Pricing in Tough Times
Common wisdom says that, when in a recessionary environment, to price products and services more affordably. Sure, it shreds your margins but it keeps the cash flow flowing.? And that same wisdom points to companies and competitors slashing prices so it must make sense, right?
Not so fast, says Jose Mendoza.
In his article: Premium Brands and the Recession, and in several follow-up conversations I’ve had with Jose, he shares that some companies are growing their sales and their margins during the recession by:
1)? “Stepping-up.”? Producing a premium-level offering to attract customers trading-down from a more expensive brand or provider.
2)? Differentiating with unique benefits for the buyer (this is where you wanna think “Sales Communications”).
3)? Adding product line extensions such as smaller versions of products with corresponding smaller prices. This strategy keeps the buyer loyal to your brand while maintaining your margins.
Jose points to Volkswagen, Blackberry and Victorinox as companies who’ve used these strategies to great success. Service providers can similarly grow their revenues.
Will your company succeed by using these strategies? Will it even try?
To find out if these strategies can work for your organization, sign-up for a 60-minute “Discovery Session” with Roland Jackman, today