why do renewing members get a raw deal?

deprived wrote:

valhalla360 wrote:


I'm confused what is immoral or unfair about offering new customers a discount to get them to try your business?

Since I never said it was unfair to offer something to new customers, I can't answer that.

My point, if it doesn't confuse you too much, is that loyal, repeat customers should be treated as well as new customers.

As I mentioned before, rewarding loyalty doesn't increase the bottom line. For a small business, loyalty rewards can keep them in business. For a big company with stockholders, it's not about "keeping in business", it's about always making more money.

For a company to make more money than yesterday, it has to bring in more customers. If they have 100 customers today paying $20 each, that's $2,000. If they bring in 20 more customers at $10 each, they've increased their money by $200.

However, if they give their existing customers the same discount, their base drops to $1,000. Now they have to bring in at least 100 new customers at $10 each to break even.

Which is easier? Bringing in 20 new customers or 100 new customers?

And, even if 20 of those existing customers get mad because they have to pay $20 and leave, the company only has to bring in an additional 40 customers at $10 each to compensate.

So, 100 existing customers at $20 each = $2,000

20 leave = -$400

Bring in 60 at $10 = $600

They have an increase of $200.

Vs.

100 existing customers getting a loyalty discount at $10 = $1,000

60 new customers at $10 = $600

They have a loss of $400.

Many companies, if you call and whine, will end up giving you that discount - but ONLY if you call and whine. Because:

100 at $20 = $2,000

10 leave = -$200

10 stay at a discount at $10 = -$100

60 new customers at $10 = $600

They still have an increase of $300