Impact of Deep Price Discounting

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Dear Mathnasium Franchisees,

We understand the value of consumer offers and support efforts to attract new customers through price discounts, e.g. breaks on assessments and registration fees. However, we want to urge you to be mindful of the impact that deep discounting of your service has on long-term business health:

First, research supports that the perceived consumer value of a product is a function of its price. A deeply discounted price for enrollment, even if it’s temporary, dilutes the long-term value of your service within the target community.

Secondly, deep-discounting tends to attract opportunistic customers seeking a “deal.” They may be less likely to stay beyond the terms of the discount, less impacted by their experience, and less likely to refer your program to friends.

Finally, at Mathnasium we are all stewards of a powerful global brand with value beyond territory and city boundaries. What you do in your community has an impact felt everywhere, and your market will feel the effects of what your fellow franchisees do elsewhere.  Much of the power behind our brand lies in the consistency of our education and our consumer proposition; which we are all responsible to protect.

Our best-performing centers do not need to devalue their service through deep discounted pricing, which makes us believe that no center should. If you do choose to engage in a reasonable limited-time discount program, you MUST be extremely clear in any marketing efforts (including on third-party vendor sites like Groupon) that the offer is only good at YOUR location. Furthermore, you must opt out of any integrated marketing run by Groupon or similar sites on your behalf leading to your offer if they cannot restrict their marketing efforts to your territory (this does not include searches DIRECTLY WITHIN a site like Groupon, but refers to exterior channels like paid search). Please contact your FBC if you see ads from other centers running in your territory.

Best regards,

The Mathnasium Marketing Department

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