Question

Topic: Strategy

Pricing Service For Newly Acquired Customer Base

Posted by Anonymous on 250 Points
We sell high-end business management software (avg price $15,000) and have 1,000 customers. Support is billed annually and averages $2,500. We are well known for our service. We have recently purchased a competitor's customer base of 750 clients. The clients are used to paying $400 year (software was $799). While we offer response times of mins with phone and live online chat, this newly acquired customer base has been used to very poor support with several days to get a call back.

We acquired the group for (a) potential support revenue at little/no overhead for us, and (b) possible transition for some of the larger accounts, to our software solution.

I would really appreciate your feedback:
1. would you increase support pricing off the bat or wait? how would you introduce higher support prices?

2. How do we know what pricing they can bear?

3. how do we prevent losing them to a competing low-end product (we have an aggressive competitor at their price point)
4. how do you identify easily who is a good candidate for our more expensive business management solution?

5. is there a way to easily and clearly show them that they are getting more value/better support with us?

thank you so much!!!! this is a very exciting but a daunting project for us.

regards
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RESPONSES

  • Posted by Frank Hurtte on Member
    i really like the approach that many companies are impliementing...
    While the low end customer is on hold, he hears a message saying.."wait time for our regular service customers is now 120 minutes, wait time for premium service is 3 minutes. If you would like to upgrade your service plan, please press 1."
    This lets the customer make the decision while the value of their time is still fresh in their mind.

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