Yesterday, I had an interesting experience with a cloud service provider I’ve been using for the past five years. I received an automated email informing me that my subscription had been renewed — the usual annual cycle.
The fee came out to €11.60 per month. “That seems too much,” I thought. Then, curiously, I checked their website. That’s when I discovered that new customers were being offered the exact same service for €3.09 plus VAT — about €3.74 per month!
I called customer service, hoping there had been some mistake. There hadn’t. They acknowledged the discrepancy, apologized, and offered me a generous-sounding deal: 24 months free if I kept my subscription.
At first glance, that felt like a win. But the numbers told a different story. The offer amounted to €3.86 per month — still more than what a brand-new customer would pay.
I explained that I had been a loyal customer for half a decade and was now, paradoxically, being penalized for it. “Sorry, this is the best we can do,” they replied. So, I canceled my subscription, received a full refund, and signed up with their top competitor at a lower monthly rate.
On the surface, this story might look like a pricing dispute. But beneath it, the real issue is brand building.
For five years, I had upheld my end of the bargain — trusting the brand, paying on time, never switching. What I discovered was not just a better deal elsewhere, but a more painful truth: The company didn’t value its relationship with customers.
Are brands too obsessed with acquiring new customers?
We live in a post-How Brands Grow world. Over the last decade, the Ehrenberg-Bass Institute has reshaped how marketers think about growth. Their message is clear: brands grow by acquiring more customers, not by deepening loyalty. Loyalty, they argue, is largely a function of penetration. If you grow, loyalty follows. Not the other way around.
From a data standpoint, they might be right. I remember nodding my head when I first read the “double jeopardy law”. For those who don’t know, the Ehrenberg-Bass Institute argues that smaller brands don’t just have fewer customers — they also suffer from lower loyalty. The implication is powerful: loyalty is an outcome, not a lever. Trying to grow by “focusing on loyal customers” is, according to this view, putting the cart before the horse.
And yet, my recent experience reveals a danger in how that science gets operationalized.
A brand is a promise that gives you the right to complain
The cloud service I canceled was, in all likelihood, following a logic consistent with the Ehrenberg-Bass Institute. Offer an irresistible deal to new users, worry less about the old ones. As long as net growth is positive, it’s a win, right?
This is where most brands get it wrong. They view customer service as a cost center, not a strategic tool.
But here’s the thing: products are bought, but brands are built in moments of truth. When something goes wrong — when the power is imbalanced, when the customer is vulnerable, when the system fails — that’s when the brand steps into its most visible, consequential form. It either becomes real, or it reveals itself to be hollow, staying as a product.
So yes, the Ehrenberg-Bass Institute is right — you can’t grow by retention alone. But the mistake is thinking that this insight grants you permission to treat long-time customers as disposable. Acquisition may bring people in, but the way you handle loyalty teaches them how to feel about staying.
Because when a customer complains, they’re not just pointing out a problem — they’re expressing a desire to continue the relationship. That’s the moment when the brand either rewards that vulnerability, or punishes it.
In my case, they punished it. Not overtly — no one was rude or dismissive. But the deeper message was clear: “We’ve already got you. You’re not who we’re trying to impress.” And that’s when the brand, for me, stopped being a brand and reverted back into a product.
Growth vs. meaning is a false dichotomy
Here’s the paradox: acquisition fuels growth, but loyalty fuels meaning. And meaning is what makes growth sustainable. Because brands, unlike products, are not just bought — they are believed in. And belief is emotional, narrative, and built on the accumulation of small signals over time — especially when things go wrong.
The science of brand growth may not reward loyalty, but the psychology of brand experience cannot exist without it.
The great late James Hillman says, “Expectations that are only statistical are no longer human.” Focusing on new customer acquisition at the expense of loyalty could be a way to build a product, but it is certainly not a way to build a brand.