In January, J.C. Penney’s CEO Ron Johnson announced that the retailer would withdraw from non-stop low price promotions and instead switch to a “Fair and Square” everyday pricing strategy. Products will now only have one price-tag, prices will end in 0 instead of 99, and price categories will be separated into three standards: every day, monthly value (e.g. back to school sales), and clearance.
A recent article on businessweek.com pointed out the risks that come with stepping out of the constant race to offer the lowest prices when it does not go along with enough product differentiation. However, consistent pricing can go along way when it comes to engaging customers. Here is how:
- Consistent prices provide predictability. Customers who constantly have to fear buying a product too early and regretting it when the price comes down even more will likely be frustrated sooner rather than later.
- Prices that don’t perpetually compete with market lows reflect a company’s confidence in its brand. When it comes to qualifying prospects, J.C. Penney’s CEO Ron Johnson has learned this lesson during his time at Apple.
- Marketing efforts can now shift to product differentiation and clarifying messages instead of constantly focusing on price promotion. This will elevate brand awareness and customer loyalty.
Autumn Consulting is a Milwaukee web marketing agency specializing in search engine optimization, web site copy writing, social media, and email marketing.
