« Know thy customer and care enough | Home | Three Tips for Generating Referrals »
Slash your price and lose loyalty
By Natasha | October 8, 2007
Warning: Be Careful with Discount Pricing
Companies use discount pricing for many reasons: To stimulate short-term sales; to match a competitor’s price reductions; to get high-traffic display space at a major retailer.
But before you slash your price, consider the impact this could have on customer loyalty.
Why? If a customer is more loyal to price than to your brand, your brand is vulnerable to pricing moves by your competition, and you may be forced to cut your price—and your margins—in order to maintain your market position. What are the alternatives?
- Offer a bonus pack. Use creative packaging to demonstrate the additional benefit the consumer is receiving.
- Offer a free premium like McDonald’s does with the Happy Meal.
- Offer a purchase with purchase. “Buy a designer label fragrance at the regular price, and get a $59 silk scarf for just $9 more.”
- Offer a free month of services for a yearly contract.
There are many ways to earn customer loyalty and increase sales. Discount pricing is but one, and it can backfire in the long term.
Source: Excerpt - MarketingProfs “Get to the Point”
Comments
You must be logged in to post a comment.