Going Too Far

[tiedeman]

Is there such a thing as going too far with giving customers discounts?

I mean right now I am handing out discounts left and right, but my main reason that I am doing it is to get my foot in the door. Sure, in the future I will probably give out discounts as well, but not as much as I am giving out this year.

Another thing to touch on. Is it right that you give new customers discounts compard to current customers? Why shouldn't the current customers get discounts, they have been with you longer compared to the new customers.

[Billz]

Well, I have thought of that too. I would hate for all the customers I have to go somewhere else because they were getting a special, but I have no intention of discounting their current services. I would give them a special on other services only.

[Steve]

Quote[/b] ]Is there such a thing as going too far with giving customers discounts?
Well I would think of it now as buying customers. Sometimes companies pay thousands of dollars for customers. For example, a few years back AT&T went on a buying spree and got into the cable business. The average cable customer at the time spent about $50 a month on cable. AT&T paid about $4,000 per customer to buy them from another cable operator. Now when you do the math, it would take 6 1/2 years to make that money back. But they figured once they got you, you wouldn't switch or couldn't switch. So they felt it was worth it to them. After all was said and done it was a disaster for AT&T who eventually was bought out by another company.
But it makes you think.

Quote[/b] ]Is it right that you give new customers discounts compard to current customers?
Sure it is. You are trying to attract new customers. This is a standard approach. Many times you will see discounts offered and in the fine print it will say "for new customers only."