Pricing Case Study: Pricing Promotions Gone Wrong
I just had the worst pricing experience with Ring. Let's use it as a case study.
I am a SimpliSafe customer, and have been for almost 2 years now. Since then, Amazon did a great job in acquiring Ring and expanding their offering, inclusive of a steal of annual monitoring for $100 versus the roughly $300 I pay to SimpliSafe.
I went to Ring's website about 30 minutes ago, saw that they had a Fall Sale where I could buy a bundle that would replace my SimpliSafe equipment for $200 (a $300 value), and thought hey - after 1 year, I break even, then save $200/year until I need to upgrade equipment. I can also sell my current SimpliSafe equipment and possibly break even way sooner.
Here's where things went left - I added the $200 package to my cart, went to my cart to check out, and it was showing back at $300. I immediately screenshot the sales page and my cart, opened a chat with their support, and asked what was wrong and how to fix it.
They asked me to try a new browser. I opened a new one, but that bundle was now missing from the page.
I told Ring, and they said 'Oh, that item was only for yesterday so we just took it down.' I said ok, but can I get it since clearly I added it before it was down? I just sent you the screenshot with date and time, so you see it clearly was just working.
Their answer?
No. Once the sale is down, that's it. They wanted me to move communication channels from online chat to calling a sales line, but said sales wouldn't honor it, but I could try.
My response?
You're going to lose a customer lifetime value (CLV) of at least $1,000 over a $100 sale expiring incorrectly - your fault, not the consumers.
As a customer, I just spent $100 on a Ring doorbell (now being returned as I stick with SimpliSafe), $200 for this bundle, and I would spend more than $200 in more equipment as I want to upgrade some other items in 2021. I'd also spend at least $500 on their annual subscription ($100/year, and I'm sure their customer retention is 3-5 years).
What's the lesson you can learn? Do not give it all away - have a wise pricing plan. But:
Have proper pricing operations to open and close promotions as necessary, and
If you mess up your pricing promotions, honor your mistake. If it really is going to kill your business, then you shouldn't have even offered that promotion to begin with.
If any further updates come, I'll share them, but when I have a real-time pricing case study I can share, I'm always going to do that.
