ARTICLE TEXT:
ARTICLE
TEXT:
"SALES"
AND DISCOUNT FATIGUE
It
had to happen.
The
actions of businesses, retailers in particular, have pushed
consumers and clients to a tipping point. Sales and discount
fatigue is in evidence everywhere. That is a new phenomenon.
Consumers
now state that the appeal and allure of more and bigger
discounts are marginal. Those savings will be readily accepted.
However, only 31% of adult consumers in a recent Australia-wide
survey stated that they would buy more if offered a further
40% off the already discounted prices.
ENOUGH
Enough
is enough! Too many businesses have shown their hand and
the stack is lacking an ace card. Price is not the overriding
issue in determining and influencing the volume of marketplace
demand. Utterances by leading high profile retailers about
price deflation is compounding the complexity of a brittle,
volatile marketplace. Declining price structures are enough
to induce consumers to delay purchases... and to be financially
rewarded for doing so.
Significantly,
consumers openly declare that they do not feel happier,
more satisfied or have greater brand or business loyalty
because of recent purchases which were concluded at greatly
discounted prices, often up to 40% off normal. Rather, there
is a sense of unease, which is difficult for them to explain
or to express.
In
short, current practices are not establishing or sustaining
a “win-win” sense of well-being.
Packaged
offers of “two for one”, “buy one, get the second at a discount”
and similar are not achieving incremental sales, enhanced
customer satisfaction or greater loyalty.
Some
will defend the practices with the contention that revenue
levels are being defended and sustained. There is no credible
evidence or basis on which to found those beliefs.
Short
term, reactionary initiatives do and can have profound implications
and ramifications for brands in the intermediate and longer
term.
A
REALITY CHECK
Business
people have been slow to recognise and effectively respond
to the new consumer mind set.
Bold
banner headlines of “30, 40 and 50% off” hold little credence
with most consumer groups. Conversely, full or normal retail
prices are considered “irrelevant” “premium” or “unrealistic”.
One
structural change which has been effected by the consequences
of the Global Financial Crisis (GFC) is that references
to “discount” and “40% off” are misleading. The reality
is that the current discounted and sales prices are now
the “new price”. Astute leaders will quickly accept, grasp
and utilise that new paradigm.
RECOMMITMENT
TO SERVICE
Since
the onset of the Global Financial Crisis, competitors of
all sizes and hues have felt compelled to match the rampant
discounts on offer, often by major duopolistic national
and transnational entities.
It
has proved to be a fruitless exercise, lest one enjoys and
accepts unprofitable profitability. Emphasis has been places
on cashflow, rather than sustainable margins, brand integrity
and valie. The greater resources and deeper pockets of the
few leviathan have ensured that advertising, marketing,
promotions and price advantages lay with the few and the
big.
One
of te viable, attractive and compelling competitive advantages
available to the multitude of small and medium sized enterprises
resides with exceptional customer service.
The
challenge is how best to entice customers and clients to
deal with an individual business to enjoy the benefits and
advantages of personal service. Fundamental to addressing
that reality is the recognition, acceptance and deployment
of the new nature and characteristics of service excellence.
Most
important, the service promise begins with a striking and
responsive presence on-line. Far too many businesses around
the world have no, inadequate, static or a boring presence
on-line. In the contemporary world, that speaks volumes
to discerning, demanding, time-poor and communicative prospective,
existing and past clients.
Service
expectations and experiences begin and develop from the
first point of contact.
This
underscores the fact that an overwhelming majority of customer
service initiatives and training are ineffective and irrelevant.
The issue is not the process, but rather the expectations
and the outcomes that determines customer satisfaction.
Little
wonder that customers and clients repeatedly declare:
“You
don't understand”
