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is on the way. Lock in the people who see your product being offered now.
Key point... penetration pricing only makes sense if you keep those customers.
There must be a strategy in place to realize that lifetime value.
Here’s a quick primer on how to convert “first-time” to “life-time.” Feel free to mix
and match...
1) Stickiness -- this is customer loyalty with a twist. Once someone buys from
you, does it quickly become too costly for her to switch to a competitor? (high
‘switching costs’). The costlier it is to switch...
... the stickier is your product.
Offline example -- Shaver handles used to be expensive. And they only fit a
certain brand of blade. The cost of switching to another brand was the cost of
buying another expensive handle, so customers had to continue to buy
expensive refills. Hence that old phrase... the “razor-and-blade” strategy.
Order now -> http://myps.sitesell.com/
Make Your Price Sell!
2 3
Online example -- Consider free Web site hosts like Geocities. Once you
build a site, it becomes tough to move it elsewhere. Also, the amazingly cheap
online brokers are remarkably “sticky” -- it takes a while to learn a system and
set everything up. Once you do that, you don’t want the hassle of switching.
2) Great product -- an outstanding product guarantees the customer’s return.
You know that she’ll be back!
Offline example -- Shaving companies realized that they could make much
more money, in the long run, from the resale of razor blades than from the
handles. They started to sell the blades at give-away prices. The customers got
used to a good shave with relatively inexpensive blades and just kept on buying
those profitable refills. Hence that old phrase... the “razor-and-blade” strategy.
Online example -- Good books and good prices are a winning combo.