pricing issue

Hello,

We are going to be rolling out new packages. The problem is that these
packages are both more generous and less expensive than the existing
packages. The problem is that many existing customers will not notice the
changes for a few months (probably) and will then find out about the changes
and call in to change to the less expensive, more generous packages.

Problems:

1. Customers will be angry if they are paying more for less. The new
packages won't be secrets but many will probably still be angry and possibly
leave the company.

2. The company could really lose if all these customers paying a lot now
want to downgrade to a much less expensive package. The owner is,
justifiably, concerned about the affect this will have on the bottum line.

As the marketing coordinator I am developing these new packages -- which are
necessary to be competitive -- but I want to make sure that I don't cause
more problems than I solve.

Any advice on how to handle problems like this? Any resources, Web sites, or
books that might help? How have other businesses handled similiar problems?

Thanks.

--
Robert Anderson

In article <d0ambf01s9m@enews3.newsguy.com>,
"Robert Anderson" <rbanderson@nospamnwlink.com> wrote:
> We are going to be rolling out new packages. The problem is that these
> packages are both more generous and less expensive than the existing
> packages. The problem is that many existing customers will not notice the
> changes for a few months (probably) and will then find out about the changes
> and call in to change to the less expensive, more generous packages.

The right thing to do is notify all existing customers about
the new pricing structure, and allow them to migrate. Doing
anything less will be seen as a rip-off, and you will lose
all credibility and good-will that you have built up.

If I found out that someone had a better package for less money,
and didn't tell me, I would consider that to be theft. I would
move to a different supplier, even if it meant more money just
to send a message that I will not tolerate being ripped off.

A good example of this was the major long distance carriers
who introduced new less expensive LD plans, but allowed existing
customers to stay on the older more expensive plans. Darwin
has paid a visit to each of these major LD companies. ATT is
being sold to a spin-off, MCI went broke, and Sprint loses
money on LD.

Brand loyality is very hard to build, and very easy to lose.

-john-

--
================================================== ====================
John A. Weeks III 952-432-2708 john@johnweeks.com
Newave Communications http://www.johnweeks.com
================================================== ====================

"John A. Weeks III" <john@johnweeks.com> wrote in message
news:d0b5br0259i@enews2.newsguy.com...

> The right thing to do is notify all existing customers about
> the new pricing structure, and allow them to migrate. Doing
> anything less will be seen as a rip-off, and you will lose
> all credibility and good-will that you have built up.

Yes, yes, an email would be sent out to all customers notifying them of the
new releases. The point is that many of the existing customers will ignore
this email, the right person won't receive it, etc. Some customers will
inevitably find out about the new releases 6-months or more down the road.

I have been through this sort of thing before and it can take some customers
a really long time to find out about something and, sometimes, they are
angry that they were not told about the new releases. Well, sure they did
not get an invidivual call but the new releases were not secrets.

Also, how do I deal with the owner of the company's concerns about loss of
revenue from customers going with lower priced plans? I want a way to sell
him on the idea it is worth it to have some higher priced customers go with
lower priced packages in order to be more competitive in the market. We all
agree that our current packages are not competitive right now.

How could we do this smoothly?

> Brand loyality is very hard to build, and very easy to lose.

Very true. Well said.

--
Robert Anderson

I don't know what kind of packages your selling which limits
the advice I can give you. Have you considered upgrading
the old customers? Something that will keep them at their current
pricing level.
That way most will not downgrade their package level.
Everybody will be happy and in the end become more loyal customers.

Keith Haig
Haig Consulting
www.haigconsulting.com