Discounts in times of pandemic?

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By Caribbean News Global fav

COSTA RICA, (CentralAmericaData) –  In the current complicated context, companies must reconsider their strategies so as not to fall into the error of making aggressive discounts, since they could affect the positioning of their products in the medium and long term.

Ariel Baños, a specialist in price management and founder of Fijaciondeprecios.com, explains some of the important conditions that must be considered when deciding to make discounts in an environment of high uncertainty such as that which has generated the current crisis of COVID-19.

According to Baños, the idea of making aggressive discounts can be attractive, and even convenient, since the flow of money is very welcome in a crisis situation. The problem occurs later, in the medium and long term. The crisis due to the pandemic is not going to last forever. Eventually, companies will have to think about more than covering fixed costs, and attend to the violent fall in margins generated by the huge discounts announced.

The article adds that “… Price is one of the main references for the positioning of our product or service. It conveys a lot about our value proposal, and the confidence we have in it. In an environment of uncertainty, and this is certainly the case, a surprisingly low price can send the wrong message to my potential buyers.”

Details of the conditions to be met to make discounts that benefit the company in the medium and long term:

  1. Generating a positive feeling in our clients, which means that we empathize and want to help them in this difficult time.
  2. Communicate that we also need help, but nevertheless we maintain our dignity and our principles, we are not “giving away”.
  3. Everything must have a limited duration and scope, conditions that have to be clearly communicated in advance.
  4. Actions should not affect our positioning for the medium and long term.

Details of the three strategies:

Show social empathy

Companies are part of society, so they must show solidarity and understanding in difficult times. Customers value these kinds of signals. So, applying new discounts selectively, and even offering some free options, can help show that the company is in solidarity with the population affected by the pandemic. Of course, these types of strategies must be well-communicated, and limited in scope and duration.

Encourage socially responsible behavior

At times of restriction, many do excessive storage of some products, which leaves others that are also needed unavailable. Volume discounts lose their relevance in this type of situation. The objective of “selling a lot” no longer makes sense in this context, and we can replace it with “selling well”, which means ensuring the greatest possible customer coverage, with the stock or capacity we have available.

Boosting sales, but not compromising the future

In the case of companies in the tourism sector, one of the most affected, flexible packages and rates must be offered, with options for reimbursement at no additional cost, in the event of any change that the client wishes to make. The idea is to convey to potential customers the possibility of buying without adding concerns in an already complicated context.

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