Haven’t you often been the target of campaigns where marketers lure you with offers where you get a discount on your next purchase. They are trying to retain you as a customer but some times, even if they are offering a price off they may lose you as a customer. Offering rewards may not always, surprisingly, work, says Wharton marketing professor Raghuram Iyengar in an interview on Knowledge@Wharton.
Iyengar says that he worked with a cell phone company that was trying to do these retention campaigns. For one group of customers who were randomly selected, they did a pricing plan campaign. For another group of customers, they did nothing. The group of customers who were in the retention campaign actually left a lot more, which was pretty bad for the company. Iyengar says that retention campaigns may work if only you do it in a targeted manner. In the case of this cell phone company, the price-off offer made customers look at the deal. And if they’re getting a good deal here, why not look elsewhere, was the motivation to leave. “What that suggests is retention campaigns must often be targeted campaigns. Think carefully about who in your customer base might be likely to leave. Don’t do it en masse; do it on a targeted basis,” says Iyengar in the interview. Read the whole interview here .