This issue we’ll talk about one idea for getting higher prices that will likely surprise the heck out of you, and about value pricing.
One shocking tactic on when to raise prices
What should you do when a competitor has a big sale? Gut instinct might cause you to also lower your prices — for fear of getting little business during the sale. However, if it is a time-limited sale, you have other options.
If the sale is big enough, you can assume that almost all of the price-sensitive buyers in your market will be buying your competitor’s products for the length of the sale. Which means that the people who will be buying your product are doing so because they are both loyal to your product and not very price sensitive.
So… perhaps this is the time to raise your prices!
It won’t cause you to lose any comparison-price-shoppers, because you will already have lost them for the duration of your competitor’s sale. And the extra profits from your loyal customers can offset your lower unit sales for this period. In fact, you might find you make just as big a profit with far fewer sales.
Of course, this is not a long-range strategy, unless you reposition your products. But it can smooth out the bumps of an aggressive competitor who is fond of short-term units-sold increases from price promotions.