Too many businesses get caught with no cash flow. The quick fix is to discount prices and start advertising promotions. It may seem like a good idea, a quick way to raise funds and it could easily make things worse.

You still need to have a plan in place. You cannot just slash prices and offer deals. When putting together an advertising campaign, you need to look long term.

Being in direct mail and targeted advertising, I see several mistakes when people get desperate. They panic and fail to think things through.

 

My product is not selling.Are you panic advertising.

Business owners immediately think the best move is advertising a discounted price or special.

It doesn’t always help to promote something which is not selling. Find the reason why it’s not selling. If it turns out to be the price, great. If it turns out to be something else, a discounted price will not help.

Rather than advertise something not selling, try promoting something of value.

 

Panic advertising

The biggest thing I have come across lately is businesses going into full panic mode AFTER they have an ad in print offering a discount! They can’t wait for the ad to hit, so they offer the same thing at a lower price.

First, it’s confusing. What is the staff going to say when a customer calls about the $10 off coupon when the store coupon is $15 off? And when people walk in to your store? It can be a sign of being disorganized. It could be a clue they could wait and it will be discounted more next week.

Second, my client is left wondering why the campaign did not work. As the advertising publisher, I’m left scratching my head wondering why are you are in panic mode.

 

The downside to advertising discounts or ‘add-ons’

It seems all too common. Everyone is offering a deal – all the time! A business who always has a sale on can be perceived as going out of business, or the products they sell are priced too high or they simply aren’t great quality products. It can lead to a lack of trust. If you always have a sale, you run the risk of being not being able to sell without one. If I know you always put things on sale, I’ll wait until you do. You are training your customer to only purchase at a discount.

Cutting prices and the popular BOGO or two for one deals can be a total drain on you and your business. You will have to work twice as hard or sell twice as much for the same revenue. Then there is the issue of restocking. Done right these deals are great and could be used to move product not selling. Abused they can hurt more than help.

Be careful if you offer follow up services as part of the sales price. If you do and misjudge the need or demand for the service, you’re going to lose out quickly if your customers repeatedly come back.

 

Do your research

Before you get to that panic point, plan. Research your competition.

I used to think this was spying, but there is a truth in the old saying ‘all’s fair in love and war’.

Knowing your competition allows you to prepare. Your business can be threatened by someone who sets up shop knowing all about you. If you know about them, you can protect your brand without changing your business plan drastically or slashing prices.

I suggest coming up with newer, innovative ideas. Test them over time. Keep the ones which work and suit your needs and plans.

Increase your visibility. Make sure you are branded well. Image is everything and can help overcome almost anything. Branding creates comfort and trust. When competitors move in, trust will allow you to stay competitive without competing on price.

 

Be Smart

Don’t let panic pricing be the start of a downward spiral. Have a marketing and pricing strategy because winging it is not an option.

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