If your sales are off, you may feel that cutting your prices will bring your bottom line back where it should be. For many managers, that’s the first “fix” that comes to mind.
The fact is, price-cutting often does not increase sales.
True, you may have to cut prices to meet competition, if what you sell is especially price-sensitive. But it’s a mistake to cut prices unless you have good reason to believe it’ll be a profitable move. Don’t start cutting unless you have to. Competing on price is risky, because smaller profit margins can be dangerous to your financial health.
Instead, look for ways to persuade your customers that they get something extra when they buy from you – better service and better quality. Talk about the special value you provide, not price.