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

Lwiddis wrote:
Does any other forum allow you to complain about them on their forum?

Yes, but i'm probably not allowed to mention it here.

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.

You certainly implied it was immoral or unfair, sorry if explaining basic marketing comes across condescending to someone who operates multiple businesses. ;)

If you want to offer a loyalty/repeat customer discount, have at it. Just a different marketing approach. Assuming you actually achieve high levels of loyalty, it quickly becomes a situation where it either becomes
- The standard price and most customers pay the discounted price killing your profits (assuming you don't create fake high prices that you never charge so you can offer a discount while still remaining profitable).
- Or you effectively charge new customers higher prices which doesn't seem to smart if you are trying to increase your customer base. Why would a customer leave a current provider to pay a jacked up price to you in the hopes that if they stick with you, you might one day lower your price?

Some companies discount everything until the base prices mean nothing.

Actual discounts should be targeted to accomplish something that in the long term results in increased profits. Discounting new customers gets them in the door and hopefully turns them into repeat customers willing to pay the regular price because you provide a good product/service. Unless existing customers are threatening to leave, there is little reason to offer discounts.

Morality & fairness have nothing to do with it.

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.

valhalla360 wrote:

Look up the term "loss leader" if you want to learn more about it.

I'll look up the term "condescending" as well. <3

Tvov wrote:
you've never heard of giving new customers a one time price discount or other incentives?

Yes. I have heard of it. Are you serious?

wildtoad wrote:
I think the worst of these promo ads is Sirius XM where they offer a new customer rate but fail to mention all the fees that are added to the bill, which as I remember double the monthly bill. Never have or will be a paying customer.

This is a different issue. Those taxes and fees will get tacked on with or without a promotion. Particularly for subscription purchases, always ask what the full bill will be including all taxes and fees (preferably get it in writing) before purchasing.

deprived wrote:

time2roll wrote:
Normal and ordinary.

That doesn't mean it's moral or fair.

I run several small businesses and I can't imagine doing something like that.

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

If your several small businesses are that good, they will see how good they are and happily pay full price the next time but not knowing how good they are, they may be hesitant to try your many great small businesses without the discount.

Look up the term "loss leader" if you want to learn more about it.

I think the worst of these promo ads is Sirius XM where they offer a new customer rate but fail to mention all the fees that are added to the bill, which as I remember double the monthly bill. Never have or will be a paying customer.

deprived wrote:

time2roll wrote:
Normal and ordinary.

That doesn't mean it's moral or fair.

I run several small businesses and I can't imagine doing something like that.

You run several small businesses and you've never heard of giving new customers a one time price discount or other incentives?