The Status Quo Penalty

I was intrigued to read about staying in post at a continual employer as the job-for-life era expires. Here's a line that stood out for me;

"Most people instinctively understand the status quo penalty".

In the context of any associated salary raise, these stats were produced by The Times (of London);

"The most recent year we have data for is the 12 months to April 2021. Those who moved enjoyed not just higher hourly wages, but benefited from an annual pay increase of 9.5 per cent. Those who stayed got a rise of 2.9 per cent. Covid did not skew the data: in any year over the past decade those who moved enjoyed higher pay increases than those who did not."

The author proceeding to make non-financial benefit cases where staying overall beats leaving.

Many years back I read research finding that to unseat an incumbent cold, you'd have to offer an eye-wateringly unrealistic reduction on their price.

Whether better-the-devil-you-know relationship familiarity of 'institutional memory' or track record, distastefully high perceived switching costs, or benefit of the doubt with promised exciting touted product developments.

All contributing to an Economics concept of the Incumbent Advantage.

Yet this suggests we can turn this around.

After all, there's also the irresistible pressure from typical customer life spans. In part as over the passage of time, any incumbent is considered to leak support.

Clearly timing plays a huge role. A flavour of kairos, as I'd often cite (especially with new products). And you ought have routines in place to identify when such opportunity is presenting itself.

Classics including traditional renewal cycles, organisational or personnel changes, and their strategic or tactical realignment.

Yet many a buyer can be unaware of the step-change you bring.

In which case, what is the price of them carrying on as they are?

What is, in effect, their status quo penalty?

And what must such cost be, to allow you to be seen favourably?

With options such as to oust incumbent, reallocate resource, or simply try something fresh.

To stand still is to fall behind. Tap into FOMO. Open minds to the dream being possible.

Bring out how unwanted when now visible, such penalty is.