Sometimes sales slow down. Maybe sales have slowed down for a while and you start getting concerned. In our state of concern, or sometimes even fear the first thing we think of is having a sale. Or maybe even lowering your prices on a more permanent basis.
Logically it makes sense. If we lower our prices, then people will be able to afford our products or services easier. so then we will make more sales and therefore more money. So we will be back up where we were before the slump.
But then what? What happens the next time there is a slump. Or the next time a new retail location opens up in your area and your business drops a bit. Then what? Are you going to have another sale? Or drop your prices again?
How long can you keep doing that and still make a profit? How many times can you drop your prices to keep up with the changes, before you are low pricing yourself right out of business?
If you have a sales often enough people will start expecting it. They will wait for it. They will hold off purchasing from you until they know you are going to have a sale. Then they will buy during the sale. So the times in between the sales will become even slower that they were before the vicious cycle started in the first place.
And you don’t want to be known as the cheapest. You will never be able to complete for very long as the cheapest. There will always be someone that can charge less. Maybe they can buy in higher volume than you so they can charge less. Maybe they don’t have a high of expenses so they can charge less. There will always be someone cheaper. And again before you know it you will discount yourself out of business.
I am not saying you can never have a sale. Just be very careful Have a good, valid reason. An explanation for the time frame. A reason for the amount of the discount. And make sure you are not doing it on a predictable schedule. Having a sale for 2 weeks before Christmas each year only means people will wait until then each year to buy.
Another, much more effective way to interest your potential clients is to add more value. Do you currently have a 30 day warranty? Change it to 60 days. Do you currently offer 30 days email support after purchase? Make it 30 days unlimited phone support. Do you currently offer a product? Offer training on how to use the product. Do you offer something that needs to be set up or picked up? Add in delivery and setup. All without changing your price.
Make what the client is getting for the price worth more. Then you will not have to drop your prices to make the sale. And you will stand out above the competition.
Or make it more exclusive to purchase from you. Members only. Look at CostCo. Sometimes what they have is cheaper. But most of the things in the store are not actually cheaper than the local supermarket. But I have to have a membership just to get in the door. It feels special. I have the membership, so I want to use it. Can you do something like that with your business?
Maybe open one day a week earlier for V.I.P. clients. Or hold special events where you bring in complementary vendors. If you are a restaurant, offer V.I.P.’s a special night each month to come in and learn how to make one of the dishes on your menu.
There are hundreds of ways to add additional value to what you are already offering. And many of them will cost you very little in additional funds. If you plan it correctly the additional value will be less in cost to you than the difference in funds you would have lost had you discounted your prices and sold your product for less.
Stop discounting your prices and start adding value. You will be happier and so will your clients. They will get more for their dollar and you will get more dollars in return. It is a win-win for everyone.