How would you feel if you had not raised your prices in 10 years and now volume starts to fall?
Developing a strategy, tracking the data, and analyzing the results will help you to maximize your profits. You have several options during a slow economy.
- Drop prices radically – build volume and perhaps eliminate some competitors in the process. Some airlines have pursued this strategy, particularly British Airways into England.
- Discount heavily with perhaps the same result,
- Maintain current prices with targeted discounting, or
- Increase prices as you need to and risk a backlash as the economy slows.
Each of these strategies may have merit. As you select one of the options, keep track of your actual pricing, after discount, and what happens to your volume AND TO YOUR PROFIT. Monitoring these results will help you quickly change course if the results don’t live up to your expectations or to continue the course if you do select the best strategy.