At one time or another we have all have been offered, encouraged or even forced into buying discounted packages. Because laser tattoo removal requires multiple sessions, buying a discounted package probably makes sense. After all, you know you will need several sessions so why not buy in bulk and save?. Better yet, you can finance it and have low monthly payments. So why not?
There is a very dark side of packages. Packages are highly addictive for both businesses and customers. Even good people and big companies can become addicted to package deals We call that the “Package Trap” and its highly addictive.
Somehow our guard goes down when we trust offers from well-known companies. Most of us don’t buy from unknown sellers because we don’t trust them. However, even well-known companies with big marketing budgets will sell multi treatment or even unlimited packages to super charge sales, generate cashflow and fuel growth. By doing that they tend to become addicts, fall in the Package Trap and become de-facto Ponzi /Pyramid schemes. What?
In the Package Trap new package sales subsidize the existing packages which are no longer generating revenue. Now the business has crammed schedules with all the operating cost and no revenue. Thats unsustainable unless, of course, they sell more packages. That’s the Package Trap that even big companies can fall into. So they market furiously to sell more packages and keep the Ponzi /Pyramid going. It can’t go on forever.
The Package Trap also has other unintended negative effects, namely degraded quality, poor customer service and staff morale. The sales staff is compensated in wage + commission so they do very well from selling customers Package deals. Once the package is sold and the commission is paid, all treatments are done by laser Technicians. Treatment quality is 80% is the technician and 20% in the laser. Experienced laser tech’s typical income should typically be 60% wages and 40%. tips. and some get commissions. But people using packages don’t pay for a session and are unlikely to tip the tech and no revenue means no commission. So, the tech’s income decreases. The tech is working harder for less pay…so she leaves and treatment quality decreases. Lastly, the departure hurts morale. Now you have a cramped schedule with non-revenues customers who are not getting results and it’s harder to make an appointment. The staff is demoralized and revenues are down. The solution? More marketing and sell more packages. Unfortunately, more packages just makes everything worse. But wait, there’s more…
Maybe you buy a package with low monthly payments. Did you know you are typically borrowing the money from a bank? Did you know that the bank pays the vendor the entire amount financed less a fee? You now have a loan and those low monthly payments go the bank. You can’t get a refund. it’s your loan, your obligation. You are on the hook even if the seller doesn’t deliver for any reason. Your financed package can even be worth less than zero because you still have a bank loan and you still will make payments. Even If you didn’t take the finance option, your money is gone forever. But there’s more….
So, you’re thinking, I will avoid the trap and only buy packages from larger established companies. Well, even the best and biggest companies have fallen into the Package Trap. There have been many big and well- known laser treatment companies who used package cash to quickly open more stores. Others use packages to fund losses from existing package obligation stores. Many of these companies had spectacular growth and equally spectacular collapses. DR Tat-off. forced clients to buy packages right up to the time they filed for chapter 7. Clients received no refunds packages were worthless. That same person is doing it again with a large chain.
Many very good, big and fast-growing companies have had good intentions but fell into the package trap. They tend to expert marketers and spend heavily to feed the Ponzi. Ultimately, the Ponzi/Pyramids spectacularly implode leaving the customers pay the price.
Early on, our customers demanded multi-treatment packages. Revenues boomed. We soon saw the danger to both us and our customers. We saw the carnage that the “Package Addiction” could bring. We stopped and avoided the trap. But some do not appreciate the danger. This is not to say that all packages are bad. Some are good deals for both the customer and the business. Just be careful. Don’t fall into the Package trap.
Cheers and Caveat Emptor.