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  • robmarkwell

In tougher times, should you lead with price?

During tough economic times, businesses often resort to slashing prices to stay afloat. However, this knee-jerk reaction can backfire in the long run. While lowering prices might provide a temporary boost, it can damage relationships with existing customers, diminish the perceived value of products or services, and ultimately eat into profits. For instance, I recall a well-established recruitment business during the credit crunch slashing rates by a third, only to find themselves struggling due to unsustainable profit margins.

In industries like recruitment, bargaining over fees is common practice. However, it’s crucial to strike a balance between making concessions and upholding the value of the service. When price becomes the main selling point, it risks branding the business as the “cheap option,” inviting further pressure from clients to lower prices. This is akin to negotiating at a flea market versus a luxury retailer – the perception of value varies greatly.

While offering more affordable options can be strategic, it should never compromise the core value of the service. Instead, businesses should focus on streamlining operations and improving service quality to weather challenging economic conditions. By prioritizing customer satisfaction and flexibility, businesses can build loyalty and position themselves for success when conditions improve.

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