Want to Thrive in this Economy? Listen to Your Customers…
It’s an axiom accepted in virtually every facet of business…victory comes to those who listen and meet their customers’ needs. A new product, marketing campaign, or distribution strategy succeeds if it resonates with customers, right? With this in mind, it’s surprising that most companies today view their pricing strategy as a “take it or leave it” two trick pony: raise prices or lower them. To thrive in this economy, my friends, it’s going to take creativity on a component of your product or service that’s dear to your customers’ hearts…price.
Storied companies are faltering, sales are down, unemployment is forecast to top 10%...it’s understandable that the fear of being laid off is a key obstacle to consumers making big ticket purchases. Want to sell more? Allay these fears.
As reported by Kate Linebaugh of the Wall Street Journal, Hyundai offered its Assurance Plans (which allows buyers to return cars and obtain a refund up to $7,500 if laid off) because “consumers were paralyzed…we had to find some way to give them peace of mind.” And you know what…listening to customers = profits. This plan, in conjunction with other initiatives, has jump started Hyundai’s market share from 2.7% to 4.1%. And get this, to date no buyer has returned their car to Hyundai under this program. Fear often doesn’t turn into reality.
AutoNation, the largest U.S. dealership chain, is rolling out a similar Assurance plan. The expected result? A 10% to 15% boost in sales….not bad, eh? Other companies like JetBlue, Toll Brothers (housing), and Jos. A. Bank (clothiers) offer similar plans.
There’s so much more to serving customers’ pricing needs than simply providing unemployment insurance though. In this depressing economy, who wants to watch a losing baseball team play 3 times a week? Why not allow season ticket holders to return their tickets if the team is below 500 at the midseason? Families are getting particularly hard hit in this economy. Why not serve their needs with special bundles or discounts targeted directly towards families. If homebuyers are worried that buying today exposes them to further drops in prices in the next year – there’s a market for price protection insurance based on average selling prices in the area. And finally, a note to amusement parks – if grandparents (or parents) who are footing the bill for their kids aren’t riding the roller coasters…don’t charge them.
The key to better pricing, really in any economy, is to best meet your customers’ needs…and their needs are far more varied than “I want a lower price.” It’s time to call a pricing summit at your company to brainstorm on what pricing tactics your company can offer to survive, thrive, and create a competitive advantage in this shaky economy.
Readers' Comments on This Blog Entry
I really enjoy reading your blog. There is always an idea that translates to all businesses and I appreciate you stimulating my brain to think about the possibilities.