COVID-19 hasn’t just affected the supply chain; it’s slashed demand as well. As businesses look for surefire ways to attract customers, many are turning to the oldest method in the book: cutting prices.
If your costs have recently been lowered through a new purchasing strategy or increased competition among suppliers, a price cut may be the way to go. Not all price cuts, however, are created equal. For a price cut to be effective, you must market it properly.
Marketing effectively and efficiently is always difficult, but things can get particularly thorny with price cuts. To get the word out on your company’s new payment model, try these tactics.
- Explain the price cut to your customers. Make them aware of the branding logic (they’re not concerned about your business logic).
- Keep the focus on the features of the product and the value it delivers with respect to the price.
- Plan your price cut well in advance. Decide whether it will be temporary or permanent.
- Know how your competitors will react.
1. Make It Cohesive
A price cut is never just a price cut. A business that drops its prices out of the blue with nothing more than an announcement signals something it doesn’t want to. Perhaps its product has dipped in quality, or its customers have moved to better alternatives. In any case, it’s best not to leave customers wondering why your prices suddenly dipped.
The best way of going about it is not by thinking about it as a price cut but as a complete rebranding. Unjustified price cuts can trouble customers or, perhaps even worse, go unnoticed entirely. Selling your price reduction as part of a larger marketing campaign ensures that it grabs attention and justifies its new price point.
That being said, it’s important not to simply pretend like you’re introducing a new product or service when all you’re doing is slashing the price tag. Instead, think of it as an opportunity to emphasize new elements of what you’re selling and incorporate its affordability into the core of your marketing story.
2. Focus on Features
Along those same lines, think of your product’s price as a key element of the marketing process. Far too often, marketers think of price as something separate from the product itself, but consumers don’t.
For lots of customers, price is a feature just like any other — and you should market it that way. If your company’s primary service lost a key feature, your customers would be justified in seeing it as a depreciation in quality as well.
This same principle can apply to changes in price. Emphasize your new price instead of emphasizing the decrease.
By incorporating messaging around affordability and accessibility into your marketing, your price cut may seem like a big boost in product quality overall.
3. Establish a Timeframe
Price cuts should never happen spontaneously or without careful planning. Having a long-term plan for your product’s price is absolutely crucial. Before creating a plan, you need to understand exactly where you’re at in your product’s life cycle. Different products have different schedules for typical price drops. It’s important to know exactly how your price is following or straying from that schedule.
The most important aspect of forming a timeline is establishing what this price cut might look like in the future. If you cut prices with minimal marketing, only to raise them a few months later, your customer base won’t be happy. Price cuts intended to be long-term should be marketed that way.
But there can be value in emphasizing temporary cuts as well. Businesses looking for a quick boost in patronage should gravitate toward short-term price drops. Companies looking to shake up their model in a major way, on the other hand, should consider the value of attracting an entirely new clientele with a permanent price decrease.
4. Keep Your Competitors in Mind
For better or worse, no price cut happens in a vacuum. Customers will always be looking to your competition to see how your prices and products square against theirs. If your price cut is a response to a similar one in your industry, people will take notice. To market a price cut properly, you need to emphasize the factors that make it unique.
No business wants to appear one step behind the competition. Emphasize the advances in technology or boosts in your supply chain that have allowed you to cut prices, or mention that you’re hoping to give customers the best possible per-dollar value. No business is likely to come out of a pricing war on top, so be sure to stand apart from your competition whenever possible.
Getting the right message across about your business is more difficult now than ever, and price cuts are no different. By keeping your business’s mission and goals in mind, you can make sure your customers get the right impression from any changes to the price tag.