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All you believe…may be ALL WRONG – Belief #5

Misconception #5 – Lower Your Prices and Make it Up on Volume

(Read time approx. 3 minutes.)

This is the fifth misconception in a series of six. The concepts being discussed here will likely be counter to your beliefs. The comments left on the previous posts are quite interesting so you may want to go back and read them. Click HERE to go back and begin with the first post related to this series.

Possibly one of the greatest travesties to befall the independent garden center as an industry is the fallacy that if you offer lower prices you will “make it up on volume”.

This is what I  call Fifth Grade Economics. The general level of knowledge about economics in our industry was learned in fifth grade social studies class. In my fifth grade class Mrs. Woods taught us about supply and demand, and how if you lowered the price you would “make it up on volume”. Unfortunately this same macro-economic principle has been perpetuated in higher education and has not been balanced with understanding of the micro-economic application in an independent garden center serving niche demographic and psycho-graphic customers.

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The Customer Segmentation Gift

The Gift (multiple)

The Gift of Each Customer Comes in Many Sizes

The gift of today is the customer who finds your company and your products engaging today. They come to you for precise reasons, sometimes precisely different each time they arrive. What is it today?

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Use and Enjoy, or Own and Enjoy?

judy-stapler-100x100-low-res

Guest Blogger

Judy Stapler, Qualitative Insights

“Times have changed. Today people are more interested in what they will use and enjoy than they are in what they will own and enjoy.” Judy Stapler 11/08

You don’t need me to tell you how stressful it has become to live in this great country. While we serve a broad range of consumers, disposable income is becoming a thing of the past and every purchase can now be a major decision for some of them. Gas up the car? Buy food? Keep the home at a comfortable 70°– 72° or a more efficient 65°? Buy the art object or new car we’ve admired for months (now at a greatly reduced price) or decide to spend for something you can actually use. The net effect of this is that consumers at all income levels make decisions more purposefully. It is my opinion that come spring, we will see more people choose to buy those items they perceive that they actually need and can use and enjoy immediately rather than those they simply look at and enjoy owning over time.

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