In times of crisis the price becomes the spearhead of all campaigns to encourage sales. Consumers are much more willing than ever to be seduced by the most generous companies. Just look at how it has increased the consumption of store brands and attention to offers and promotional discounts to get an idea of what is really going on .
According to the latest TNS Worlpanel on consumer products, 77% of consumers use discount coupons when grocery shopping and 59% involved in product promotions gifts. The answer of the companies? Reduce investment in advertising and design business strategies aimed at clawing competition customers to offset the drop in consumption from its usual portfolio.
Two are very serious mistakes, as explained Jorge Santacana, CEO of Ogilvy One Spain: “In times like these it is when you make advertising campaigns more visible. If others invest less, which you will perform more views. “
As for the obsession to win new customers, Santacana remembers “it is always harder to sell something to a new customer than to whom it already is. It’s like having a tub with the water running. Some companies have the tap to get new customers open jet, but leave the cap removed. The problem is that the water entering the have to pay and that is in the bathtub and I paid. Customer is the same. We must try to keep them in the bathtub and sell more, protecting us from competitive offerings. “
For the CEO of Ogilvy One Spain, good customer service should care even more in times of crisis, to keep consumers are not driven solely by price.
For the rest, it “works best is all you do understand that you will have more for less, but that does not have to affect only the price,” explains Eduardo Vazquez, associate director of Arena.
Discounts yes, but temporary. “The price sensitivity, find the cheapest product within a category, it is a clear trend that is accentuated at the moment, but it is not something that applies with equal intensity in all markets. The consumer segment is the most affected, since the target or target audience of these companies is the families , “explains Antonio Henriques Gil, CEO of Valassis Spain, a company specializing in promotional marketing consultant.
He warns: “Do not confuse price sensitivity with the need to lower it. We must offer discounts, promotions, but with the idea that this is temporary. If your prices and low consumer does not perceive the effort you do, all you get is damaging your margin. Keep in mind that most buyers know the price of two or three products, but not all. “
Giving away product or lower the price? “The promotion of 2 x 1 is perfect to increase sales volume in products that already knows the consumer. It is actions that serve to remind you continue to consume something you know and also likes. However, if we introduce a new product on the market, consumers should be encouraged to try it, putting much cheaper and facilitating the purchase. The sampling (free samples) is also a good option for this: Your gift for you try it for free , “explains Antonio Henriques.
Well explain the offer. “Communication should be effective at the time of purchase decision making and may be at the point of sale or through a voucher.
The purchase decision at the point of sale is taken by reference to a known brand or price. Within seconds, the consumer is linear, sees an offer that attracts and makes the decision not later remember the price. If it takes up a discount voucher, who will use it is aware that this discount, the value it is for a particular product and for a specific time. Are the two most effective strategies, “says Antonio Henriques.
Round prices or discount rates? “Discounts work if they are temporary and if done in a proper relationship with the price that has the product. Not the same apply a discount of 30% to a car shampoo. In consumer goods, it is more effective to increase product at the same price or promotions 2 x 1, while in higher – value items (appliances or technology), the discount is more valuable. And you can apply either a percentage or putting the previous reference price for the consumer to know how much you save , “explains Santacana.
Create anticrisis products. “To maintain profits, there are only two solutions: cut costs, which is easy and in many sectors is accompanied by downsizing; or increase production with the manufacture of white label or launching new more consistent references to the situation, as did a company of detergents, instead of keep throwing new formulations has created a commodity “says Vazquez.