Introductory Pricing: good or bad?

olegoleg Posts: 13subscriber
edited March 2007 in Marketing
You`ve probably heard this before:
Get HD cable, high-speed internet, and a digital phone line for only $33/month (each) for a full year!Regular rates apply after the promotional period is over.  If you spend some time digging through the fine print, you might even find the regular rate.  Expect anywhere from a 30% to 100% increase.
 
Sounds familiar?  Telecommunications providers are big fans of such offers.  Is this a good marketing tactic?
As a consumer, I tend to stay away from companies that do this.  It seems too much like bait and switch to me.  Shouldn`t loyal, long-term customers be rewarded for staying with your company, rather than punished with a massive rate hike?
Sure, I might sign up for the promotional offer, but you can count on me looking for a better deal elsewhere as soon as the regular rate kicks in.  In my opinion, all this does is encourage consumers to constantly switch providers, rather than building brand loyalty.
What do you guys think?

Comments

  • iouone2iouone2 Posts: 14subscriber
    I think this is just short sided thinking on the business` part. Because if the biz does a good job, I am more likely to sign on at a "normal" rate and get a "break" for remaining.But reality is reality. People DO sign up at "discount" prices. And do stay because it`s more trouble to change. Life is complicated enough.Also, this "discount" price must not be so much of a "discount." The biz still still needs to earn a profit. So couldn`t the biz offer the low "discount" rate permanently? That` makes me feel ripped off. However, most people don`t look at it like that. Most people see the sign (or words) ON SALE NOW and flock to it.oops... forgot to answer... good or bad... ???? it just is.
    iouone22007-3-12 12:27:43
  • olegoleg Posts: 13subscriber
    Also, this "discount" price must not be so much of a "discount." The biz still still needs to earn a profit. So couldn`t the biz offer the low "discount" rate permanently? That` makes me feel ripped off.
     
    This is precisely how I feel!  The business obviously still makes a profit with the "discounted rate."  The switch to a "permanent rate" feels like the business is telling customers "Now that we`ve got our hooks in you, we can charge you whatever we feel like!"
    There is a broader issue here than just promotional rates.  It seems like most subscription based service providers (the service could be anything, from telecomm to a fitness club membership) focus all their efforts on bringing in new customers.  Once you singed up, they could care less about keeping you happy, unless it involves selling you additional products or services.  They are taking a gamble that you will stay with them simply out of inertia.  A bad idea in my opinion, but unfortunately it seems to work.
    Here is another example along the same lines:  a wireless phone service provider has a "new every 2 offer", meaning you get a new wireless handset for free every 2 years as long as you remain with the carrier.  Sounds great, until you come back in 2 years and they tell you they raised the minimum monthly subscription to be eligible for this offer - so you have to sign up for a more expensive plan, or no free phone for you!
  • VerveX3VerveX3 Posts: 0subscriber
    The only companies I note doing this are monstrous blobs in the world economy. A small company in any business would be, as they said in the old days, tarred and feathered and run out a town on a rail. Try running Verizon, Yahoo, Cingular, the NEW AT&T etc. out of town. Trouble is, all you can hope for is to find the best of the sorry lot.
Sign In or Register to comment.