The Grinch and Me
‘Twas the night before Christmas
The store had just closed
I tallied the receipts
Adding to my woes
The Grinch had stolen Christmas
Before my eyes, without even a hint
He’d stolen my profits
Leaving my pockets with lint
In an economy blue
Battling high unemployment and costly fuel
He made me lower prices to get sales – even a few
The Grinch was heartless and cruel
I lowered prices to all
Yet sales and profits continued to fall
So did my holiday cheer
The Grinch had stolen Christmas again this year
Weary and disheartened I drifted into sleep
A welcome respite, a bit of relief
A way to deal with the season’s defeat
Alas, it was a mistaken belief
In my dream the Grinch lowered prices
He lowered them early
He lowered them often
Yet buyers’ resolve did not soften
I saw the Grinch smile
He thought with guile
“I know this won’t work!”
He cut prices and continued to smirk
A voice cried out
“Low prices alone won’t get people to buy!
Of this there can be no doubt.”
Wasting money makes buyers wry
People buy what they want
Price doesn’t matter if they really care
The Grinch knew this, yet continued to taunt
As he pressed me to lower my fare
Wait, what do I see?
The picture becomes clearer
As the Grinch comes nearer
The Grinch is me
It’s counter-intuitive, but “I have to lower my prices to remain competitive” is as much an excuse as “The dog ate my homework.”
In every human interaction one person is training the other how to behave. When you lower your prices to remain ‘competitive’ you train your competitors to take the lead. You tell them that you’ll follow their lead regardless of what they do.
Similarly, you train your customers to wait for a deal. That’s one of the reasons why Chrysler and GM got into such trouble. They trained us to wait for a rebate. Then they added 0% financing. Finally, they gave us employee pricing. Now, unless we get a rebate plus 0% financing plus employee pricing, we feel that we’re being gouged. By the way, their current ‘success’ has more to do with Toyota’s mistakes than any brilliant strategy they’ve devised.
Let’s be honest with ourselves. Between relinquishing industry leadership to competitors and training customers to wait for a deal, we’ve sentenced ourselves to a life of hard work with little compensation.
If that’s the life you really want, go for it. If not, if you’re truly tired of trading dollars, hold your prices and focus your attention on marketing. Look for ways to distinguish yourself that are fun and exciting for you and your customers.
I’m sure that some of you are thinking “If only I had the budget for that kind of marketing.” The reality is that, given your current strategy, you’ll never have the budget. Start small! Fun and exciting doesn’t have to be costly.
If you’re still skeptical, do the math. Many of you are offering 20% to 50% discounts. How much additional profit would you gain if you stopped offering those discounts. It’s simple math 20% or 50% times your current revenues. Now compare those potential profits to how much it would cost to create something fun and exciting. It’s been my experience that the additional profits gained by eliminating discounts returns at least ten times the cost.
Stop being the Grinch that steals your holiday season. Hold your prices. Then find new and exciting ways to attract your ideal customers.
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