Pricing in a Recession

One of the misconceptions about marketing is that it is only about promotion. Advertising. Tradeshows. This is not the case. True marketing takes into account the product, the promotion, how you deliver it to the customer and (of course!) price. Pricing theory (and in real life!) states that the price of a good or service sends a message to the consumer - about the quality or value or a product. Think about it - do you want to be a "cheap date" or a good date. See what I mean? Lowest price is not the best option if you are in business, generally. You want to charge as high a price as possible - for the value that you (or your product) provide. I see too many business people take the lazy way out and try and be the "cheapest" - when that is not the best marketing strategy. Your pricing positions you against the other people/products in your market.

But what about in a recession? We in America (and it will effect the world) are on the brink of a BIG recession and perhaps a depression. Scary stuff - especially if you own a business or are in charge of marketing and sales.

Pricing becomes even MORE important. You need to keep your profit margins up and slashing prices is a knee jerk reaction that can lead to a nasty, profit eating downward spiral. Instead, I see a lot of businesses who have been effected by the start of this recession doing what I call "Blue Stove Pricing". I'll blog in detail about "Blue Stove Pricing" on my next entry.

For now, let me hint at what that is. Think of pricing your products in smaller chunks. Finding out what your customers TRUELY value about your product or service - offer that most tasty nugget at the BEST price you can offer. Take out all the frills - make the package smaller (figuratively if not literally). That's your homework for now. Think about your BEST customers. Think about what they MUST have from you and come back over and over to buy. Then think about what is the smallest, most value packed, tasty nugget you can package it in. Then we'll talk about "Blue Stove Pricing".

Do you have a comment or question for me? Talk with me!! I like it -- I appreciate it. I'll write back.