Walking around shopping centres, you will observe many shops with signs such as SALES, ‘50% OFF”, BUY ONE GET ONE FREE etc. Price cuts are common and usually a tool for boosting sales especially in a recession.
However reducing your prices may not always be the wise option. Some other factors can be improved to boost customer patronage such as:
·Customer Satisfaction: A review of customer service will highlight areas where there are lapses. This will entail a sincere assessment of your services; ask yourself, what has been the experience of the last customer; were they pleased with our product/service? How is the ambience of your business location? Do customers feel welcome, heard and special?
·Product Quality: Are your products of high quality, how are they displayed? Do they look neat or old and dusty? Do customers consider our products/services of high value? Imagine walking into a business and you are offered a dusty and torn brochure, your first impression would range from this is an unserious business to this is an outdated company and they may not be able to meet my need.
·Targeted Marketing: It is possible your sales are down because the needs of your target market have changed and you are still stuck on the old. A good example is a mobile phone retailer who is still stocking and selling first generation products when the industry has upgraded to 3rd or 4th generation. Marketing will keep you informed of the needs of your customers and industry trends.
Adjusting your sales goals, targeting a new segment and optimizing business operations can also be used to increase revenue thereby eliminating the need for price cuts. The ultimate no-no will be using price as a competitive edge as low prices can never be sustained or leveraged for increased profitability.
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