Marketing fail: Why discounts drive away existing customers

Another email with "70% discount - only for a short time!" in the subject line. I open it, read the conditions and think to myself: Great, another promotion that I, as an existing customer, don't benefit from. For years I have been using the services of a service provider that specializes in agencies. Their services are good, the support works - but their marketing? It works suboptimally.

Sometimes these discount bombs land in my inbox several times a month. Webinar vouchers, annual discounts, special conditions - all just for new customers. As a loyal existing customer, I look down the tube and ask myself: Am I actually still welcome here?

The problem is not new, but it is getting worse. Companies are chasing after new customers and forgetting their most loyal supporters in the process. This trap also lurks in the TYPO3 industry - with hosting providers, extension developers and training providers. The mistake is always the same: they treat all customers the same, even though they are definitely not.

I'll now explain why this is not only annoying, but also downright stupid, and how you can do better in your agency.

The problem from the perspective of existing customers

Let's take an example: Imagine you've been a customer of a TYPO3 hosting provider for three years. You pay on time, cause no stress in support and even recommend the provider to others. Then you receive an email: "New customer promotion: 50% discount on all packages for the first year!"

How do you feel? Fooled. Exactly.

Existing customers quickly develop the feeling that they are the stupid ones. While newcomers are lured in with discounts, the loyal ones pay full price. It's like in a restaurant where the regular customer at the next table sees the new guest getting a welcome drink. Bitter.

This breach of trust goes deeper than many companies think. Customers ask themselves: "If they can get new customers so much cheaper, what does that mean for my prices?" The authenticity of the company is suddenly called into question. Are the regular prices inflated? Have I been an idiot paying too much all these years?

In the TYPO3 world, this is particularly tricky. If an extension developer discounts their premium support for new customers, the long-time user thinks: "Why can't I get better conditions for my loyalty?" The result: they look around for alternatives. And there are plenty of them in our small market.

The worst part? Customers are talking about it. In forums, on social media, at meetups. What was meant to be a clever marketing campaign can damage your reputation.

Why does this happen at all?

Most companies don't make this mistake out of malice, but out of sloppiness. The CRM is poorly configured, the newsletter segmentation does not exist and nobody thinks about the fact that existing customers also read the marketing emails.

The most common reason is the lack of separation between different customer groups. Everyone ends up in the same newsletter mailing list and receives the same offers. The marketing tool spits out the promotion, someone presses "Send" - and that's it. The fact that 500 existing customers also receive the message is only noticed when the first complaints come in.

Strategically, this is even more stupid. Many managers think: "New customers bring in new money, existing customers pay anyway." This short-sightedness pays off. Acquiring a new customer often costs many times more than it costs to keep an existing one.

This is particularly unfavorable in the TYPO3 scene. Imagine a specialized hosting provider bombarding its loyal customers with new customer discounts. They think to themselves: "Wait, I've been paying 50 euros a month for two years and new customers get the same package for 25 euros?" The trust is gone. And with us, word gets around quickly - the community is small and well connected.

Even as a freelancer or small agency, you're not automatically safe. You might think: "I know my 20 clients personally, it won't happen to me." That's true - but as soon as you start sending out newsletters or doing online marketing, the same trap lurks. One wrong click in the email tool and your regular customers receive the "new customer welcome" email.

The hidden costs of such campaigns

What looks like clever marketing on the outside costs real money internally. The damage to your reputation is just the tip of the iceberg.

First comes the support costs. Every ill-conceived discount campaign generates inquiries and complaints. "Why don't I get a discount as an existing customer?" - this question then ends up with your employees. They have to invest time in explaining, placating or, in the worst case, granting goodwill. Time that they can't use for productive work.

Then comes the loss of trust. Customers who feel unfairly treated become passive critics. They continue to pay, but they no longer recommend you to others. This is problematic in the TYPO3 community. Recommendations here work via personal contacts - if these are lost, an important sales channel is lost.

Even worse: the most loyal customers are often the most profitable. They buy additional services, book training courses and need little support. If you alienate these customers, you not only lose their turnover, but also their valuable follow-up orders.

The math is simple: one disgruntled existing customer can cost you more than ten new customers will bring you. They talk badly about you, don't recommend you to others and eventually quit. The short-term acquisition of new customers turns into long-term profit destruction.

In our industry, there is also the community factor. TYPO3 developers and agencies know each other. If something goes wrong with one customer, everyone else quickly knows about it. A single frustrated customer can cause quite a stir on Slack, in the forum or at meetups.

How to do it better

The solution is actually simple: treat your customers according to their value to your company. This starts with the technical implementation.

First, you need a clean segmentation in your CRM and newsletter tool. Existing customers belong in a separate list, prospective customers in another. This is not rocket science, but basic equipment. Any reasonably modern marketing software can do this - you just need to set it up.

Then develop separate campaigns for different customer groups. While new customers get an introductory discount, existing customers benefit from loyalty bonuses. This could be an upgrade discount, an additional service at no extra charge or exclusive access to new features.

This is perfect for TYPO3 services: a hosting provider advertises '3 months TYPO3 hosting free for new customers', while its regular customers have been paying 39 euros a month for years. Instead, they could offer existing customers a free staging system or extended backup cycles after 12 months. Or they could get early access to new extensions, free training places or discounts on additional projects.

Communication must be transparent. Tell your customers that they have different benefits as existing customers than new customers. "This offer is for new prospects. As our valued customer, you benefit from our exclusive loyalty benefits." This shows appreciation instead of ignorance.

Technically, you can implement this with newsletter tags and filters. Every customer receives an "existing customer" tag with their first purchase. New customer campaigns only go to contacts without this tag. Simple rule, great effect.

The effort is minimal, the benefit huge. You avoid annoyance, strengthen customer loyalty and show that you have done your homework.

Alternative forms of action

Instead of lumping everyone together, develop different types of campaigns for different target groups. This is not only fairer, but also more effective.

Loyalty programs can work in the TYPO3 industry if they are kept simple. Instead of complicated points systems, offer loyal customers direct benefits: After two years of hosting there is one month free, long-term customers get priority support at no extra charge, or they get exclusive access to beta features. This turns a one-off purchase into a long-term relationship.

Upgrade campaigns are a classic with potential. Instead of discounting the standard package for new customers, offer existing customers a discounted upgrade. "Already using our basic hosting? Try the premium package at the basic price for three months now." This generates more revenue and shows appreciation.

Referral programs pay off twice over. Existing customers receive a reward for every new customer they refer - and you save on acquisition costs. In the TYPO3 community, personal recommendations work best anyway.

Community bonuses are worth their weight in gold in our industry. TYPO3 Association members, core contributors or extension developers receive special conditions. This strengthens the community and rewards commitment.

Staggered promotions show real appreciation. Existing customers get access to new offers two weeks earlier than the rest. This makes them feel privileged instead of disadvantaged. By the time the public promotion starts, the loyal customers have already taken advantage or are happy that they had an advantage.

Conclusion

Customer segmentation is not an optional extra, but a duty. If you treat all customers the same, you are treating them wrong. Existing customers have different needs than prospective customers - and they deserve different offers.

The problem usually lies not in bad intentions, but in poor organization. A sloppily configured CRM and a lack of newsletter segmentation are enough to damage years of customer relationships. The effort required for a clean separation is minimal, the effect maximum.

Time to review your own marketing automation. Take a look at your last campaigns: Who received which emails? Can your loyal customers benefit from the campaigns or are they left out in the cold?

In the TYPO3 community, nothing goes unnoticed - and nothing goes untold.

Make sure that the right stories are told about you.