Price / Customer Relationship

There's a reason marketers lust for discounts/promotions.

• More customers purchase when prices are lower.

For many of you, your cost of goods soared in the last three years. You had to make a choice ... do you pass the costs along to your customer, or do you eat the costs?

Almost all of you chose to pass the costs along to the customer.

And the customer responded by saying, "I have a budget".

It's common to see the following.

• Brand increases prices by 20%.
• New/Reactivated customers decrease by 10%.
• Brand thinks the math works for awhile.
• Not enough new/reactivated customers are acquired to fuel future growth.
• Brand observes sales declines in years two/three/four.
• Brand asks "what is wrong with our business?"

There's a reason companies like Macy's eventually gamified purchases to the point where merchandise has no relevance and the brand stands for nothing. At some point in the past, Macy's learned that lower prices = more customers. They got the customers, but lost their soul.

It's a horribly difficult job to not become Macy's, and to not increase prices too much. Regardless, we're paid to balance this relationship.