Pricing in a Recession
3rd April, 2009
With the constant news of recession doom and gloom comes the panic cry of "we need to sell more". To do this the obvious answer is slash your prices but is this the right approach?
The price is supposed to reflect the value of your product so a massive discount now can only serve to annoy loyal customers who have always bought at the higher price as well as cheapening how your product is perceived.
Don't worry, there are some other ways you can keep your customers:
- Use incentives or add value with free delivery, extended warranty or easy payment options. These might affect your costs but they stop you having to compete on price.
- Earn customer trust by being the best. Yes you could lower your price but if you offer personal service, always deliver on time and have the most reliable product then you can justify maintaining our prices.
- Don't get sucked in to a price war. If your competitor is slashing prices think carefully before you respond, can you really afford to price match or beat them?
- Don't be ex-directory. Shout about the value you add through increased marketing activity and explain your offering. You could have the best widgets but if nobody knows about it then they won't buy from you.
- Think about what your customers are buying and not about what you are selling and innovate if you have to. If you are selling cars why not include a servicing package that makes it more economical for your customer in the long run.
- Communicate with your customers and remind them why they buy from you........because you're the best and not neccessarily the cheapest.