Growth October 6, 2020

Tip: Increase LTV by discounting customers who are experiencing financial hardship

Growth Bites @growthbites

Kindness is more important than ever these days. And it can be financially advantageous too. Offer customers who are facing financial hardship a generous discount, and reap the rewards once they've recovered.

When customers are facing budget constraints, they will drop unnecessary expenses and find out what's really important to them. Interestingly, a recent study found that once they're flush again, they won't return to the products and services that they dropped. Instead, they'll spend more on what they continued using. In other words, if they stay with you, they may actually buy more from you than they did before the downturn. But what if your product isn't a necessity? You can be grouped with the need-to-haves by offering a temporary discount that is so significant that they keep you around anyway. Be on the lookout for signs of budget cuts, be proactive if you see them, and consider addressing this in your cancellation flow.

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