How Do Extremely Low Prices Springboard You Into More Business And Even Bigger Profits?

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How Do Extremely Low Prices Springboard You Into More Business And Even Bigger Profits?

Ladies & gentlemen, how many times have you seen this all too familiar, (flat out) bloody scenario play out, to it’s predictable conclusion?

That is two or three extremely savvy, yet major competitors, start dramatically (and almost) relentlessly slashing prices,until their overall gross profit margins are so razor thin, they ultimately go belly up!

Or worse yet, they’ve sort of confined themselves to this self imposed box called “discount pricing” and now, try as they might, it’s almost virtually impossible to escape!

Simply because they’ve indirectly trained their best and most loyal repeat customers and or clients, to expect huge savings, on their best products and services!

And now they’re literally terrified of raising prices, for fear of losing them permanently to their major competitors!And or new competitors.

Sad right? So they invariably end up in this race to the bottom, until eventually, simple economics forces them to close their doors!

So while it’s certainly smart to periodically “discount” your prices, who can actually afford to price themselves right out of business? On the other hand, let’s take a look at “how” strategic pricing, can and most definitely will springboard you into more business and even greater profits!

So How Does Extremely Low Prices Actually Springboard You Into More Business And Even Bigger Profits?

First of all, ladies & gentlemen, have you noticed how (practically) every time, an extremely savvy business owner and or service provider, can combine having fixed operational cost against variable profit producing activities.

How much more gross profit they tend to create?

For ex: most unsuspecting depositors, still haven’t quite connected the dots, when it comes to their local banker tying their hard earned money up in a CD (Certificate Of Deposit), for (say) three years.

While simultaneously re-loaning that exact same depositors money, (say) they deposited $10,000 dollars in a three year CD.

That extremely savvy banker and or credit union is simply re-loaning that exact same $10,000 dollars of depositors money, to another customer and routinely charging them anywhere from 6- 18% per year to do so! 😎 And pocketing the gross difference in interest rate charges!

Plus, being paid modest monthly service fees, in order to keep track of it as well! 😎

Now let’s say they get into a price war with another local bank and or credit union!Which means, both or all three institutions start dramatically lowering and counter lowering their current interest rate charges.

Until ultimately, the last bank or institution to lower the interest rate they’re charging their customers to borrow money, is now the exact same rate they’re paying their customers on their three year CD’s!Huh?

So in other words, they borrowed money at 3% interest for three years and they immediately turned right around and re-loaned the exact same $10,00 dollars to another depositor, for three years at the exact same interest rate of 3%!

To the unsuspecting (non business owner) types, they’re led to believe the bank or financial institution has merely broken even on the transaction, correct? However, every body in a profit seeking business, readily understands, they’ve haven’t come close to actually breaking even!Have they?Huh?

All they’ve merely done is net out on their cost to borrow money!Say what?

So Where Is The Advantage To Be Gained By Slashing Prices To The Point Of A Net Zero Interest Rate Charge?

Entrepreneur, “if” you’re still having any trouble coming to grips with the fact that, you borrowed $10,000 dollars (or X) amount of money for three years and agreed to pay depositor (A.) 3% interest for the temporary use of their money.

And you immediately turned around and re-loaned that exact same $10,000 dollars ( or X) amount of money to depositor (B.) and you’re charging them 3% interest to borrow the money!

Entrepreneur, unless something really smart changes dramatically fast! Your goose is pretty much cooked!Say what?

Because, if you’re a bank and or credit union, you’ve still got to somehow cover your monthly lease to rent that really nice building your office is in, correct?

And what about the outrageous monthly air conditioning bill you incur during the extremely hot summer months! Both your valued employees and customers won’t tolerate being uncomfortable in an office that’s usually hot will they?

Or what about the freezing cold winter months? Who’s gonna bank or work, where the office is routinely freezing cold!

And the last time I checked, your bank President, your tellers and all that paper work cost money, did it not? So if all you’re doing is netting out on the interest rates, where does the money come from to cover the monthly expenses of running and growing/ the business? )

That’s the main reason, there has to be a major difference between the rates they pay depositors and the rates they charge borrowers!Right?

Now, let’s see “how” so called strategic low pricing, can and so often is, the literal springboard into more business and even greater profits!Instead of a race to the proverbial bottom!

So How Do You Leverage Strategic Low Prices So That It Makes Total Economic Sense To Do So?

One of the simplest examples to give you, in order to effectively demonstrate the real long term marketing strategy and mindset, behind this particular“madness”, is to show you “how” and “why” luxury cruise ships and other extremely savvy entrepreneurs, such as college football and or college basketball associations, routinely do the following!

Let’s take any major luxury cruise ship business of your choice! And let’s say they decide to trade $30,000 dollars, (or X) worth of unsold cabins, to a local TV, radio and or magazine owner of some kind.

In exchange for at least $30,000 dollars worth of advertising space and or air time etc.Well, at first glance, (at least) to the totally unsuspecting, it looks like both parties have merely broken even, have they not? After all, where’s the profit if you trade $10,000 dollars worth of X, for $10,000 dollars worth of why Y?

Think about it for just a second. If a luxury cruise ship has some unsold cabins, (may be) it’s due to a nagging recession! Anyway, if they can just manage to literally break even and or come extremely close to just covering their hard  cost of those unsold cabins, and they trade them to some high level executives that happen to work for (either) a local TV, radio and or newspaper/magazine etc.

If that cruise ship is worth it’s salt, you can bet they’ve probably got a mini casino on board! Right?And they’ve got a really fancy gift shop, stuffed with some really fabulous overpriced stuff, that cruise ship customers love!

And they most definitely have a delicious food court and open bar, right? Absolutely! Which means entrepreneur, even if that unsold cabin cost them $100 dollars per day!

There’s a very chance, the occupant of that cabin, (especially) if they’re a high level executive and or six figure a year income earner or up!

They’ll routinely spend more than that, per day while they’re on board correct?So it only makes sense for the cruise ship to give or trade that cabin, and cover their basic daily cost and reap the benefits of the high income passengers having the time of their lives, correct?

And the same holds true for a college football or basketball seat! So what if they routinely giveaway X number of seats, at either cost or free!

They’ll more than make up for it with the outrageously overpriced beer and hot dog sales!Don’t you agree? So now, hopefully you can see and appreciate, “how” strategic low prices can not only lead to more business, but even greater long term profits as well! Correct?

Because don’t forget, while they’re having the time of their lives, they’be constantly tweeting, texting and posting both pictures and videos all over social media!Right?

Not to to mention telling and bragging endlessly to friends, family and colleagues all about it, for years and years to come!Don’t you agree?

Now as is customary during this part of our show.

Please share your extremely valuable comments (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!

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