Trade promotion is a tricky subject because of the sheer amount of money that is at risk. Often, trade promotions will be the most expensive marketing tool that is used for the year and it has the potential to either make or break a company.
I missed the irony on my first read of the email in which a marketing firm talked about pricing. The second reading left me laughing. It never ceases to amaze me how alluring low prices are to sellers.
From time to time some companies lose money on projects through labor overages, material overages or mispricing a project. They have to work harder and more efficiently to make up for those losses. But how much harder and how much more efficiently?
How is it that businesses consistently fail to see the relationship between price and profits? What I suspect is that many businesses believe that it’s easier to compete on price than to differentiate.
Nearly every small business wants to sell more stuff— stuff being whatever your product or service is. After all, your business can’t survive if you aren’t selling stuff and generating revenue. But not all sales are the same, and selling the wrong way can ultimately hurt your small business.
What would you think of a restaurant that offered really good food, but the salad is free and the dressing is extra? The potatoes are free but the sour cream is extra. The soup is free but heating it costs extra. And table service is free if you wait two hours, but table service in 20 minutes costs extra.
True loyalty programs are built on the basis of establishing a long-term positive relationship between the company and the customer and is not accomplished with a single “deal” or even multiple “deals.”
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