Kick-start your Growth Marketing Strategy – Falling Foul of Price Reduction
Falling Foul of Price Reduction
At first it seems the obvious strategy: when times are hard, cut back on your prices and offer clients cost-effective appeals. The assumption is then that by cutting prices, volume will naturally increase. However this is not always the case.
You see by adopting a price reducing strategy, you enter very choppy waters, because you are then chasing volume and not value. Consequently by reducing your prices, you then have to generate an even greater volume of sales to compensate for the reduced margins you now face.
So, don’t be tempted to cut your prices: this not only devalues your product or service, but also sends out the wrong message.
When times are tough, what do we ultimately want? I believe it’s this: reassurance. The media is constantly and continuously full of doom and gloom and so as a consequence people want to limit risk, people want assurance. Essentially your clients do not want to make mistakes – especially – in an economic downturn, and with potentially a limited budget.
Your clients want value, results – and to reduce their risk.
So think carefully: how you can demonstrate or convey this? How could you reduce the risk to the client of purchasing your product or service?
Even better, skew your business towards those clients that won’t feel the recession. You might want to use a ‘Credit Crunch’ angle for specific promotional strategies – however – do not use the strategy of cutting prices as your only way out. (Do it this way, and then you’re always chasing volume not value!)
Let me repeat, above all your clients want value, results, and to reduce their risk. If you can demonstrate all three factors, in a compelling and tangible way, then you have a very strong recession-proof strategy.
Andrew Ludlam is a qualified business adviser, marketing consultant and trainer, specialising in helping business owners position themselves as authorities in their field. To discover more, visit Maverick Marketing Consultancy