In a wobbly economy you might decide customers want cheaper prices. However cutting your prices might be the worst thing you can do. It says panic, not confidence, and you want to be instilling confidence in your customers where ever you can.
Just because customers are belt-tightening doesn’t mean they want to buy cheap stuff. That’s why luxury goods often thrive in a depressed economy. Your customers will be looking for quality… and quality is never cheap.
So what does your customer really want? That’s what you have to know, and if you don’t know (then you must find out). Incidentally if you don’t know, you will probably be losing customers, so if you don’t know, ask them before your competition does.
Here are some of the things you can be sure they do want…
- They want to make more sales
- They want greater productivity from their employees/staff
- They want more profit
- They want a better image
- They want more customers (helps to achieve bullet 1)
- They want to create better morale, or to experience better morale
- They want more free time
- They want recognition
Your job is to work out how you can get one or more of these things for your customer. If you can do that, price is going to be much less of an issue. It can even be irrelevant. Because you’ll be providing value. And to your customer all that matters is perceived value.
Note I’ve not mentioned your product. Don’t let it get in the way. Focus on what your customer wants. While some people will always look for the lowest price, a good percentage will buy value if you provide it – convincingly.
But there’s another reason why it’s not very bright to sell low (unless you want to be seen as a commodity). Simply, if you slash prices you slash profit. It comes right off your bottom line. No profit means you can’t re-invest in your business and in fact may even go out of business because it will impact your ability to survive.
Don’t slash your prices.
Figure out how you’ll get your customers what they want.
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