The Customer Retention Triangle: How Businesses can quantify their customer appeal

The customer retention triangle is a concept that I came up with to easily understand how people choose where they buy from. Buying decisions are not always as conscious as we believe:

Emotion is what really drives the purchasing behaviors, and also, decision making in general. 95% of purchasing decisions are emotional.

Often buying decisions are based on deep personal values. That being said, we can simplify these reasons into 3 categories, broadly speaking.

  1. Price
  2. Value
  3. Convenience

I first thought about this concept when I was sitting in a coffee shop waiting for my car to be washed. I was sipping a very mediocre cup of coffee and I was wondering why. Why was I drinking this coffee? Why had I paid for it? The reason was simple. I had paid for the coffee because it was the closest coffee to the car wash. But why had I chosen that car wash? And that is how the Customer Retention Triangle was born.


Every consumer has a price. In the back of our heads there is a pre-conceived value that we are willing to pay for a product or service. If we are wealthy, that number will be higher than someone who is less wealthy.


Products and services provide the consumer with value. Value can be explicit, such as solving a problem. Or it can be implicit, such as elevating social status. For example, Apple products will likely elevate your social status more than a generic Chinese phone. To some people this matters, to others this isn’t even a consideration.


If a product is incredibly well priced, but difficult to aquire it is unlikely to sell. On the other hand, if something is very convenient, but a higher price than the nearest competitor 100km away, you’re still likely to buy from them because of the geographical convenience. Convenience can come in other forms as well, such as a coffee shop in close proximity to the car wash.

If a business masters just 2 of the aforementioned aspects, they will win their customer over. Deciding which 2 aspects to master will also determine what type of customer the business will attract.

Here are some practical examples

My Carwash

The car wash that I spoke about earlier, is barely branded. I couldn’t even tell you the name of the car wash even though I have been there many times. But, why do I keep going back to that same car wash? It’s appropriately priced and conveniently close to a coffee shop where I can work and sip a mediocre cup of coffee. Few other car washes in my town offer me this opportunity. Often you’d have to sit on a cold picnic table and wait outside, rain or shine.

Convenience + Price

The iStore

The iStore sells Apple products which thrive off of selling a life style, rather than an actual product. The value is implicit as well as explicit. iStores are frequently located at large shopping malls and near subway stations and other high traffic locations. Their high prices add to the social status that is associated with the Apple brand.

Price + Value

My car

When I was in the market for a new car I used many online car directories. I found a car that matched what I was looking for, however, it was almost 2hours away. This was incredibly inconvenient, I had to take time off work to go buy the car. Once I was there, I had to sign papers until my hands bled. The point is, this car matched my needs (value) and it fit my budget (price).

Price + Value

Isn’t this an over simplification?

Isn’t this a gross over simplification? Yes, probably. As I mention the the following paragraph, the point of the Customer Retention Triangle is to create a language that allows business owners to talk about what makes their business attractive to their customers. It is entirely likely that all 3 of these aspects will attract a customer to a business. But, I’d be willing to bet that 9 times out of 10 that a business is really good at 2 out of 3 of those aspects.

Haven’t we heard this before?

If you’ve ever studied marketing in any capacity before, you’re probably thinking that this sounds a lot like the “4 P’s” of marketing: Product, Price, Place, Promotion. You’re correct. There are lots of correlations and similarities. However, the key principle of the customer retention triangle is that you only need to master two aspects to be successful. The “4 P’s” of marketing teach that you need to get all 4 correct to be successful. There is some truth to this, but I think it’s a different discussion that detracts from the entire point of the Customer Retention Triangle – To quantify what attracts customers in your business’ niche.

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