Marketing

Recession Pricing Strategies – How Low Can You Really Go?

Tempted to cut prices? You’re not alone. With slumping sales, many businesses have been quick to offer discounts. “Cutting prices is by far the easiest marketing technique you can use,” says Frank Luby, a partner in Simon-Kucher & Partners, a pricing and marketing consultancy. But price cuts raise some tough questions: Will deep discounts cheapen your brand? Once you cut prices, can you raise them again? How do you deal with narrower margins? Says Luby: “I try to get my clients to think about where they want to be as a brand when things turn around.”

Here are three companies that made big pricing changes and the results of those decisions.

Wooing Recessionistas

Jeremy Shepherd started to get concerned last summer. The founder of PearlParadise.com, an online retailer in Los Angeles, Shepherd noticed that sales of high-end pearl necklaces were slipping, and he worried that might foreshadow a dismal holiday season. The company relies on sales of $1,000 to $5,000 pearl necklaces during the crucial end-of-year months, which typically account for about 40 percent of annual sales. But though Web traffic was up, many customers were favoring jewelry priced well under $1,000.

Instead of promoting his higher-priced items, Shepherd decided to boost sales by appealing to his customers’ thriftiness. He created a “luxury for less” campaign and priced his strands of Tahitian pearls, which usually sell for $500 to $700, at $300 each. Then Shepherd spent $75,000 to promote the sale. He also revamped his website, placing lower-cost items on the home page.

Orders began to pick up. …read more at Recession Pricing Strategies – How Low Can You Really Go? – at Inc.com, published 1 March 2009.

Flickr photo credit: Harpersbizarre

By | March 30, 2009|Blog, Marketing|0 Comments

Getting It Wrong

In 2008, entrepreneurs Chris DiMambro and Keith Dupuis sought to upscale their Main Street Grill, a sports bar and family style restaurant in Weymouth, Massachusetts. Their $48,000 risk–in seemingly positive changes that included an expanded menu, flowers on the table, linen napkins, and even new salt and pepper shakers–so angered their regular customers that, after 9 months, the pair had to acknowlege a flop. Disheartened by the empty seats, angry customer letters, and a 15 percent drop in revenue, the two look back in this MSNBC video to what went wrong and the lessons learned. Says MSNBC in summary, “to keep the customers you have, you need to be in touch with what they’re looking for.”

See the video below and a related, more positive piece from the Boston Business Journal, 3 February 2009.

Flickr photo credit: gregs stuff

By | March 26, 2009|Blog, Marketing|0 Comments

A crash course on postal and e-mail list testing

Give a pop quiz to most direct marketers on postal list testing and you’ll find an incredibly knowledgeable group of professionals. Give a similar quiz to the same group on e-mail list testing, and the score may be entirely different.

Just like the proverbial apples and oranges, postal lists and e-mail lists are just not the same when it comes to testing.

Individual knowledge about the nuances of each type of file is essential to a successful outcome. While it’s impossible to cover everything that separates these two direct marketing list tactics, here are some vital tips to make smart list choices for the fourth quarter and beyond.  …more at A Crash Course on Postal and E-mail List Testing – Directmag.com, published 24 Nov 2008.

Flickr photo credit: k.tommy

By | February 9, 2009|Blog, Marketing|0 Comments