The following post was originally published in September 2009.
Not so long ago, I had the opportunity to lead the strategic growth agenda for a diversified weight loss and nutrition company. A franchised retail health business, the company had experienced tremendous start-up growth before hitting an inevitable sales plateau. Despite an industry-leading weight loss ‘success rate’ and a best-in-class customer satisfaction score, the business was struggling to gain new customers at its prior growth rates.
Research pointed, in part, to the cost of the program as a key issue. Deeper analysis however, indicated the problem to be the ‘perceived’ high cost of the program – a result of an extraordinarily complex pricing presentation. We saw an opportunity to simplify the pricing structure and to rebrand some of the components of the offering as a means to create new ‘value cues’ in the proposition.
The streamlined pricing approach was immediately embraced by franchisees and their staff. Why? Combined with new visual selling materials, store staff became more confident selling the program, with less anxiety about having to handle objections of the program being too costly. In the first 2 months of testing, customer take-up rates increased 15%.
The Bottom Line
If your pricing model requires a university degree in advanced mathematics for your staff to present or for your customer to understand, you may be missing out on valuable revenue. Cut the fat by simplifying your revenue formula. If you’d like assistance with price simplification and customer retention strategies for your business, contact us today.