Recession Pricing Do's and Don'ts...!

I have been hearing news that in this recession time/period companies are trying to revise their pricings. Though this is very natural for companies to think in to this direction – however I feel that revising the pricing strategy in this economic downturn would be very tricky and risky. There are cases when companies only cut the prices to gain more market share and attract new customers – but right approach can help a company to compete and sustain in recession time.

During my search for what should we do and we should not when it comes to revise the pricing strategy – I came across different articles and views of different experts. Below are few tips – which I found are useful:

We may like to consider:

• Analyze the value we are offering to our customers: Customers always feel comfortable if we educate them about the value we are delivering which in turn helps us to be more confident on our pricing.

• Categorize our value offerings: We can bundle our products & services and establish their prices accordingly, which will allow us to appease both cost and value conscious customers without cutting prices.

• Improving internal processes: The best way to adjust in this period is to streamline our company's processes and expenses. We can’t get very far in this competition with just a price cut.

• Innovate our offerings: Personally – I would like to invest a bit more on R&D. This step will surely help us to offer our products and services in a different way and will also allow us to negotiate flexibility with customers. It has been proved that innovation gives us an edge over competitors when customers are looking for something new.

We may not like to consider:

• Giving discounts on our products or services: In this economic downturn it would not be wise to get in to a price war with our competitors, especially without analyzing the value of the product or service. If we get in to this way – that too in this scenario, we can’t survive for a long and most importantly no body is going to win in this.

• Cutting prices on our high-value products and services: It wouldn’t be wise to touch our high value products during economic downturn. The better approach would be to focus on marketing our low value products and services.

• Give importance to price-driven customers: Ws should never encourage customers who threaten to take their business elsewhere especially in recession time. If scenario arises, either – share the unique value that our product and service offers, which justify the price we are charging confidently or let the customer take their business to our competitors and watch them going nuts.