As we hurtle towards Black Friday and all the chaos that ensues, it is worth reflecting on the power of price and its value as a long term, compelling sales strategy. Black Friday is regarded as the unofficial opening of the Christmas shopping season, which is typically regarded as the peak selling period for brands and retailers. For many ‘tis the season to rectify sales targets, as they hope to capitalise on the flurry of people who purchase gifts and decorations and engage in general preparation for the festive season. Black Friday is notorious for its discounted strategies and although we know that price is a strong incentive, is it a sustainable long-term sales strategy?
Competing on price inevitably puts the pressure on margins, and low prices often come at the expense of quality, whether that is reflected in the actual product or the service. Best price does not automatically mean best value and consumers know this. Many small businesses mistakenly think that undercutting prices mean that they secure the business, but this can be a path to ruin especially if it means it is done to the detriment of the business making a profit.
With the rise of online shopping, aggregator sites have encouraged low cost strategies, as they enable the consumers to effortlessly price compare and encourage customers to shop for the lowest price. Brands who have built their business and reputation on low cost business models have often done so at the expense of service and quality. Competing on price is not for everyone. To succeed at a low-cost strategy requires ruthlessly trimming margins and generating high sales volume. Customers who shop to secure the lowest price are only loyal to the price, not to you. Although it may seem easy and attractive to initially compete on price, unless you are able to hold your position as the cheapest in the market, you will forever be battling to appeal to customers.
When deciding on a sales strategy it is important to think about what can be sustained over the longer term. Although price may seem like a quick short-term fix, it is a difficult strategy to compete on. Work out your point of difference and build a compelling value proposition that customers can buy into while making sure that you are competitively priced is a more sustainable strategy.
Pricing strategies are complex and difficult to get just right to ensure future business growth. Price does undoubtedly play a significant role in being competitive in the market but it is more manageable as part of a broader sales strategy. Having multiple reasons why customers will chose to be loyal to you is so much better than one reason why they will not.
To discuss your sales strategy with our expert sales team contact Gavin.email@example.com to arrange a coffee and chat to get the ball rolling. With our 22 year+ experience in sales, we are confident our team can help your brand succeed across Ireland.