Here is an example of a practice that can either lead to added sales or backfire and hurt your business.
First you offer a service and either provide a no cost upgrade for one year, or provide an automatic renewal after the first year (at full price). At the end of the first year you bill the customer for the second year at the new rate. The customer may simply appreciate the service and pay the incremental cost. On the other hand the reaction may be very different, leading to an irate customer and possibly a lost customer that will talk up the negative issue.
One thing that can help is to make the cancellation as painless as possible. Maybe you can cut the added service out but keep the primary business and look to sell up later.
In one case a customer waited over 30 minutes on the phone to resolve the issue, during which time he decided to cancel the entire business with the firm. He may have simply cancelled the added service if the wait time had been reasonable.
The choice is yours.
Steve Koenig, SCORE Counselor
Visit us at: www.scoresouthflorida.net