We are testing a tiered discount program where a customer gets a lower weekly rate when they pay for a longer term Even though this may not be a new marketing concept, it's a new and attractive option for our customers. Our terms are currently set up as 12, 26, or 52 weeks. The customer is notified of the option to SAVE MONEY via a message on the invoice (copy of invoice is below). Basically, if they pay for 52 weeks they will be saving 20 cents per week or a total savings of $10.40 per year. Paying for 26 weeks will be saving them 10 cents per week which is a savings of $2.60 for the term.
Early results show an increase of 80% in the percentage of customers paying for 52 weeks and a 25% increase for 26 weeks. On the negative side there is an additional discount expense incurred. However, by reducing the churn through customers paying longer terms, we will get more "BANG for our buck."
Let us know what's working, or programs you may be testing in your market to battle churn and improve retention.
I have always loved this idea among other customer loyalty reward programs. It's a positive way to treat our readers instead of slapping them in the face by offering discounts only to new people. Though many sites do not offer discounts at all.
ReplyDeleteA side question: Is it truly an expense line item for the discount at your site or is it a downgrade to revenue? I understand that some of us are set up differently than others in this regard. If it is in fact an expense then this is an inexpensive reward. If it were counted against your revenue instead would you prefer to offer a low cost premium of some kind?
It hits our revenue but the amount is less than our typical premium(gift cards)offered to prompt 26 and 52 week payments. Better bottom line results.
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