ACT NOW! THIS DEAL WON’T LAST LONG! (But ignore if you’re an existing customer!)
Do your sales strategies foster an environment of customer distrust and complaints?
“Sign up today and save 20%!” Who hasn’t been drawn into a bargain by the use of consumer sales and offers that tout the bigger better deal. But what is the perception for the consumer already bound, who is in the class the deal seeks to attract, and tied into a contract with the company at a higher price? Companies’ use of deals and bargains to draw in new customers isn’t new, to be sure. But do they really just diminish customer loyalty, encourage complaints, and ultimately lower profitability by increasing customer turnover?
We recently enjoyed a Caribbean cruise, an easy vacation to book online, and a way to “get away” without much investment of time or thought in regards to schedule or cost. Cruises are perfect for the busy professional – just head to a website, make a few clicks and your all-inclusive vacation is ready to go! We even booked and paid for our excursions and scheduled spa time online. Satisfied with the convenience, we could put planning out of our head and worry about nothing except boarding the ship on the appointed day, ready to enjoy all the vacation had to offer. And, always appreciating operational efficiency, we gave a nod to the powers-that-be who recognized the value of encouraging consumers to purchase and schedule ancillary options like spa visits ahead of time. After all, that saved the cruise line valuable time and money by not even needing to interact in person with the consumer to make a sale. Everybody wins! That satisfaction was fleeting, however, when upon boarding the ship, friendly spa staff were positioned on the pier holding signs indicating, “sign up for your spa appointments and get 20% off,” or my favorite, “get 75 minutes of massage for the price of 50!” I couldn’t believe the deals that I’d missed by booking ahead of time. And, there were no lines and plenty of appointment times available, so by booking ahead of time we had accomplished only one thing. We paid too much. We’d missed the deals.
Not one to be taken advantage of, I approached the counter to inquire about the deals and how I might enjoy them. Unfortunately I learned since I had booked online, there was nothing that could be done to change the price, time, etc. No worries, I told the fine Frenchman working the desk, “I’d like to just cancel and get a refund.” I intended to rebook at the sale price. As I suspected, he could do something after all! Instead of cancelling as I’d requested, he offered that my reservations could instead be changed to include the sales occurring at that moment. I walked away happy with my new deal. I also walked away with distrust. How did I know the customer tomorrow wouldn’t get a better deal? How did I know all these spa prices weren’t simply negotiable? Maybe I wasn’t getting the best price after all?
Unfortunately, this is common in our consumer experience today, and the spoils go to those committed to asking the follow-up questions and committing the time to chasing the deal. Have you ever called a cable or satellite provider, phone carrier, insurance agent or most other vendors who sell a service at a monthly rate and asked for a discount? If you are willing to spend just a few minutes exploring competitor pricing, and current deals the provider is offering to new customers, you will hang up the phone saving hundreds if not thousands of dollars over the life of your contract. And those who don’t spend the time won’t.
I think deals that bring new customers in but do nothing to reward the loyalty of existing customers are shortsighted and ultimately erode consumer trust and the value of your brand. I believe there are ways to expand customer base while rewarding brand loyalty at the same time. Excellent communication with the existing pool of consumers is a great way to start. Offering loyalty discounts is another. Depending on your business, there are always creative ways to keep the direct-to-consumer offering exciting while encouraging long-term commitment to the brand.
As a small business owner and someone interested in this phenomenon, I’ve begun testing this “just ask for it” theory. When booking event exhibitor space the other day, I called the event host and asked if any discounts were available to small business owners. He cut the price in half. In half!
I think businesses need to be confident in the value of their product or service, and skilled enough to sell it without a “deal”. Deals that offer preference to one class over another erodes consumer trust.
I’d like to hear what you think?
As a consumer, do you like to chase the latest and greatest deal?
As a business professional, do you think deals to new customers erode consumer trust, and ultimately the value of the brand?