Worse, business is now telling consumers that “if you wait long enough, we’ll continue to lower our prices” giving the consumer little incentive to purchase early and pay full price. Not to mention the impact discounting has on your brand.
Instead of discounting, innovate.
Quizno’s created new products – the $4 Torpedo and $3 Bullet – that they could sell for less money yet maintain profitable margins. Second week sales of the Torpedo increased 26%.
In contrast, Yum Brands (Taco Bell & Pizza Hut) reported a 1% decline in second quarter same store earnings, due in part to offering deals on their existing menu items with shrinking margins.
On a different scale, companies like Dell and HP have introduced NetBooks, wireless devices geared for email and social networking without many of the features of more expensive desktop or laptop computers. These too were developed with both price point and margin in mind.
Before this week is over, think about what you can do in your business to meet the budgetary needs of your audience while maintaining the margins you need to be successful. This winning combination can help restore faith in your brand – and your bottom line.