Trust, Lock-in and Switching Costs for Coaches, Consultants, and Advisors
This is post is about lock-in.
Let’s get the Urban Dictionary definition out of the way first (it’s the first place my mind went to…):
The largely illegal state of a bar or pub during the period of time after last call, during which the bar is locked to all incoming would-be patrons such tha bar employees and a select group of friends can sit around and drink without all the annoying cash-paying customers bugging them.via Urban Dictionary
In economics, lock-in, and specifically vendor lock-in, can be defined as:
The restricted or proprietary use of
a technology, solution or service developed by a vendor or vendor partner. … Vendor lock inis also known as proprietary lock-in or customer lock-in.
As the behemoths of the tech sector have made their presence known in all kinds of ways, we now often tend to think about lock-in in this context. For investors and company founders, gaining lock-in can be the key to the gold at the end of the rainbow. It’s often a highly desired state.
But what about lock-in when it comes to service providers – and more specifically the individuals who can play a highly trusted role in our lives?
Recently I met up with an entrepreneur friend for coffee. He’s been working with a coach over the past few months to help support him on the inevitably bumpy path that is building a new venture.
As he told me about his experience it was clear that working with this coach had brought him benefits, but there was also a sense of uncertainty around the fit between them as client and coach.
They were nearing the end of their current agreement and he found himself wondering what to do next. Should he continue on, or find another coach who may be better aligned with his needs?
The question at the front of his mind was around lock-in and the cost of switching.
Now that the incumbent had got to know him, they possessed a lot of important information on the context and mission of his business, as well as a deeper understanding of him as a human that can only come with focused time together.
The situation brought up a number of questions:
What could he do to figure out if the new coach was going to be better?
What did ‘better’ even mean for him in this context?
What had he learned so far that could help him understand this?
How could he know what the cost of the switch was going to be?
How could he minimize his downside?
Were there ways of enabling a transfer of knowledge and understanding from one coach to another?
Ironically, many of these were great questions for a coaching session.
For me, it highlighted the importance not just of coaching, but the value of a wider support squad or braintrust: a group of people in your corner who can advise, support, question, or challenge when you need it.
It also brought home how lock-in is fundamentally about trust. It’s one of the biggest investments we can make.
Just like some other types of investments, trust can compound, and it can also be withdrawn or even bankrupted surprisingly quickly.
What it can’t do, though, is be rapidly transferred. There aren’t any shortcuts for that.
Instead, when the client says it’s time we should always take the stance of being trustworthy to make the transfer, no matter how troubling or time-consuming, of what’s been entrusted to us.
Lock-in is a powerful force, but we should never give in to the temptation to abuse it when we find ourselves in the position of a trusted individual.
Bottom Line: Lock-in isn’t just something we should think about when it comes to products or larger vendors. It’s just as important, if not more so, with the individuals with whom we place our time and trust. And just like a late night lock-in at the bar, trust is everything.