Mistake #2 in times of crisis – Lowering prices

⚡️ MISTAKE NUMBER 2 OF COMPANIES IN TIMES OF CRISIS ⚡️: lowering prices 🥺
Why is this a mistake? For several reasons:
1️⃣ It is a mistake to believe that people will only buy from us if we are cheaper. Our customers and future customers will buy from us if they believe that the price we ask for our product or service brings them the value they need.
Surely you know someone in your environment for whom spending 1200€ for an IPhone X is “worth it” and yet they don’t spend 40€ on gym membership because it seems expensive to them. The concept of “expensive” or “cheap” is linked to a much more important notion for the consumer: What value does it bring me, as a consumer, to choose such a product or service?
This value can be tangible (no one will be shocked that gold earrings are more expensive than plastic ones, for example) or intangible (I support local commerce, I help reduce my plastic consumption, I choose something aligned with my personal values). Therefore, cheaper is NOT 👉 more valuable or more relevant, YES!
2️⃣ Lowering your price affects your margin. You will have calculated your selling prices considering your costs + the margin you intended to achieve with each sale. “Eating” this margin if you control in order to lower the price more and more is risky: you could even end up losing money on each sale!
And you would create another added problem: if you were selling something for 60€ and all of a sudden you lower it to 30€, the perception of your customers will be that in reality your product was always worth 30€. Can you imagine how they will feel? Where will your brand image be? And how will you justify going back to the initial price of €60 when you feel like it?
Bottom line: lowering your prices to sell more may seem like an easy and even attractive option, but it has serious consequences… Think again!
In the next post we will see the third most common mistake made by companies in times of crisis.
See you soon!