Cut your price? Never! (Hardly ever)

The market for your product is soft, and your competitors are offering special deals on price, chasing the available dollars. You’re losing sales, because customers are buying on the basis of price alone. Your loyal customers, bless ’em, are staying with you so far, but if things keep on this way, there just might not be enough of them to support your business.

What to do? Are you really going to cut your  list prices?

A temporary move

The best answer, in many cases, is no. It’s easy to cut your list prices, but tough to get them back up again to where they’re truly profitable. Much better, in many cases, to lower them — if you have to — temporarily, with a special offer. That is, offer a discount off of the list price, but the list price itself stays intact. When your special offer is over, you go back to selling at regular list.

It’s a way to counter your competition’s discount deals, and perhaps get new prospects to sample your product, without reducing your profit permanently.

Don’t be predictable

But be careful. Too many special offers, and your customers become accustomed to them. Result: they don’t buy at list, but wait for your next special offer. And by sensitizing them to price, you just might drive them to your competitors’ special offers. If you start battling with your competitors via special offers, you can erode the markets so significantly that none of you will make a decent profit.

Positioning your product and/or service as top quality — and proving it — may help you make your rate card prices more acceptable, and keep you out of the discount wars. “Yes, our product costs a little more:  Let me show you why it’s worth the difference.”

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