July 29, 2015

A Pricing Cycle

Here's a common dynamic in my projects ... see if this happens at your company.
  1. Your average price point is $40.00.
  2. Customer response is not good.
  3. You offer 20% off plus free shipping.
  4. Customer response improves.
  5. Profit looks bad.
  6. Finance and/or Merchandising doesn't like making no $ whatsoever.
  7. Finance and/or Merchandising charges more for new items.
  8. Customer response to expensive items is not good.
  9. You offer 30% off plus free shipping.
  10. Customer response improves.
  11. Profit looks bad.
  12. Repeat 6-11.
Briefly describe what the end-game looks like in this scenario ...