The temptation for many companies to drop their prices until life returns to normal seems to be reaching its peak. With companies feeling so desperate to compete with their competitor's discounts and deals that they’ve begun to offer free service. Which in many cases is the exact opposite of what they should do, as it will most likely bring little to no income.
You might think dropping your usual rates will help increase work opportunities and keep struggling clients with you until they recover. But, dropping your prices isn’t the best move for your business. Here are four reasons why it’s the wrong tactic.
1. Potential to Market Yourself to the Wrong Clients
Offering low prices attracts customers. It brings new clientele and increases brand awareness. Those are the dry facts we all know, but here's what many ”marketers“ don’t tell you due to them being new, or completely unqualified. Offering heavy discounts as many are doing during this COVID-19 pandemic, is actually bringing them consumers that can’t usually afford their products or service. Chances are after coronavirus has passed, these new clients will have come to expect a certain level of pricing. It will be a challenge to justify raising your rates back to there original worth. Doing so will lose you the majority of the clients you obtained from your heavily discounted offers. Not only this, but it will surely piss some of them off. Resulting in a lowering of brand trust, and possibly some bad reviews. Lowering your prices makes you appeal to those who don’t value your work. Instead of becoming loyal customers, they’ll grab the bargain price and run when you get too expensive.
2. Create Your Own Ocean
Instead of lowering your prices to attract struggling businesses, why not shift your focus to those who are booming? Many companies are thriving during this stay at home/lockdown and could benefit from what you offer.
Rather than devaluing what you normally do, find a new route, and shift sideways into a different ocean. Offer something new and useful to the market, escape from the red ocean that is congested with all your competitors. There are plenty of companies struggling with unexpected success. Overwhelmed with the influx of demand and looking for ways to make life easier.
COVID-19 will bring down many companies, but out of the ashes, opportunity is birthed. Seize the opportunity and start by thinking of ways to open your own blue ocean of new business space. Use analytics to track trends to find what people are looking for. Find these companies and show them that they need you.
3. You’re Being Average
Working for peanuts will fill up all the hours you have. That leaves even less time for research, marketing, improving your skills, and ultimately growing your business. Unless you really are desperate for income, this approach just puts your business on hold. Even if you are desperate and feel you need to work for peanuts, be ready to see your brand value drop as an unfortunate consequence.
It’s better to reject very low offers and spend time on things that will make a difference in the long run. If you have downtime, take a course, redo your CV, update your website, grow your mailing list, speak with a local marketing firm. These companies are in place to make you money, and many are themselves offering relief rates. Most owners have reacted with panic, or have just thrown their hands up & started investing what money they have in wine instead of marketing. There’s one effective reaction, and that is to seek out opportunities and take advantage.
4. BOOM, BOOM, BOOM!
If you’re booming, the best thing you can do both ethically and for your brand's image is to expand the BOOMS reach and help others in need. But offering a discounted rate isn’t the right approach here. In fact, it can be downright hurtful to your brand, coming off as opportunistic rather than charitable.
If you’re able to help, give something for free to the right people or organization rather than suggest a heavy public discount. There are plenty of businesses that could benefit from your help. Look to your neighboring business, your religious institution, favored news partner, to create something they’ll find useful and easily build your mailing list along the way.
Pass on that BOOM, but be careful how you share your good deeds on social media. If you are fortunate in this most unfortunate time there are vast opportunities. Be cautious in navigating through these highly emotional waters. Here’s where looking into a local marketing agency can really help. With an agency’s connections knowledge and experience, you can see your brand awareness shoot up astronomically. News features, unique timed strategy & campaigns, planned events, the possibilities are endless and time opportune. If you want to make a difference, look beyond your usual business activities and do something that will really help those around you, but do it right.
Coronavirus has shaken things up, that’s for certain. It’s tempting to put business growth on hold and drop your prices to survive. But others will see the opportunities amidst the chaos. If you’re not careful, you’ll soon be replaced.
This is a time for outside the box mentality, creativity, & innovation. Marketing has never been more important. Here at Promotonics we take a deep look at your business and overall industry to see how you can adapt rather than stay frozen. Our job is to have you succeed. It’s not only the heart that pumps the creative blood throughout but the overall reason we’re here. We’re Promotonics Marketing Agency and we direct the light to where it belongs (especially in the darkest of times), ON YOU!
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