Wednesday, May 5, 2010

Discounting Question...

I had an interesting debate with the president of a baby product company here at the ABC Spring Conference in Louisville.

His company has a minimum ad price to help protect the integrity of his brand (and keep the low-overhead Internet dealers from discounting so much that the brick & mortar stores drop the product). But lately he has relaxed that policy, because as he puts it, "In this economy we felt we needed to give some relief to the consumers and not have such a high gap between our prices and our competitors' products."

So my question to him was, "If you're so concerned about your prices and giving the customers some relief, why does it have to come out of MY pocket and not yours?"

Still waiting on the answer...

But, at least I'll give him credit for this. He stood up in front of a room of 300+ brick & mortar retailers of his product and said that the decision was completely his and he wasn't going to change it until the economy improved. That took some serious guts.

Is there a lesson in this? Stick to your guns and hold your resolve in the face of adversity? Be prepared to answer your critics? It's not a good gesture unless you share in the pain?

I'll let you decide.

-Phil

PS We didn't do the discounting. It's a premium brand that doesn't need discounts to sell, just good, smart sales people who know the value of the product. Oh yeah, our sales are up 28% with them ytd.

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