Tuesday, October 07, 2008

Recession Pricing

Let's face it - times are getting tougher. If we're not in a full-blown recession now - we're on the brink of another nuclear winter - much like the dot com meltdown of 2000.

With credit being tight - and billions in market cap being wiped out by the minute - everyone immediately turns to the place where they perceive they can make the "easiest" cut - their prices. But this is a lazy, knee-jerk reaction at best - and at worst it could kill your business.

A couple of weeks ago Brenda Duncan wrote an interesting article about Pricing In A Recession. She makes my point exactly:
Pricing theory (and in real life!) states that the price of a good or service sends a message to the consumer - about the quality or value or a product. Think about it - do you want to be a “cheap date” or a good date?
Personally, I'd rather be a good date, than a cheap one - and I think my customers would, too (ok, so SOME of them may prefer a cheap date - but that's a subject for another posting). The key to pricing in a recession (or depression - depending on your bullsh*t meter) is the same as it is in good times - those that provide VALUE to the customer will get their business and their dollars. Those that don't, won't.

It's really not rocket science - but it IS a critical issue to every business owner (and consumer) out there. How you handle your pricing and the demonstration of the value that you provide are critical in times like these.

Now is not the time to be shy. If you have success stories (and you should), articles in the press (and you should), customer quotes (and you should) - now is the time to put them front and center in your marketing materials, email signatures and website.

You want to remind people of the value that you're providing - and the fact that your pricing justifies the value you provide. Then you have people who are also verifying that - and you have a much better case when it comes to the "...I love your product (or service) now if we could only do something about the price..." portion of the sales process.

Do yourself and your business a favor - and take a look at your pricing model(s) - and just verify that you're offering the best possible value for the money. If you are - you have a much better chance of survival. If you just keep going on a "business as usual" track - you may not be around to make adjustments later.

No comments:

Web Analytics