Thoughts, ideas, and lessons learned from real-world customer engagements and interactions...

The other day we were working with a customer to finalize their CRM strategy. As we were putting together some of the pricing details of our recommended CRM, we noticed that they were offering a special pricing offer that represented anywhere from 30-50% off of their regular price. As always, we checked the fine print and sure enough the special pricing offer was only for NEW customers.

Now, I am sure that everyone reading this can point to examples of this type of promotion that companies put in place to attract new customers during slower times. However, we would like to take this opportunity to challenge companies to resist using this type of tactic which can ultimately devalue the perception of your solution within the market, and can alienate the customers who have already validated your solution with their purchases.

OK…so sales are down and your sales forecasts are telling you that it is going to be slower for the foreseeable future. We get it…we agree that something needs to be done to avoid what your sales forecasts are telling you. These times are when you need to get even closer to your current customers, scrub your forecasts of laggard deals, and find new ways to uncover fresh sales opportunities. Here are just a few ideas that you can use beyond short-sighted simple pricing discounts to help you achieve your goals:

• Revisit your referral program! Why not put in place a strategic promotion that rewards your current customers with a gift or discount for every new paying customer that they refer to your company? BTW…this type of discount does not devalue your solution like the discount for new customers. Current customers will not come to expect the same type of discount on future purchases…unless of course they bring you another new customer!
• If you offer multiple products and services, review current customer past purchases. Zone in on customers who have purchased more than just one of your offerings and engage with them to understand the value that they have received from the combined solution. Build these solutions into a bundle and build a promotion on this bundle that offers even more value to the customer when purchased together.
• Get out of the building and talk with your current customers. Uncover how they would like to buy your product or service. Find ways in which you may be able to change your models in order to make it easier for customer to purchase your solution today. Bottom line…eliminate the risk and make it easy for new customers to purchase.
• Rather than discounts, offer payment terms. Potential new customers not having budget to move forward with a purchase of your product or services today is a reality. However, simple discounts will typically not solve this issue. Engage with these prospects in an honest dialogue to understand any constraints that they may have. Use this dialogue to offer extended payment terms in order to reduce any perceived risks and to lower the barriers for them to buy from you today.

There are many options that you can utilize to free up stalled prospects and to attract new sales opportunities. However, take the time to make sure that you recognize the investments your current customers have made into you, and the solutions that you provide. Avoid implementing quick fix sales tactics like simple price discounts which may attract you a few new customers, but may harm you in the long run as you may be throwing your current customers out with the bath water.

We would love to hear your comments. As a customer or consumer, how do you feel when you see these types of promotions which are made available only to new customers?

 

Related Posts

• - Our own guidelines for using email and surveys in the Customer Development process
• - The truth is – well – the truth!
• - Ecosystems are not just for waterfowl
• - Co-opetition