Understand Your Buyer > How To Keep Your Clients Happy > Retention Discount
What is it?
Retention Discounts are incentives that are used only at the point when a buyer is trying to, or threatening to cancel their relationship with you.
Why does it work?
It works to retain some buyers who will take the deal and be happy, but others may resent you for charging full price until they threaten to leave. As such, using this strategy is a personal choice and one that may not be suitable for all businesses as it can sometimes cause more reputational harm as buyers think “if they can offer an immediate discount to stay, then why are we paying the higher price in the first place? It just feels like they are taking advantage.”
How can you use it?
This works for ongoing business models where you have a subscription or longer term arrangement. Essentially you have a discount available (a bit like a follow up offer – something attractive and appropriate) which can be used in the event of an attempted cancellation. Whilst it will retain some buyers, it may only serve to solidify the decision of those who decide to leave you..
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