In order to retain customers, companies must create “cumulative advantages”.

Many new strategic ideas hold that in modern commerce, no competitive advantage can last. As a result, companies must constantly update their business models, strategies, and communications to respond to increasingly sophisticated consumers. However, many studies have shown that this should not be done.
Take a look at the classic article "What is Strategy" published by Michael Porter in the Harvard Business Review in 1996. The companies listed in the article, including Southwest Airlines, Vanguard, and IKEA, are examples of long-term competitive advantage. Over the past 20 years, these companies have remained at the forefront of their respective industries, and the strategies and branding strategies they follow have remained largely unchanged. Even if Google, Facebook or Amazon suffer setbacks and even get rid of by new companies, these giants seem to be able to maintain their competitive position for quite some time. According to modern behavioral research, we believe that the key to maintaining performance is not to provide consumers with the perfect choice, but to provide simple choices.
The focus of retaining customers is not to adapt to changing needs and to maintain maximum matching in terms of rationality or sensibility; rather, to prevent customers from being forced to make another choice. To achieve this, companies must create “cumulative advantages”.

People are habitual animals
According to the traditional view of competitive advantage, successful companies usually choose to position, focus on consumers, and plan activities to better serve consumers. The goal is to allow consumers to repeatedly purchase products by matching value propositions and needs. This view implies a hypothetical condition: consumers make cautious and even rational decisions. However, the idea that “purchase decisions come from conscious choices” is untenable in many behavioral psychology studies.
The brain is not so much an analytical machine as a machine that fills a gap: it collects noisy, incomplete information from the world, and then fills in the gaps based on past experience. Intuition, that is, thoughts, opinions, and preferences that appear quickly and without scrutiny, but are sufficient to produce influence, are the product of the above process. However, the intuitive judgment does not depend on what gaps are filled, but is deeply affected by the speed and difficulty of filling the blank process itself. This process is called "processing fluency" by psychologists. When we describe the process of making decisions with “feeling right”, it means that the decision is smooth.
Smooth processing itself is the product of repeated experience. As the number of experiences increases, smooth processing also sharply increases. If you have been exposed to an object before, the ability to observe and identify the object will be enhanced. In other words, the threshold for perceptual identification of repeated stimuli is lower, requires less attention, and can be named or comprehended more quickly and accurately. What's important is that consumers prefer existing stimuli rather than new ones.
In short, research on the workings of the human brain shows that thinking has an extraordinary and powerful inertia – more than conscious deliberation. In the face of choice, the human mind is willing to repeat the same thing. For example, if the human brain forms the inertia of "the Tide will make clothes cleaner," and the choice of Tide on the store shelves or on the web, the easiest option is to purchase the Tide again.
Therefore, the strong reason for consumers to choose a market-leading product may simply be: no matter what channel they use to shop, it is always the most eye-catching product. Repeated purchases are the easiest action. Not only that, every time you consider buying another product from the brand, you will try to make it easy – your brain encourages you to do so.
Therefore, buying the largest and easiest to choose brand creates a cycle that allows the lead share to grow over time. The advantages of each product or service selected and used are cumulative relative to products and services that are not selected.

Turn value proposition into habit
In fact, the choice of “where to compete” and “how to win” is still important to the strategy. Compared with other companies with the same target consumers, if there is no better value orientation, the company has no place to stay. However, if a company wants to extend its initial competitive advantage, it must turn its value proposition into a habit rather than a choice.
Therefore, we can formally define “cumulative advantage” as the choice of products or services to make consumers feel more comfortable intuitively based on the initial competitive advantage.
From the first day of its establishment, Facebook is building a cumulative advantage. Initially, Facebook has some interesting features that Myspace lacks, and the value proposition is not bad. But the reason why its success is more important is that Facebook's look and feel is very uniform. When Facebook decided to move from the web version to the mobile side, it also ensured a high degree of user experience. Of course, in order to better realize its functions, Facebook has also made design adjustments from time to time, which has attracted severe criticism. But overall, the new service has not jeopardized the comfort and familiarity that Facebook created before, and these changes are usually not mandatory at the beginning.

