I’ve seen a little debate about the best course of action to take when the industry a business operates in is in a tough spot: add more value or adjust prices?
This is not a new debate, of course, and both sides have good arguments.
On one side, if you add more value, you improve your product, your competitiveness and have a long-term approach. But you must afford to go through a longer period of time with limited sales, if the whole industry sinks. If you can do that, in the end you’ll surface toughened.
On the other side, if you want to sell more when others don’t, especially if you have cash flow issues, you need to go with the market to survive the short term shock waves. But on the long term, without adding more value or tapping into new markets, any business or business model is doomed.
Supporters of adding more value without adjusting prices say by lowering the prices you diminish the perceived value of the product or service, plus it will be much more difficult to raise the prices to previous levels, once the crisis is over. This may be true, but it’s also irrelevant if you fight to stay in business for the next few weeks or months.
When prices readjust throughout an entire industry, it may be a great opportunity even for a solid business to reevaluate their own prices and the sales they made with each product or service. This is also a chance for limited offers and temporary price discounts (like a summer discount I have for banners on Adrian’s Hub).
It is also a great time to push hard for adding something of value to your business, and some do take such opportunities. I will also release my new add-on for Adrian’s Hub next week.