Last year, the company realized that it was promoting its products incorrectly. Instead of advertising the least-expensive offer, it led with the most expensive. The company is a community pool, and I have been a board member for the last eight years, president for the last five, with advertising and public relations as one of my principal duties. The product, seasonal memberships, features categories such as family, individual and seniors.
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For years, the emphasis was on selling family memberships, the most expensive plan. This worked when women could visit the pool daily with their children. But the large number of women moving into the work force undermined this category and families increasingly believed they were likely to attend only on the weekends and they would get less for their money. Membership dropped dangerously.
With discounts, we turned this around. But structuring these offers was always a challenge. At first, we offered 20 percent, and later 15 percent off, for early-bird signups. But applying percentages to the rates forced prospects (and our money takers) to face mathematics calculations — It was too much work. We began promoting the introductory rates in dollars instead.
Last year, after the early-bird offer expired, we struggled to phrase the remaining ads. As a last resort, I decided to highlight the single membership of $175 in our ads—cheap, as Mad magazine would say.
Things changed. Individuals began signing up, and where new members rarely signed up after July 4, we had a steady stream. We even had individuals joining in August, which was previously unheard of.
We had been promoting our most expensive membership. Now, we were leading with our lowest, a rate which made joining late affordable.
The episode is a lesson in how changing conditions require businesses to respond. That requires getting inside the customer’s head. We had told ourselves that a seasonal family membership was cheaper than a weekend at the shore. But many families, who feared attending only a few weekends because of weather and other plans, saw it as expensive.
This is not an unusual experience. Conditions change and what once worked, no longer does. And even though the individual price had always been available, many didn’t notice it because it wasn’t promoted.
We didn’t anticipate the impact of this change. But after we saw the results, we acted on the opportunity.
And above all, the lesson was that, just as teaser rates work in finance, the best price to advertise is not the most-expensive offer. Because if you get people in the door, they may decide to spend more. But if they don’t come in, you don’t get anything.
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