A company that I like (which is why I’m not name checking them in this article, for reasons you are about to see), offers a service. This is a high quality but pricey service, the sort of thing you can use again and again over the years. But it’s the sort of service you pay for each time, not one you can get a subscription to.
Their service has a single flat cost and this listed price never changes.
But they offer a new customer discount of $30 off this price to attract new customers. If it’s your first time using them, you’re entitled to this discount. So far, so good, right?
They also offer a returning customer discount. You’re eligible for this discount after using them even just once. That discount is… wait for it… $30.
So, to recap:
- A new customer gets $30 off their service because of the new customer discount
- and then every time after that gets the special discounted price of… $30 off as a thank you for being a returning customer
They fail to see where the problem is. But you see it, right?
If you offer the exact same discount to everyone, it’s like you aren’t offering a discount at all. If every single customer gets $30 off the price, that’s no longer a discount… that just becomes the price. Their listed price is a complete fiction because everyone (since, literally, everyone is either a first time or returning customer) gets the $30 discount. They basically made up a listed price that they never charge that was deliberately inflated to make it look like they were giving a discount.
I understand what they are trying to do. They want to mind game me into thinking I’m getting a discount so I feel valued as a customer. Except that it doesn’t work. Because I know everyone gets that same $30 discount, I find myself resenting them because they basically offer no discount at all. It backfires completely, at least for me. I’m sure someone really dense out there is going, “Wow! What value!” but I have to believe that’s not the majority.
I like their service but this actually makes me take pause before doing business with them because I don’t feel valued as a customer. I feel like they think I’m stupid. I feel like they don’t value my business enough to actually give me a real discount. They’d actually be better off doing occasional $30 off specials from time to time to make me want to take advantage right then instead of the forever $30 off.
This is something to keep in mind in your business. If your item is always on sale for x, you limit your ability to sell it for y later. But, more than that, your customers will gradually come to resent that x price as well. A perpetual sale only makes the sale price become the actual price.
How would you fix this situation if it were your business? As a customer, are you aware of stuff like this?