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Old 01-10-2013, 01:02 AM   #3133
manticus
Scooby Specialist
 
Member#: 162857
Join Date: Oct 2007
Chapter/Region: W. Canada
Location: Calgary, AB
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Quote:
Originally Posted by chanomatik View Post
You can create customer loyalty on a bargain, though.
Not really.

The problem with "bargains" is that they're:
A) not profitable, and
B) risk losing a lot of loyal customers when prices are raised

So, every year you have a bargain, you get more sales (which can be detrimental to profits if you're losing money per vehicle), and when you end it a large percentage of those customers will not buy again.

Its similar to a price leader strategy - sure, you can sell your stuff to price shoppers for a while and inflate your numbers, but price shoppers are also notoriously likely to jump ship the second your prices go up. Better to produce something at a profitable amount, market its quality, and attract the customers that really value quality.

So what's the result of a "bargain" deal? Lots of unprofitable sales and lots of runoff when the sales end. It's definitely not a good position to be in.
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