Creating a clearance sale culture

If you want to avoid being stuck with inventory or downtime during a recession, you might profit from realizing that people tell themselves a different story when they go to buy something.

During good times, we wonder, "can I get this house before the price goes up or someone else snatches it?" or we think, "my time is really valuable, it’s okay if this is a little more expensive than the store down the street." Businesses think about getting the invoices in before budget closes, or making the boss happy.

In our current times, people tell themselves the story, "I got a steal!" If it’s not a steal, they wait.

You can’t just lower all the prices in your operation. There are two reasons this doesn’t work. First, you no longer communicate the story of ‘special deal’, instead you communicate ‘we’re in trouble.’ Second, you end up charging everyone a lower price, even the people who were happy to pay more–who wanted to pay more, in fact.

Important distinction: if you say to someone, "if I give you a discount, will you buy it?" the answer will almost certainly be no. No, because lowering the price is almost never sufficient to change non-interest into interest.

So, empower your staff, all of them, to take 10% off the price of anything if someone asks or seems concerned. "Oh, don’t worry. I’ll just take $20 off the price of the room if you can book it now." For retailers or personal selling situations, you can give your staff a pile of "manager’s coupons" that they can just whip out… peel one off and quietly hand it to the waffling customer. It needs to have a date on it, probably hand written. Even better, let them write in the discount (up to x%, and of course they’ll always write x, which is fine, because that’s what you planned on.)

Is this something you want to do? Probably not. Almost certainly not. But it might be something you have to do. The alternative are shoppers who walk out of the store and leave you with nothing.