If you’re Still Marketing Membership Clubs as Upsells, Perhaps You’re Not Interested in The Lifetime Value of Your Customer!Posted by Ray Golden August 25th, 2010
Let’s face it, the reason why Membership Clubs sell as upsells in telemarketing calling scripts is because they prey on the consumer’s weakness of accepting that the deal is too good to be true. “Wow, you mean I can try this unbelievable deal for a full 30 days,… I can use it all I want and if I cancel, I won’t have to pay a dime……I’m in!”
The truth of the matter is that of those poor souls that buy in, many space off the 30 days and end up being charged and thus disgruntled when they end up being charged. Who do you think they are most disgruntled with? Perhaps with the primary initial product marketer.
With these negative option clubs, it is the so-called, “breakage” model that makes them highly profitable. Everybody wins except the consumer, right? I don’t think so. The net result is that disgruntled customers actually end up blaming the product marketer for selling it to them in the first place….which not only increases overall return rates of the primary product, but leaves a bad taste in the consumers mouths for ever wanting to do business with you or call on another TV product again. Thus, the whole industry has begun to suffer. Why else have call in response rates dropped so dramatically. Surely the ease of the Internet has had a certain affect for loss of call in traffic, but 3rd party upsells have also been regulated severely due to their nature on the Web. So in actuality everybody loses except the “club” companies.
Enough consumers have complained about this that the FTC has become involved and acted on further law, (Roosevelt), that has caused conversions to these “clubs” to be even more reduced. Furthermore, the credit card companies have become involved and are enforcing their requirement to gain a re-read of all the credit card #’s a second time for 3rd party offers. These two facts have caused a dramatic overall reduction in conversion to these “clubs”. Of course, none of this would have ever happened if the deals were truly of value from the consumer’s perspective. There wouldn’t have been massive consumer complaints about such.
Here’s a thought, if clubs were so good, why not let people try the clubs for 30 days and only if they call to actually purchase it after the trial, do they keep on being able to use the club. I won’t bet on that one ever flying. No club is willing to offer such because very few would buy in!
Here’s another thought. A better way is to upsell consumers on legitimate products is by cross-pitching them over to relevant, but non-competitive other products. How do you find those relevant other products? Go to Sales Portal. A web based marketplace that brings product marketers together for the purposes of buying and or selling end of call transfers. To see a demo on how their platform works, go to www.salesportal.com and click on their 3 min. video. Best of all, it’s absolutely free to register your products on their web site. Who knows, there might be some perfect matched pairs just waiting for you to join. If not, be patient, others will find you and your product.