4 Reasons To Never Discount Your Prices

ist1_2106156-go tempAt the moment I am frustrated with the printer I got for a steal when I purchased my computer–3 years ago.

I am cranky because when one of the 3 cartridges for the color toner runs out, nothing will print–not even with bad color, or just black. The printer even has a black toner cartridge that is twice the size of the others for use in “black/white mode”, and still does not print anything.  I have spent time researching this and have found no resolution, just other frustrated Canon users. (Yes, I know I should have extra cartridges on hand.)

This situation got me thinking about purchasing a product for a low price when the product does not even live up to the low expectations generated by the initial investment. (Last spring I shared some ideas about how to choose the most effective price for your offerings.)

This frustration could be as simple as buying a large basket of tomatoes or apples at a discount then finding a few rotten ones.  We generally throw out the bad apples and move on–perhaps finding a new source, but generally do not put too much thought toward the situation.

KC_OverTheHump_Masthead 230x200However, most of the time when we purchase something because of the low price, over time we still need the product to live up to our needs (and expectations).  If it does not, then no matter how low the price, the company still suffers: in profits and reputation.

Here’s why:

  1. If the price does not sustain a meaningful business model, the company is not profitable and closes
  2. If the company raises the price without customers expecting it, this will cause a more negative response from the market than if they had set the price higher in the first place.
  3. Even when a product is sold at a low introductory rate, and the company provides notice of a higher cost in advance, it’s still human nature to want to pay only the original lower price. Most people will get past that, but some ill will can still be created
  4. Over time, consumers will wait for a sale.  This delays revenue generation, or possibly allows a competitor to attract what used to be your customer.

As I said in the initial post, many of us do not spend a lot of effort on pricing–here’s a few more reasons why we should. It’s just good business on many levels.

Does your company do a good job of setting prices?  What methods and practices do you use?  Do you agree with my ideas above? Why or why not?

Please share by commenting below!

Happy Wednesday,

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Please note: I reserve the right to delete comments that are offensive or off-topic.

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