The Price is Right

By Ben Carcio

When sales slump, slashing prices is the best way to spark sales and boost profits, right? Well maybe not, according to "Hold the Line on Price," an article that Rosalind Resnick wrote for The Washington Post. Ms. Resnick is author of Beating Bailout Blues: How to Stay Sane When the Markets Are Driving You Crazy. She makes a powerful argument for thinking hard before you change your prices – no matter what you sell.

Let me summarize a few of Ms. Resnick’s excellent points about pricing in the current climate:

1. Stay steady with pricing. If you cut prices too often and with no strategy, you are training your customer not to buy, but to wait to see if you will cut them even more.
2. Don’t forget value. It is more important than price – something that great retailers never forget.
3. Focus on great service. It can boost sales faster than price-chopping, and it doesn’t cut as deeply into your bottom line.
4. Find ways to save money by boosting efficiency in other areas. You could eliminate delivery middlemen, for example, or reduce your inventory and have your vendors ship to customers for you. Price is not the only answer.

So before you race out onto your floor and start cutting prices, stop to consider the possible downside. Ms. Resnick’s excellent insights are a good place to start.

Comments

[N.Jonathan Christopher]

There may be situations when the points mentioned above are valid and price cut is not a wise decision. But sometimes it appears (price-cut) inevitable due to stiff competition from other vendors.
-Jonathan
http://www.p2w2.com/jonathan