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The Curse of The Discount Cliff
Look Out Below
Today’s episode is brought to you by my loving wife, Simona Bogode. Without whom, the specificity of the content which follows would simply not be possible. Enjoy.
Simona suffers a perennial problem: she wants to do her own nails, but she also wants the quality and consistency achieved by entrusting her hands to a professional. What to do? There are more at-home nail solutions than there are nails.
She found a vegan all-natural solution and ordered herself a gift for the holidays: a $125 set including 3-color pods.
The next day, the company retargets her on social media with an advertisement declaring a discount on every nailset, including the one she purchased not 24-hours ago, which fell to $95.
What does one do in this situation? Simona saw a set with 12-colors at the $95 price. She emailed the company to request an exchange for her set, which had yet to ship.
That’s when they apologized, sympathized entirely with her situation, swapped out the set, refunded the price difference, and threw in a bonus 1-color set to boot – and that’s the end of this article.
Lol Just Playin’
Customer service responded by saying they do not accept returns nor exchanges due to health and hygiene reasons… for a product that had yet to leave their warehouse.
Again, this was less than 24-hours from the time Simona placed the order, she had yet to receive any shipping notification.
Here’s that response in full:
At this point, Simona requested a complete cancellation of the order so she could place a new order at the sale price.
And that’s when Josh completely understood and—
According to Josh, their fulfilment service is 100% automated and therefore cannot cancel orders, amend them, or much of anything else other than make excuses.
Hopefully Josh wises up and refunds Simona the difference, but we have yet to receive a response to that request. But there’s obviously a bigger point here.
The Discount Cliff
Simona fell off the discount cliff. People who purchase far enough away from the cliff are happy, presuming they never find out about the discount.
And people who purchase at the bottom of the cliff are ecstatic, they avoid paying ‘full price,’ and may never pay full price. The truly miserable customers buy right before the cliff and watch as the floor bottoms out.
Clever companies who play the discount game know to compensate customers who fall off the cliff with refunds, free gifts, and generous exchange policies and in-store credits. Strapping parachutes onto your cliff-diving customers is the cost of doing discount business.
I’ve B’d and M’d about discounts before, so no need to rehash everything. But this entire situation was avoidable and smart companies avoid this situation.
Smart businesses focus on creating products their customers want at a price they’re willing to pay. In fact, they improve their products time and again in their search of new ways to offer value to existing customers.
It’s not easy work, it’s much harder than setting a randomly high-price and discounting at the earliest signs of underperformance.
Long-term, that is how the greats stay great – and deep down, we know that’s true but many of us refuse to face that truth, myself included. If your customers dive off of cliffs, you can keep strapping parachutes on them or you can stop pushing them off – your choice.