Loyalty Truth

I recently called my TV-service provider and a funny thing happened. The company, which has never wasted an opportunity to try and upsell me at every point of contact, actually tried to “downsell” me. Here’s what took place:

I realized that a special 50%-off deal on my HBO package was about to expire. So I called thinking I would need to “retire” my HBO channels for a month or two, until I could again qualify for a discounted offer. I kicked off the conversation noting that “my monthly bill is too high already” and the customer rep did two things.

1. She agreed to extend my 50%-off deal—on the spot.
2. She reviewed my TV channel package and mentioned she might be able to save me a few dollars if I downgraded to a bundle with less channels.

I stayed pat with my channel package, glad that my HBO price wasn’t going up, but my overall impression was—how refreshing. There was no attempt to sell me additional premium channels or an Internet speed upgrade. It actually seemed like the company was looking out for my best interests, instead of trying to squeeze a few more dollars out of me.

It got me thinking: In CRM and customer loyalty, we’ve long been programmed to try and increase the value of each customer by upselling. But, in at least some cases, might it be a better approach to skip the upsell and show the customer a little TLC to help ensure they remain loyal customers?

Another company that’s jumped into the “downsell” game is a long-time favorite of mine, the Patagonia outdoor clothing and gear retailer. A recent e-mail I received from the company promoted its “Spring 2015 Well Worn Tour” and it had nothing to do with its new spring line of clothing. Here’s the pitch:

To change our relationship with stuff, this spring Patagonia’s biodiesel repair wagon will travel coast to coast repairing clothing for free, teaching folks how to fix things themselves and selling used Patagonia® clothing. Bring us your tired, well-loved clothing for repair. If you don’t have any, we’ll supply it. Fix it and you can keep it.

When I click through to the site, there’s no attempt to sell me anything. There are links to a “Worn Wear Blog” that features stories and pictures on customers and their well-used Patagonia gear, as well as a link to “iFixit” manuals that show you how to fix holes or tears in your Patagonia clothing.

All in all, this strikes me as a brilliant approach to customer retention. It backs up the company’s brand story by showing they “walk the walk” and really care about environmental waste, while also reinforcing the idea that their stuff lasts forever. I’m sold and they didn’t try to sell me a thing.

There’s a related story from the raconteurs over at Trendwatching, who have identified “sympathetic pricing” as a trend to watch for in 2015. It’s described as a discount that “relieves pain points, offers a helping hand in difficult times, or supports a shared value”. Again, it’s an attempt to make a connection with a customer by giving them a price break in order to ensure their continued loyalty.

One such example of sympathetic pricing surfaced at the Noosa Resort in Australia, located on the country’s “Sunshine Coast”. Last year the resort offered guests a unique “Rainy Weather Rebate”—a 20% discount if it rained more than 5mm during their stay. So even if guests had a rainy visit, they could still leave with the warm glow of having a few extra dollars in their wallet.

In some instances, might a “downsell” be a better way to earn a customer’s trust and ensure their long-term loyalty? Would this approach work for your company, brand or clients?