Make $10/mth From UNHappy Customers...

[Ben Rudge]

I was originally going to title this thread "How To Reduce Attrition Rates On Your Membership Sites"..... either way, this method works... it's being done by some of the more advanced internet marketers already though, so if your a newbie, read on. But even if you're not, you may have never thought of this so... read on...

It's a known statistic that the average life of a customer on a membership site is around about 3 months... but it doesn't have to be that way...

Let's just say you have a basic $47 per month membership site with access to digitally delivered information (like most membership sites)...

Now try this little trick...

When a customer requests a cancellation of their account, instead of just saying goodbye to them forever, offer them a "One Time Chance" to change their mind and stay on as a customer BUT for only $10 a month instead of the normal $47... without any restrictions on their access...

Now, all the tight-a$$ penny-pinchers are probably thinking "No way man! I'm losing $37 a month! They don't deserve full access!" etc etc

But think about it this way...

If they take up your offer, you are now making $10 a month from an "unhappy customer" instead of losing $47.

Now, obviously everyone has different payment structures so you'd have to tailor the specific "One Time Chance" to your own model but you can guarantee that some people will actually take you up on the offer.

Some of these "unhappy customers" may actually like your site but maybe they're just needing to cut back some expenses or something. These are the ones who will be more likely to take up the offer, creating a win-win situation.

Some people are already doing this and it works. I know it works because it worked on me! So if you aren't already doing this, go do it now!

Hope this helps someone...

Ben

[Steven Carl Kelly]

As you know, many large service providers have a dedicated customer retention department that does exactly the same thing. Ever tried to cancel DirecTV service? They'll have you on the phone for HOURS pitching you reduced pricing and special free offers.

[Kevingators]

Great info. A customer that is paying less is still a customer and can be offered other products that might be more appealing to them. It is 10 times harder to get a new customer as is to keep existing customers, so keeping them happy is extremely important even if they aren't very profitable.

Kevin

[Steve Powers]

It seems good,but we have never tried that.Maybe I'll think it over to see whether it's
worthy or not.As you know,when a policy is made,you should operate it for some time.So
many details should be considered for fear that some unexpected things happen.

[JohnMcCabe]

Ben, I'll admit my first reaction was "what if the other members find out?"

Visions of happy $47/mo customers turning into $10/mo customers simply because they can.

Then reason kicked in. Something like this might happen if you offer a way for members to communicate one-to-many, like a forum. Otherwise, you are in the same situation as a passenger on an airplane - you know that 300 passengers probably paid 100 different prices, but you buy the ticket anyway.

Keeping those members would be even more valuable if you have a good funnel in place. You might be losing some of the income from the membership, but they're still in the funnel...

[cscarpero]

Jfax does this a lot. If you try to cancel, they send you to an online chat and then they will twist your arm to stay on by giving you a couple of free months. Of course after the free expires you have to pay full price again.

[Gene Pimentel]

On the surface this may seem to be a good idea, but if it becomes fairly commonplace, then we can expect most 'members' to join, then quit right away knowing their membership will be reduced to a fraction of what others are paying. I think the better solution is to offer a special irresistible value to those who hit the quit button, but not reduce the price. Or, let them stay onboard for $10 with reduced benefits.

[cconlan]

Makes sense to me No customers = no money, so why lose customers when you don't necessarily have to?

[E-supreme]

Thats a great idea. Many companies are implementing this as part of a retention plan!

[BIG Mike]

Originally Posted by Gene Pimentel

On the surface this may seem to be a good idea, but if it becomes fairly commonplace, then we can expect most 'members' to join, then quit right away knowing their membership will be reduced to a fraction of what others are paying. I think the better solution is to offer a special irresistible value to those who hit the quit button, but not reduce the price. Or, let them stay onboard for $10 with reduced benefits.

Yeah...I think a lot of people get in the habit of surfing away to see what kind of deals popup when they cancel midway in purchasing.

I actually had an automated script doing this for a while, i.e.; if they went to PayPal and cancelled before buying they got returned to a cancellation page with a one time offer of a 25% discount.

I finally took it down because no one ever purchased at the discounted rate, LOL.

