Instead of lowering prices, add value

Miracle Mile in Downtown Coral Gables
Miracle Mile in Downtown Coral Gables, Image via Wikipedia

Between Groupon, Foursquare and all the other internet deal, discount and coupon options, the case for lowering prices is compelling.

But it can also be the worst mistake you ever make as a retailer!

We now know that with certain retailers, if you wait, there will either be a sale or a markdown soon enough. So, unless you need the item immediately, you wait. They have trained you that you should rarely have to pay full price.

Now, think again… Are these coupon/discount retailers those in which you find great value? In other words, are you shopping there just with a coupon, or all the time? Are you still getting personalized service?

So, if you have products and services of consistent value to your customers, why would you discount for new customers who are only seeking the savings and not the value? Soon you would have to cut your overhead which would weaken your customer service and the downward cycle begins.

Merchandising and Customer Service is key

I once knew a retailer on Miracle Mile down in Coral Gables, Florida. She and her staff were fabulous and her customers knew they would always get the best, most personal service and the most unique goods. She was a real legend in retail.

On one of my Monday visits to observe and learn from her, I saw her moving tabled merchandise front and center of the store. I said, “New merchandise?” She shook her head emphatically, “No! No one’s buying it so I’m merchandising it better and raising the price.” She showcased the features and benefits better on the table and together with the staff’s customer service training, the value was increased.

It was all gone by the weekend.

8 thoughts on “Instead of lowering prices, add value

  1. Excellent post! I like your idea and example of repositioning services so that the value is perceived more strongly. Discounting is only one small way to get customers attention. But in my book, it’s not always the best way. Thanks for the post!

    Sue Shekut

    1. Sue,
      Thank you for your comment. You are right that we should consider all the alternatives in getting the customer’s attention. Hope this helped you in your own business!
      BTW, I checked out your website – interesting niche you have there. What’s your twitter handle? Share your blogsite, too.

  2. Excellent post! I like your idea and example of repositioning services so that the value is perceived more strongly. Discounting is only one small way to get customers attention. But in my book, it’s not always the best way. Thanks for the post!

    Sue Shekut

    1. Sue,
      Thank you for your comment. You are right that we should consider all the alternatives in getting the customer’s attention. Hope this helped you in your own business!
      BTW, I checked out your website – interesting niche you have there. What’s your twitter handle? Share your blogsite, too.

  3. This is a great post. I’ve often thought about this topic as I get daily e-mails from Groupon and Buy With Me. I just can’t get into this discount group-buying mentality. You hit the nail on the head when you said that the people using these cheap deals are probably looking at a one-time discount deal and are not planning to be consistent customers.

    1. Yiu are right, Leah. I hear retailers complain about the 1 time discount shoppers frequently.

      While retailers should offer sales and rebates when seasons change, merchandise is discontinued or dated, etc., if rhese offerings become standard fare, credibilty is lowered. Thanks for the xomment!

  4. This is a great post. I’ve often thought about this topic as I get daily e-mails from Groupon and Buy With Me. I just can’t get into this discount group-buying mentality. You hit the nail on the head when you said that the people using these cheap deals are probably looking at a one-time discount deal and are not planning to be consistent customers.

    1. Yiu are right, Leah. I hear retailers complain about the 1 time discount shoppers frequently.

      While retailers should offer sales and rebates when seasons change, merchandise is discontinued or dated, etc., if rhese offerings become standard fare, credibilty is lowered. Thanks for the xomment!

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