The fast-food industry is one of the BEST examples of the DIFFERENCE in philosophy regarding pricing integrity. When the recession hit, one of the FIRST fast food companies to lower their prices was McDonald’s. They introduced the Dollar Menu. Almost all other franchises soon followed suit. One of the only franchises NOT to introduce a “value menu” was Chick-fil-a. Rather than lower prices, Chick-fil-a stood by their belief. Their belief was to provide a better product, with better service, rather than reducing prices. To make a long story short, Chick-fil-a, in 2010, generated MORE profit in the United States than McDonald’s…

The lesson here is to consider the value that your business adds in the marketplace. McDonald’s made the determination, (whether intentionally or not) that they did not offer enough value at the current cost, to continue charging the same amount as before, or that their customer base was primarily consider with price. Chick-fil-a, on the other hand, was better prepared for the changing marketplace. This was because their business model was better suited to provide additional VALUE without depreciating the QUALITY of their product!

Here are some points to consider for your business:

1. Understand the market, keep in mind that the market is CONSTANTLY changing, and you need to be CONSTANTLY vigilant!

2. Recognize your business’ margins. If you know that it will require certain margins to obtain your goals, you will be LESS likely to reduce price, and MORE likely to add value.

3. Find ways to enhance what you offer, rather than reducing price.

4. Understand your customer base. By taking the time to UNDERSTAND your customer base, you are better able to adapt to changes in the market.

5. NEVER operate out of fear!

If you would like a little help getting started: