So much buzz about getting and keeping customers I felt we needed to address this strategy. In this time of competitive thinking, bottom of the barrel pricing and creative ways to get new clients, one has to wonder if the old time methods can still work. Old time meaning offer a discounted price to gain a new client. There are a couple of schools of thought on that strategy. One strong thought is the disparity of rewarding your new client with a discount while your loyal clients pay full price. Hmmmm. Is that a winning strategy? I think not. It reminds me of my retail days when standing at the counter taking care of customers, we were told of offer a discounted price to a customer who opened a charge account on the spot at the register. Meanwhile the loyal charge customer who had been shopping with us for years was standing right next to customer #1 scratching her head asking where her discount was for the years of loyalty.
Now if you have a program that rewards longevity and loyalty to your company, then it makes sense to perhaps offer an incentive to hire your service. If not, then how about rewarding your loyal raving fans before using price to attract a new client.
And speaking of using price to attract a new client; is this the strategy you really want to use to bring on a develop a loyal customer base? Or is it going to attract the price shoppers who will always be on the lookout for the best deal. Reason #2 to reconsider giving a discount to attract a new client. Is the price shopper going to keep looking at every new ad that pops up at a lower price? Do they value your service enough to pay for it or are you just playing the “how low can we go” game. Because at some point, you will have to keep lowering your price and lowering your price to stay competitive. There will always be someone who will do the job cheaper. That’s a given. But do you want to be the company that will sacrifice name, reputation, quality in order to be the lowest guy in town? And what will lowering or eliminating your profit margin do to your bottom line? AND your future? Lots to think about here. Be sure to crunch the numbers and do some soul searching about the kind of company you want to be before you jump on the price war battleground.