In times of economic depression, when few customers are around, it’s easy to turn to price management to encourage customers to come back. But price management has little track record on managing customer buy-in, or in developing sales volume.
In reality, customers always buy into attractiveness. iPhones, Jaguars, Disneyland, are all expensive, but attractive and highly popular: it doesn’t matter that there are cheaper, and perhaps better, alternatives that could do just as well. It’s the attractiveness that counts.
But how did they become attractive? Undoubtedly, huge marketing budgets come to play. But, if so, where did they huge marketing budgets come from?
The reality is that these items are all sold on communication. It always comes down to the way a product or service is presented to the community, and to the correct community. And presentation and communication don’t have to be expensive. In fact, there are plenty of examples of hugely budgeted presentations that have flopped: money isn’t everything.
It’s well recognised that if you have a 30% gross profit, then a 10% price reduction means you have got to sell 50% more units to maintain revenue income. Conversely, a 10% price increase means you can allow sales to fall to 25% to maintain your income. So what do you do? It’s clearly fraught with potential errors.
We propose you consider the way you sell. Economic downturns mean that presentations and pitches need to be well polished, and there is less room for clumsy effort.
Contact Chalestra for help in bringing your pitches to the frontline.