Business Success In Tough Times Doesn't Mean Lowering Your Prices

When sales slow to a crawl, the first some many business owners do is slash prices to the bone. It's a reactionary move that can provide some temporary relief when sales surge ahead. But dramatically discounting prices can be a dangerous practice.

Think twice before lowering the price of your main products. Dropping the price is an instinctive reaction when sales aren't where you want them to be. But rarely is it in your best interest to chop your selling prices and your margins.

If you stop and think about it, in times of sluggish sales, how do you think your competitors will react? Most of the time, they'll simply lower their prices and it becomes of never-ending game where profits are obliterated.

Marketing on price alone is a weak position to hold. It's one that's virtually impossible to defend. Competitors can easily and quickly beat you by offering an even greater reduction. If you're using price as your main strategic weapon, you have no choice but to respond in kind. As prices drop, so do profit levels.

This forces you to make cuts in other ways by reducing services, staff, or by squeezing suppliers for better wholesale prices. Selling on price is a difficult and dangerous game as there's always someone willing to offer a deeper discount.

A better option is to increase the value you offer. In other words, give people more in exchange for their money. You can do this many different ways such as offering additional services, providing free tips and training, or by simply making the shopping experience more fun and enjoyable.