September 1, 2005
Eating your young is NOT a good pricing strategy.
I saw this up close and personal more times than I care to count when working in Corporate America. Sales down? We’d head right to Plan P (for Panic) and start wildly discounting, sometimes up to 75% off list. Great - we just killed all credibility (and value) for our existing product lines and cannibalized our future (Customer: “Hey, why pay list for the new product? We know we can get it for a whole lot less!”) GM has been eating its young for a while - with its increasing addiction to discounting. (Lots of great detail and analysis from Brand Autopsy.)
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September 4th, 2005 at 2:30 pm
And businesses wonder why their industries turn into commodities??
We see this in the web development business. SInce the internet is supposed to be all about being free, people tend to be very resistant to paying for anything related to it. We’ve seen lots of competitors go out of business by trying to compete on price. We try to compete by offering knowledge instead of lower prices. I too like to get the best price I can on things, but when it comes to knowledge, I want the best brain I can tap to save me me as many mistakes as possible!
The internet has commoditized “things” incredibly. And thought there is ample knowledge available on the net, it still takes a ton ‘o time to sort through it it many cases, and having someone who “just knows it” is a great time and money-saving asset.