Cutting the Price is Always an Easy Option - There's Usually a Better Way

One client of an accountant “discovered” an idea that allowed him IN ONE DAY to boost his Saturday retail sales from $5,000 to $45,000.

Another client harnessed the same concept and caused a rush on stock that had been gathering dust for months and eating into his cash flow.
 
Another client, because of a supplier’s confusing computerized ordering system, inadvertently double-ordered his Christmas stock. He had to liquidate it or face a devastating cash flow crisis. He also applied this same leverage point and had orders streaming in.
 
If your business has ever gotten into a bind with a build-up of inventory (as many businesses do frequently), you know that there are a couple of ways that you may have gotten into that situation. You may have been caught with a service or product that was just not selling, or you may have simply been frustrated at not being able to communicate the true benefits of your products.
 
Believe it or not, there IS a way to not only sell those products, but sell them very fast. What’s the secret?
 
The "secret" is so basic, simple, and obvious, you’ll laugh: 
 
TELL THE TRUTH
 
Let’s explain that and reference it back to the leverage point.
 
Suppose you have 10,000 widgets gathering dust on the shelves. Maybe you over-ordered. Maybe they were not “this season’s color widgets”. For whatever reason, they’re simply not selling.
 
Suppose the widgets normally sold for $100 and they cost $45. A typical response would be to liquidate the lot at $45. And that might make sense. But there’s another way to handle it that might work a little better.
 
Write a letter to your select customers that goes something like this:
 
Hello (name):
 
Last year I made a major mistake.
 
To put it bluntly, I goofed!
 
My mistake can, however, be of some considerable advantage to you.
 
Let me explain.
 
Last December, I ordered 1,000 widgets. When they arrived, I couldn’t believe it. Instead of 1,000, I got 12,000. Widgets, it seems, are always ordered by the dozen.
 
The supplier would not take them back. So I had 3 choices:
 
§         I could fight him in the courts.
§         I could try to sell them as best I could.
§         I could make them available to my select customers at a price they’d never seen before.
 
If you’ve ever tried fighting people in our courts, you’ll know how debilitating that is. It was simply not an option I’d enjoy taking.
 
So the day after the widgets arrived, I put them out on display. They went quite quickly — well, much quicker than I thought. After all, they are the very best widgets with accurately milled steel bases and specially smoothed and sanded ends. It makes them delightful to work with, and so much easier than the “normal” ones.
 
They’ve even been specially treated with a specially developed carbonated resin that protects them outdoors. And they carry an absolutely unlimited warranty. When you have one of them, you’ve got it for life.
 
But, as quick as they’re going, it’s still not quick enough. I simply must free up some space to bring in new season’s merchandise.
 
So, I’m now in a situation where I want to present you with an offer I hope you’ll find too good to refuse.
 
You’d know that “normal” widgets can be bought here in Anytown for $100. These special versions I have are hard to obtain in retail stores.
 
But I’m making them available only to our best customers such as you as a way of saying “thank you” for your business in the past. You’ll only need to pay $70 for them in lots of 5.
 
They are available as from 5pm on Wednesday afternoon. We’ll be staying open until 11 p.m. to accommodate the rush of orders we expect.
 
Of course, to make it easier for you, all you need do is call us before then and we’ll hold them for you. All we can do, though, is hold them for 24 hours, because I know the demand will be high.
 
As you read the letter, you’ll notice some major keys:
 
§         You did not just “cut the price”.
§         You re-stated the benefits of the product — you haven’t left anything to the imagination.
§         You’ve added in some interesting little twists like “in lots of 5”.
§         You’ve made it easy to buy (“you can call and we’ll hold them for you”).
§         You have told the truth.
 
There’s an important point here. People do not understand or appreciate a value, or a bargain, or a service, or a benefit, unless and until you first educate them to appreciate it. Merely offering a product or service at a specific price (even the best price) is of questionable value. You need to create excitement by telling people what they’re getting, what value it is compared to other products and services, and why or how you can offer such value.
 
Perhaps the major key here though is this: when your business has a problem, and something goes wrong, always acknowledge your “mistake.” Tell the truth. Failure to do so is moral suicide.