The four elements of "cumulative advantage"
How should companies build cumulative advantages and enhance and extend their competitiveness? Here are 4 basic principles:
1, "Before the name is early"
There isn't much new idea for this suggestion – many of the early good strategic writings have mentioned this, and Bruce Henderson, founder of the Boston Consulting Group, has also elaborated. Henderson pays particular attention to the positive impact of cumulative advantage on cost – the well-known experience curve shows that as the company's experience in producing a product increases, its cost management becomes more efficient. He believes that the company should be aggressively pricing in the early days - in his words: "over the experience curve", in this way, can win more market share, reduce company costs, increase relative market share, and increase profitability. This fully demonstrates that early market share is important.
Marketers have always known the importance of winning early. For the fast-growing automatic washing machine market, Tide is one of P&G's most respected, successful and profitable brands. In 1946, the most intensive advertising in the category was launched immediately after the market was launched. In addition, P&G also supplies a box of free Tide detergents to all washing machines sold in the United States to foster consumer habits. As a result, the Tide quickly won from the opponent and quickly became popular, and then it was riding.
Similarly, Samsung has achieved a leading market share in the global smartphone market because it offers Android phones that are reasonably priced and free of charge. For Internet companies, free is the core strategy for cultivating user habits. In fact, all successful large Internet companies, such as eBay, Google, Twitter, Instagram, Uber, and Airbnb, have cultivated and deepened user habits by providing free services; on this basis, suppliers or advertisers I am naturally willing to pay the bill.

2, designed for the habit
We can see that the best result is: to make the choice of products become an automatic response of consumers. You have to use this as a design goal to keep the ideal results under control rather than luck. Art Markman, a psychologist at the University of Texas, points out that there are some rules to follow in developing user habits through design:
First, the product design elements must be consistent, and it's best to see them at a glance in the distance, so that consumers can quickly find products.
Second, you should find the best path to integrate the product into your living environment and encourage people to use it.
Frequent design changes often fail to reinforce habits, but instead create interference. So, you have to look for changes that really strengthen your habits and encourage purchases. Amazon's “one-click purchase” is a good example – creating a convenient way to place orders for frequently purchased products, fostering consumer habits and locking them into specific distribution channels.

3. Brand internal innovation
Many companies encourage “re-launching,” “repackaging,” or “re-planning platforms,” but there are risks: these initiatives can change consumer habits. Ideally, whether it's improving the technology or adding new features, you should keep the new product or service a shared advantage.
After more than 70 years of wind and rain, P&G has had many lessons about blood and tears in the process of increasing the cumulative advantage of Tide. In 1975, after the launch of Tide Washing Powder, the industry ushered in a detergent innovation – laundry detergent. Procter & Gamble's first reaction was to launch a new brand called "Era." Since there is no basis for accumulating advantages, Era has not grown stronger despite the fact that more and more consumers choose laundry detergent instead of washing powder. In 1984, P&G launched the Tide Laundry Liquid, adopting a familiar packaging and coherent brand strategy. Although it entered the market late, it still became the mainstream laundry detergent brand.
For consumers, “improvement” sounds more comfortable and more secure than “new”.

4, keep a simple spread
Daniel Kahneman, the father of behavioral science, calls subconscious and habit-making decisions "quick thinking," and conscious decision making "slow thinking." Marketing and advertising people are often in a "slow thinking" mode. They use their ingenuity to carefully polish and emphasize the advantages of new products or services. However, if the consumer does not pay attention (as is the case in most cases), the well-conceived spread may be counterproductive.
Remember: Usually, the human brain is lazy and does not want to spend energy to understand highly complex information.
In today's world of communication and innovation, many strategists believe that maintaining a sustainable competitive advantage must make the company's value proposition always the primary choice for consumers' rationality or sensibility. However, they have forgotten or never understood, and the subconscious plays an important role in decision-making. For fast thinkers, products or services that are easy to buy and that have formed a comfortable buying habit will go beyond unfamiliar alternatives that are difficult to buy or that must form new habits.
AG LAFLEY ROGER MARTIN | Brunei is the newly appointed P&G CEO and currently serves as a director of Snap Inc. Roger Martin is the former Dean of the Rotman School of Management at the University of Toronto. This article was inspired by the work of Craig Wynett, P&G's behavioral sciences officer.
Liu Yuzheng | Translation Liu Weiwei | School Button Key | Edit this article has been abridged, the original text see "Harvard Business Review" Chinese version January 2017 "Customer Loyalty Is Overrated" (Customer Loyalty Is Overrated).

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