Harvard Business Review put out an interesting article on price gouging in disaster. It was written during the hurricanes, but their position applies to the tragic events we are experiencing with COVID-19. They point out that instead of raising prices during a crisis, companies are actually dropping prices on essential goods or services in high demand. Seems odd at a time when consumers are “hamster buying,” as folks in Germany and Netherlands are calling it, according to Bloomberg. But avoiding price gouging in disaster is the right thing to do.
Good CX Over Short-Term Profits
While the knee-jerk reaction is to raise prices at a time like this, long-term profits can be jeopardized if a company is viewed as taking advantage of a tragedy.
We applaud the companies that are taking the lead on putting customer experience (CX) first in desperate times. Taking this approach not only helps their customers navigate the unknown, but it’ll also pay off for them in the long run.
Thinking about taking the high road? Consider a Price Optimization solution to alleviate the extensive legwork it will take to do it right. Here are 7 reasons why Pricing Software is helpful in keeping customers’ needs at the forefront during a crisis like COVID-19:
- It can help you determine what products are selling well and should not be discounted
- It can show you where sales were declining before the impact of the emergency, so that you don’t over-discount and miss your desired results
- It shows price elasticity, which determines where you can adjust price specifically by location – and the impact on units in that area
- It can help you plan for cost increases that have not been implemented
- It helps you define and implement best-practice strategies by modeling pricing
- It leverage venues where products are selling at best margins
- It enables your company to avoid price spikes and protect price image