Apparently our country is in, what experts call, "a recession." "Times are tough out there," is the message I continue to hear over and over. Whether it's a $5 footlong, a coupon frenzy, a "sale," or, God forbid, a going out a business closeout, we're constantly reminded, as consumers, that people are hurting. The conversation seems very price heavy out there. My question is, is that the message companies should be communicating?I recently had a conversation with an associate I work with about our prices. This person brought up the recession, people losing jobs, the competition offering discounts, etc., etc. as reasons we were unable to achieve more sales. As I reflected on the comments, I admitted that our product needed to have a "competitive" price. That was the only thing I conceded when it came to discussing price. However, what does competitive really mean anyway? Is the price of a Toyota Camry competitive to a Ford Taurus? Is the price of an Apple iPod competitive to a Sansa? I believe we could make an argument that the prices are relatively competitive. Many understand why a premium is associated with Toyota or Apple, but they still may compare their products to other brands. When I was in the car business people would compare all sorts of brands to Lexus. One time a guy compared a Hyundai Santa Fe to a Lexus RX 300. Seriously.
My point is, your price is competitive or relevant to the individual customer. They will buy at a price they can justify a value for. If your product or service is not achieving the price you or your sales team believes it should, then is it a price issue or a product and experience value issue in the customer's eyes? That's where I'm going with this. I don't see Apple reducing the prices of iPods, and I still see Toyota getting a premium over Ford. Why is this, and why don't more businesses choose to differentiate themselves enough from their competition to achieve this? Even small businesses like dry cleaners and restaurants have opportunities to differentiate and really stand out from their competition. And having a better coupon or price is rarely that differentiator.
The next time your marketing team sits down to discuss the next big coupon or discount program, I encourage you to ask yourself why. Why must you feel compelled to offer a coupon or discount? Are you selling iPods or MP3 Players? Are you just a box with a price, or do you offer something more? Coupons and discounts are knee jerk reactions in an attempt to increase sales, do it enough and those knees might just give out.
Just another one of my opinion rants. Enjoy your day.
