January 17, 2011

Dear Marketing Executives: Weigh In On This One

Dear Marketing Executives:

I want to explain a situation that happened to me on Saturday.  After I describe the situation, I want for you to weigh in on the strategy employed by the company I purchased from.

What I Did:  I purchased $99.95 of software on Saturday from a company.  During the purchase process, the company attempted to cross-sell me four other software titles, for $99.95 each, a total of $399.80.  I chose to not purchase any of the four software titles.

What They Did:  They called me this morning.  They asked me if the software was working to my satisfaction (yes, it absolutely was).  The customer service representative says ... "I noticed that you did not purchase any of the four additional titles we sell.  I want to offer you a special promotion.  For today, and today only, I will sell you the four titles for just $99, a savings of $301 over the $400 you would have paid if you had purchased them on Saturday."

Your Input Is Needed:  What do you think of this cross-selling strategy?
  1. It is a brilliant way to extract $99 additional dollars from a customer at virtually no cost, increasing customer lifetime value.
  2. It is wrong to penalize the customer who did exactly what you wanted the customer to do (buy at full price and buy many items) while rewarding the customer who failed to do what you wanted the customer to do.
  3. It's ok to do this, because the full-price customer will never know that you offer deep discounts to customers who don't exhibit optimal customer behavior.