The supply and demand curve isn’t a curve. It’s an abstraction of lots of individual behaviors.
And so, lots of organizations end up hitting a wall with no warning.
My car insurance bill has been steadily rising, year after year, despite the fact that I have a clean record. The logic, I’m sure, was, "well, let’s raise it a little and see who quits…"
If revenue increases enough to make up for the few who quit, you come out ahead. So, quarter after quarter, year after year, repeat the same process. Raise it a little, check to see if revenue rises in aggregate, and repeat.
I’d get the bill, sigh about the fee, consider the hassle of switching, pay the bill and move on.
Until last week. Last week the number was too high. Something in my relationship with the insurance company shattered. After all, it’s not like they had done anything for me, not like I knew anyone there. It was just momentum. And the number was suddenly enough to make me take action.
19 minutes later, I was at Geico.
The problem for my insurance company is that a whole bunch of people will do this at once. When you hit the breaking point with one person, it might be 1,000 or 100,000 people who do the same thing at the same time. And you don’t get a second chance. They’re gone.
It’s not just money. It’s service. Or trust. Or spam.
You can stretch a rubber band for a long time. But then it breaks.