Beating a Recession: Don’t Play on Price Alone! January 4, 2009Posted by David Dirks in A New Webinar!, Recession: How to Beat It!, Retailer Store Strategies, Sales Strategy/Tactics, Small Business Advertising.
Tags: advertising, advertising strategy, beat a recession, beating a recession, bundling services, marketing strategy, retail sales, retail strategy, sales growth, sales strategy, Sales Tactics
I recently saw an ad in my local paper from a tire dealer. It was a good sized ad and it had one focus: price. Price as in ‘here’s the old price (crossed-out) and now here’s the new low price’. No doubt, this is a retailer whose sales have gone down to some degree as this economy grinds to a near halt. Competing on price is a typical knee-jerk reaction to slowing sales. It’s also a good way to spend precious money on advertising that will NOT move the sales needle much at all, if any. Trust me, it won’t. Advertising is a good thing and should be done in the face of a recession, despite the urge to cut those costs. However, advertising spending that focuses only on price will only frustrate and cause a business owner to make the mistake of cutting out advertising at the point when they need it the most.
Competing on price, in any economy, is the kiss of death in my book. Here’s why. In a commodity business like the tire business, for example, you can get your tires from many places these days. Cut your prices and I’ll find someone else who either can match it or come pretty dang close. I firmly believe based on experience that the only way to win is to find ways to DIFFERENTIATE yourself from your competition. Is price all you’ve got? Is that it? Yikes. You’re in trouble because everybody can play that game.
Instead of competing on price alone, compete on services or create value added items that your competition doesn’t. For this tire dealer, I’d recommend figuring ways to bundle additional services along with pricing to show the customer the value-added services that come with that pricing. What kind of ‘additional’ services? How about:
- Free tire check ups and rotation
- Free car wash (make a deal with a local car wash and you’ll help both businesses)
- Take an extra X% off your next tire purchase on top of advertised sales prices for returning customers only
- Special customer discounts for automotive parts purchases at a local car part dealer (work a deal out with a local parts retailer and create special coupons just for your customers who purchase tires with you).
- Free gas card for $xx dollars for each purchase?
You get the idea. Bundle as many direct and indirect services as you possibly can and keep coming up with new ones and new combinations all the time (because some of your competitors will get the drift of this too and copy you). Bundle. Bundle. Bundle. Show them that they get more out of their purchase from you than just the idea of saving a couple of bucks. Anybody can cut their prices and most do. Do more. Think outside the knee-jerk reaction of depending on price cutting to solve your sales revenue problems.
Big Dogz Webinar Now Available!! Want to learn more about how to beat a recession and keep your business moving forward on the sales and profitability fronts? Check out the “Beat the Recession” page on this blog. Sign up before January 23rd and save $50! You can register at: http://www.regonline.com/CBP1250
Don’t miss out on this webinar…it’ll be the best low-cost investment you can make in your business!