[francof]

It's interesting and certainly something to consider for your retention strategy though I don't know that it would work for any business. Just thinking of the businesses I'm directly involved in and in some of them, the members are pretty tight-knit and so I think the word would get around and that would be bad.
I think in some of those cases, a variation of that idea might work though, like maybe reduced rate but for a certain period of time, varying on a case by case (so the word doesn't get around that you can just email to cancel and get 50$ off per month ) and also maybe like others mentioned, a variation of the membership, with reduced benefits.
I think this might work well in one of the business in particular I'm involved in where members get websites with their membership... they might not be able to afford the full thing but we could maybe make a restricted access variation where they could still keep their site online and keep it updated but not include all of the perks and benefits.
Ok now, I'm just thinking out-loud thanks for the thought-provoking post

[clubvikram]

I never really believed in reducing the price of any product to make a sale. I think a better idea is to downsell customers to a "lite version" that's somehow different enough than the regular version. That way, it won't interfere with the value of your regular membership site.

[George Wright]

I think the very best way is to do it the way Allen Says has been doing it for years. One time memberships. (latest example War Room) with back end sales to loyal members. (WSO, Classified, Warrior for hire, etc. forums, for example.)

No worries about cancellations.

George Wright

[1040]

Good analogy from John.
Then reason kicked in. Something like this might happen if you offer a way for members to communicate one-to-many, like a forum. Otherwise, you are in the same situation as a passenger on an airplane - you know that 300 passengers probably paid 100 different prices, but you buy the ticket anyway.

I agree may have some merit.

[Ben Rudge]

Originally Posted by 1040

Good analogy from John.
Then reason kicked in. Something like this might happen if you offer a way for members to communicate one-to-many, like a forum. Otherwise, you are in the same situation as a passenger on an airplane - you know that 300 passengers probably paid 100 different prices, but you buy the ticket anyway.

I agree may have some merit.

Yeah, this is so true. If your members have a way of communicating with each other (like forums etc) then word will get around. You could end up having everyone cancelling to get a saving....

But then... that got me thinking... what would that say about the true value of your site? If people are queuing up to scam you out of $37 then maybe they aren't getting enough value for money.

I read and hear all the time from experienced marketers that you need to be providing 10 times the value of what you're charging... then you'll never have any complaints... genuine ones anyway.

Ben

[Scott Ames]

Another twist on this, that I have seen, is to reduce the service just slightly.

Can't afford $37 a month? First, you are a loser, but don't worry, you can stick around for only $10.00 a month and keep almost all your stuff....

[Scott Ames]

Originally Posted by Ben Rudge

But then... that got me thinking... what would that say about the true value of your site? If people are queuing up to scam you out of $37 then maybe they aren't getting enough value for money.

Ben

Sometimes true, but even with sites that give great info, if people can save money I think most will. It is natural to want to save a buck. If one could get the same service for threatening to leave, and then save $27 a month, why not?

Once the word gets out those that are happy with the membership will feel a bit cheated. Sure we all pay different amounts on an airline, but not knowing what others pay keep it civil. If I could scan the cabin and see that I paid $440 and someone else paid $123 and another paid $177 I would feel cheated. I wasn't cheated, I agreed to that rate, but that doesn't stop the feeling.

The only way to know for sure if it's going to work is to test. The bad thing is that if the test fails and you have the majority of subscribers dropping down to $10 a month, you've lost a good chunk of your revenue.

[theimdude]

So this view is now from me as a member to a few membership sites one of which is $77.

As far as I am concerned if a company do this they are ripping of the loyal customers like me and if I should find this out would cancel my membership as you are actually stabbing me (the loyal client in the back)

Why don't you just serve you clients and they will stay or are you guys that desperate for money

Yes $10 for you but do you really care for the clients that pay the full membership

[uncle randy 71]

I understand the point of this, but the question comes to mind "if you can afford to do it at $10 a month, why not just offer $10 a month to everyone when they originally sign up?"

Another thing to consider, and I am using more tangible items that we are all familiar with, how many times have you received a offer that was 78% less just from threatening to leave??? Whether it be a used car, new electronic, a house, or a shirt, has anyone ever looked at you and said "WAIT!!! We really need to sell you something, would you please buy it if we mark it down 78%???" Once again, I agree with the earlier comments about keeping them in the funnel and being able to market to them later on. But it just seems like you are giving up SO MUCH on someone that DOES NOT WANT TO PAY YOU, instead of focusing on replacing that one member with 3 new members that WILL PAY YOU.

Just my opinion.