The burning question in every business owner’s mind this time of year is should I discount and if so when and how much. Under normal economic conditions a good argument can be made for both sides of this discussion. But in tough times like we we face now it’s harder to argue for the side of holding that line. It nearly acknowledges that you are out of touch with consumers.
Because in an extraordinary time like this we are actually resetting prices. Yes, we will be able to raise them again some day, but in my opinion right now we have to pay close attention to what the market can bear. Just look at how WalMart is dominating the early holiday shopping ads with their heartfelt plea to offer low prices.
Face it, if you sell low priced units you are selling less of them or discounting and taking less profit. But most of our clients sell big ticket units and a large majority of you sell leisure and/or vacation oriented units. The plain truth is that consumers who could marginally afford what you offered in the past are “off the list” now. Many who could afford you are now marginal. Yet, still a small percentage are actually doing ok and are able to seize good opportunities to buy cars, homes and leisure time at will when the perceived value is “too good to pass up.” With all of this in mind, you need to spend some time being creative.
What can you offer that is different from the crowd. Right now, it seems like it takes something equal to at least 30% off of your full price. This is not a time to just pay the concept of “discount” momentary lip service and move on. Obviously, the more margin you had to start with the chance you have to still make a reasonable profit. But you also need to look at what a creative discount promotion can do in the long run; create new customers you might never have had.
If you “steal” a long time customer from the competitor down the street through a creative deal that gets people excited and then end up delivering a better product than they got at the other place you sow the seeds for a growing customer base of the future. While out of the scope of our day to day work we do for our clients, we have been marketers since the dawn of time and would be happy to be your sounding board on creative ideas and help you steer through these turbulent times successfully.