Is she nuts?
For those of you who have been reading the articles I've written during our current economic recession, you indeed may be wondering if I've lost my marbles. After all, throughout the recession, I've been telling you not to lower prices on your products and services.
Why the change in tune?
Because, during a recession, it's better to keep your prices consistent rather than lower them and appear as if you are chasing the buck. However, during a recovery (which we are now in), you do want to lower your prices as money starts flowing and people ease into spending again. As consumer confidence grows, so should your business. And what better way to attract new customers than by offering them a smoking economic recovery deal by lowering your prices temporarily?
Standing on the Cusp of Recovery
Today, we stand on the threshold of economic recovery. According to the September 16th issue of The Wall Street Journal, "Federal Reserve Chairman Ben Bernanke said Tuesday that the recession was 'very likely over,' as consumers showed some of the first tangible signs of spending again." As small business owners, it's now time to move out from under the cloud of fear and stand beside the banner of recovery.
Do you remember the 1983 film Mr. Mom, starring Teri Garr and Michael Keaton? In the film, Jack (Keaton) and Caroline (Garr) are married with three kids and living in the suburbs of Detroit, Michigan, during the 1980s recession. As the movie opens, Jack has just lost his job in the auto industry and Caroline has been hired by an ad agency, forcing Jack to trade roles and become a stay-at-home Mr. Mom.
In the movie, Schooner Tuna has hired the ad agency Caroline works for to help them with their image and sales slump. To do so, Caroline comes up with the unique idea of temporarily lowering the price of Schooner Tuna until after the economic crisis is over. In the movie, you see Howard Humphrey, President of Schooner Tuna, telling the American public:
"All of us here at Schooner Tuna sympathize with all of you hit so hard by these trying economic times. In order to help you, we are reducing the price of Schooner Tuna by 50 cents a can. When this crisis is over, we will go back to our regular prices. Until then, remember, we’re all in this together. Schooner Tuna. The tuna with a heart."
How to Lower Your Prices with Dignity and Strength:
Create an esprit de corps.Don't set yourself apart from your target market. Find a way to connect with them emotionally and show them you are all in the same boat.
Example: We've all been through a lot during this recession and have gone through some tough times.
Make sure you use strong wording when lowering your prices.
Don't be namby-pamby. Let folks know exactly what you are doing in bold, strong language.
Example: We're slashing the price of our services in half!
Be entirely transparent and upfront about why you are lowing your prices.
Don't let there be a whiff of anything slightly off about your offer. Let people know exactly why you are lowering prices.
Example: We know that many of you have wanted to use our services but found our prices were out of your budget.
Be entirely clear in your call to action.
Don't apologize for asking them to take action. Tell them exactly what you want them to do and why.
Example: Check us out again! We've dramatically lowered the price on most of our products.
Tell folks when you will be going back to your regular prices.
Don't waffle around about when you will return to regular pricing. Tell them what you'll be doing and when.
Example: In six months, when the economic crisis is over, we'll go back to our regular prices.
Today, you are standing on the launch pad of success. The recession is over. The pendulum has just started its swing toward economic recovery. That means that things are about to take off for you as a small business owner and for the world as a whole. Now is the time to lower your prices—not six months from now. The moves you make while on the cusp of recovery will determine where you'll be standing one year from today when our economy is stronger and job security higher.
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About the Author: Dr. Susan L. Reid is a business coach and consultant for entrepreneurial women starting businesses. She is the award-winning author of “Discovering Your Inner Samurai: The Entrepreneurial Woman’s Journey to Business Success,” and has a free chapter PDF of her most popular chapter: “Doing What You Love: Multiple Streams of Passion” for those who want see how persistence, patience and practice can really pay off.