Do We Discount or Do We Give A Little Less In This Economy?

We were driving down 280 today (@tonylegrone) and I (@garrett98), when a discussion about chicken strips started. Turns out Dairy Queen has changed vendors or products when it comes to chicken strips. As Tony said, “They use to be huge and juicy!” Now they are these skimpy and very average strips. We went through all the reasons why a company would go from a premium product to a very garden variety and sub par brand of strips.

In a good economy you could chalk it up to a number of reasons, but these days, everything is about price. Our very simple solution was to take the discount per unit (from changing to poorer quality food) and raise the price on the premium product. I mean, would you stop going to a place you enjoy over a 20¢ increase for a combo unit? No!  Would you stop going if you hated the new product? Yes!

It is this kind of short sightedness that causes companies to have knee-jerk reactions in poor economies. Customers in bad economies stop wasting money, but they don’t stop spending money. If you provide a good service or product, don’t discount it and don’t skimp on service – raise your price to cover the cost. Those who are still spending money in your market of products or services are going to be willing to invest in what they like, that isn’t where companies are “loosing” money, it’s the less frequent buyers that cause the dip.

To keep the “masses” coming, companies will punish the dedicated fans with sub par products/services in an effort to save a few pennies.

The answer, in my very humble opinion, is to charge what it would cost to keep your company in business. You can take this to the bank, if you make it about price, “they” will make it about price.

Our group carries a very serious NO DISCOUNT policy. As a sales person growing up in business, I hated the haggle. So, we simply won’t do it. On top of a no discount policy, we are no where near the bottom of th barrel when it comes to price. It isn’t because we are over priced, which is one reason we don’t haggle on prices, but because we know what it takes to provide the kind of sevice we offer.

And here is the universal truth:

There are clients who are willing to value our company to the same degree we do and there are those who are NOT willing to value our company to the same degree we do. By sticking to a price that covers the cost of business and keeps operations smooth, you attract and retain clients who value you and eliminate those who do not.

Have you ever heard of someone being a raving fan based soley on price? Is being known as cheap your companies goal? Do you want to save money by producing your second or third rate best? If so, you are going to be fighting the masses for pain in the ass clients.

Or you could go the opposite way. Go after the upper echelon of clients (which everyone wants, but few can land) and provide your first rate product. There is the unfortunate truth that some companies simply can’t provide or don’t provide a first rate product. If so, that’s okay, really. Set you price appropriately near the bottom and do your thing.

However, if you make a mean chicken strip, don’t sell yourself short – sell it at the right price and keep the right clients.

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