couple of beers the other night (as we do nearly every Tuesday night), it seemed like a reasonable question.

Unfortunately, I really had no idea.

Catch-up conversations regarding our respective kids, wives, jobs, pets, etc., are rarely on the table at these weekly events.

Instead, and for reasons unclear, we tend to focus on the minutiae of the moment:

“Do you think these two beer glasses are the same size? This one looks way smaller.”

“Who do you suppose is the oldest player in the NBA these days?”

“Do you shovel your own driveway or does somebody do it for you?”

And so when Matt asked why my wallet (which was sitting on the bar) looked so thick, it was entirely consistent with the type of mindless banter that keeps us occupied for an enjoyable couple of hours each week.


The answer? Because I am in the process of switching banks – both my personal and business accounts.

Which means that for the time being, and until I complete the switch, I’ve got twice as many ATM and credit cards on hand as usual.

Switching banks is a huge hassle.

In my case, I’ve got lines of credit, home equity loans, links to college tuition payments, links to credit card payments and deposits, and dozens upon dozens of automated, monthly charges that flow through the various accounts.

I figure I’ll be fat-walleting things for at least three more months before I can be certain there is no longer any activity hitting the old accounts.

If you are a bank, of course, the “switching is a hassle” factor baked into your business model is extraordinarily good news. It means that until and if you become bad enough relative to the competition, people are going to stick with you.

On the other end of the hassle continuum is my local gas station.

I pass four of these on the five-mile drive to my office, and while I do tend to go to the same one, if the day arrives where there’s even the slightest inconvenience relative to other options – lines are too long, machines too slow, no wiper fluid in the bucket – I’ll switch easily and without a second thought.

Are you a bank or are you a gas station?

It’s an interesting question, isn’t it?

And while I’m not suggesting you stop treating your clients as if they could leave at any moment and with zero hassle, it’s worth considering how the services you offer and the way you offer them gives people pause (or not) when they think about moving on.

For example …

Are there obvious substitutes for you? Gas stations are all the same. Same product, same price, same experience. Unfortunately, at some level, so are all financial planners, attorneys, coaches, writers and countless other professionals.

Doing an adequate job at the thing you’ve been hired to do may satisfy the technical requirements of the agreement. But all your competition offers the same.

So can you offer things – conveniences, unique insights, accessibility, feelings – in addition to whatever your clients are explicitly buying?

My doctor’s office, for example, has everything in one building. Lab, X-ray, ophthalmologist, cardiologist, sports specialist, and an easy to use patient portal. In many ways, and since medically, all doctors appear the same to me, that’s what’s keeping me from shopping around.

(Hint: The less quantifiable are the extra things you offer [e.g., “I feel well taken care of when I talk to her”], the riskier it feels to me to leave you in search of a replacement. [Insert your own, “That’s why I’m still married to him” joke here.])

Are your contracts open ended? As we used to say when I worked for the cable company, “Inertia is our best marketing tool.”

Subscription businesses like your cable company, your health club, your lawn care service, and others that bill you over and over until you say “stop,” understand the power of momentum as a business model.

If you’ve always worked project by project, can you offer an open-ended variation (one that continues until your client says “stop”)? I’ve got two newsletter clients, for example, that I’ve had for more than 15 years and several others for more than five, none of which have an explicit end date.

Do you raise your fees every year? At first glance, this may seem sensible. After all, nearly everything goes up in price, why shouldn’t you?

I don’t. I never raise fees for a given service for an existing client. Ever. Those 15-year-old newsletter clients? They’re paying 2003 rates – and they always will.

“Grandfathering” existing clients is good for them (they save money) and good for you (they are reluctant to leave). Sure, you give up a little bit of money as a result. But you give up 100% of the money if they move on.

Plus, the people who stick around for years and years are the easiest and nicest to work with.

Here’s the bottom line. It’s always harder to get clients than it is to lose them. For many solos, though, once we have one of these precious items, we stop paying close attention and just “do the work.”

If you believe, as I do, that the best clients are the ones who stay forever, see what you can do to make leaving you a difficult decision.

P.S. Speaking of which, don’t forget Valentine’s Day next week.

Discussion Questions:

  1. Do you think these two beer glasses are the same size?
  1. Who do you suppose is the oldest player in the NBA these days?
  1. Do you shovel your own driveway or does somebody do it for you?

Share your comments below!

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7 thoughts on “Are You A Bank Or A Gas Station?

    1. Michael Katz Post author

      It actually came down to this: sold a house and bought a new one, so we needed a new home equity line. Big bank I was with wanted me to jump through all kinds of hoops and then they send it out of state for approval (“we’ll get back to you.”). Small bank across the street from my office made it easy – and the approval was done by the person I first met with. I started switching everything else the next day!

  1. Charles Alexander

    1. Same size. Don’t believe me? Ask the Seahawks –

    2. Dirk Nowitzki. He’s now 62 and only has a couple of years left.

    3. I live in Tennessee. This means when there is snow in the driveway we lock the doors, live on a diet consisting of only bread and milk (which is why the stores have been wiped out) and watch the local news to find out when the threat is over.

    Great article by the way! Very relevant for me right now. I’m trying to get an animated video subscription service going, where clients get their personalized characters, logo, and contact information into an existing video and just pay an affordable monthly amount.

    Thanks Michael!

  2. Bruce Horwitz

    1) totally depends on how many beers you have consumed.
    2) no idea
    3) my neighbors on either side take pity on the old guy living between them and usually take care of it for me! Admittedly they both have snow blowers and the actual square footage of all our walks and driveways is small.

    4) Okay, you didn’t ask but I always position myself as my client’s Director of Intellectual Property (part-time/outsourced) and am paid a monthly retainer (AKA the “salary” for an outsourced person), so yes, my contracts are open-ended.

    5) Didn’t ask this one either – My retainer only changes when there is a change of circumstance – for example, a push to increase R&D and the number of patents the company wants to file.


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