Tags
#Discounts
Give up revenue from promotional sales and discounts to avoid cheapening your brand
Retail discounts and sales for Apple products just don't exist. Not only do they cheapen the brand, but they create an expectation that all consumers have to do is wait and eventually the price will go down.
Don't undermine the value of your brand with coupons and discounts
To Chick-fil-A coupons and discounts scream, “Our products are not worth full price." Instead of being a "transaction-chasing" brand like other fast-food restaurants, Chick-fil-A chooses to build their brand through personal relationships.
Win price wars by knowing your audience
In 1973, as a young airline, Southwest's low cost frequent flights were posing a threat to the market share of the larger well-established Braniff Airlines. Having deep pockets, Braniff launched a campaign that undercut Southwest's $26 flight from Dallas to Houston by half.
With the strong possibility of losing all of their business to Braniff's cheaper flights, Southwest fired back with an ad that read: 'Nobody's going to shoot Southwest Airlines out of the sky for a lousy $13.'
Within the ad, Southwest offered their customers a choice: Southwest would either match Braniff's $13 fare or customers could buy a regular $26 ticket and receive a complimentary fifth of vodka, whiskey, or scotch.
And the result? Besides Southwest becoming the largest distributor of those liquors in Texas during that time,:
- Three quarters of Southwest passengers chose the liquor over the half priced fare.
- Southwest's passenger count went up by 66%.
- Southwest turned its first ever profit that year.
Braniff, on the other hand, reinstated their original higher rates and would eventually cease operations in 1982.
Southwest's victory was a result of the company understanding their audience. Their core customers were business travelers who expensed their trips, and would much rather have a free bottle of booze than help their company save a few dollars.
Say no to sales, specials, and discounts
With a firm belief that all customers should have access to the best prices at all times, Trader Joe's stays away from anything that could provide better value to one customer over another. As founder Joe Coulombe puts it, "One of the fundamental tenets of Trader Joe’s is that retail prices don’t change unless costs change...Supermarket pricing is a shell game and I wanted no part of it." This also included saying no to these other price manipulators:
- No coupons
- No price matching
- No loyalty programs or membership cards
- No senior discounts
- No weekend ad prices
- No in-and-out pricing
- Absolutely no closeout sales
Don't weaken your brand with blanket discounts or promotions
In an online world that is dominated by discounts and coupons, Zappos chooses to differentiate themselves as a premium service brand. They see their customers not so much as price-conscious, but as service- and selection-conscious instead. By avoiding anything that directly relates to monetary compensation, they can focus on providing WOW experiences while upholding their brand integrity and the brand integrity of their offered couture brands. While they do offer some price matching, it is only as needed when compared to other premium competitors.