It's an almost irresistible path to hitting that elusive quota. But it comes with a hidden cost: higher customer churn! Here’s why⤵
📈 Our research shows that customers who receive initial discounts ultimately churn at significantly higher rates! Customers with no initial discount have a 2.6 times longer lifespan on average. There are (at least) three reasons why...
1️⃣ Devalues Your Solution
Deep discounts (>25%) make your offering seem less valuable to customers. As a result, they often put in less effort to learn and integrate it effectively. When they don't get good results, they churn.
🛑 REMEMBER: The primary reason customers churn is the failure to achieve measurable results. Customers with measurable results stay 6 times longer than customers who don't.
2️⃣ Attracts the Wrong Crowd
Big discounts can also lure in the 'tire-kickers' who aren’t truly committed or a good fit. These customers don’t value the solution as much and often aren't set up for success, which leads to more customers who don't get good results. Once again, more churn!
3️⃣ Creates Short-Term Loyalty
Steep discounts, and especially time-limited discounts (like the first 3 months or the first year), can attract the most price-focused customers. When the discount ends, they’re off hunting for the next bargain, leaving you with a churn-sized hole in your business.
THE SOLUTION?
🎯 Steer the sales process away from price by focusing on the customer's results.
🎯 Target the best-fit prospects: those who can get the best results.
🎯 Show prospects how your company's unique expertise will drive their measurable results.