Captain’s log, stardate 20200331
Sent by Jonathan Stark on March 31st, 2020
Have you ever seen a retail store with a huge sign out front that says:
Everything must go! Entire stock 90% off!
What is your reaction to this? Does a message like this inspire confidence in their brand? Do you think the stuff inside is awesome high quality stuff? Or a bunch of picked over junk?
Here’s the thing…
Lots of people are asking me if they should slash their prices if/when the economy is bad.
There’s a lot of nuance to this question depending on exactly what we’re talking about:
All that said, my general thinking on the subject goes like this:
Price is an extremely powerful marketing signal. Slashing the price of your product or service runs the risk of making you look cheap. It devalues your offerings. Which is to say, potential clients perceive less value in what you offer even though it’s the same stuff you sold yesterday.
What I’d recommend instead is to stick to your price for a given thing OR give it away for free. You can make this decision on a case by case basis with all of your offerings.
For example, maybe you make your video course free for a limited time, but you maintain (or even raise!) the price of your flagship consulting offering.
Having an “Everything must go!” fire sale doesn’t project the kind of confidence and stability that people are craving in uncertain times. If at all possible, I’d opt for either free or expensive. The middle ground between the two is a dangerous place to be.