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This isn’t a post about retail shopping, it is a post about discounts and identity.

Everyone knows that JC Penney is circling the drain.  Profits are down and they have a revolving door of CEO’s, none of whom are able to change the downward trend.  First they tried to get rid of discounts.  The problem with that was that their entire value proposition was built on discounts.  Their client base has been trained to look for advertised discounts. When they took the discounts away (even if the standard price was lower than the discount price) the loyal clients stayed away. They also couldn’t bring in a new clientele no matter how upscale they went with their rebranding and store design because they were known as a discount store.  Then they tried to redesign the stores to be more cosmopolitan and upscale, with nice seating areas and classier displays.  That just served to keep the core clients away without drawing in a new crop of customers.

So what can we learn from this with respect to discounts and identity?

I’m not saying that discounting doesn’t work.  With respect to photography something selling weddings you might see slight bumps by throwing a discount here and there because the clients are largely one-time purchasers.  But if you’re trying to attract loyal, repeat customers then a discount doesn’t tell people that you’re a great deal now, it just tells them that your full price is inflated.  It tells the market that the time to buy is when the discount is on.  Now if you’re a wedding photographer that works with chains of friends or gets a significant number of referrals from coordinators the discount method may be something you need to keep up – after all you conditioned them to buy only when the discount was available.  When your company’s value proposition is the discount you can’t get rid of it.

Bottom line is that discounts work in certain situations, but it is hard to develop a different value proposition once you lead with “now its cheaper!” – you just don’t have anywhere else to go.

The second thing to learn is that reinvention is hard, particularly on an identity basis.  Your business has an identity, and it caters to a specific identity.  It means something to work with your company (well, it should mean something if it doesn’t already).  You get to feel like a certain type of person by virtue of where you shop.  That is VERY difficult to change once established.  You can put a different filter on your images, you can try a different posing or shooting technique, but your business identity ought to stay relatively constant.  Changing that identity is incredibly difficult because it means throwing out the people who already believe in you and trying to convince a whole new set of people of your value.  If you don’t know what identity you’re perfect for now then the market is deciding it for you, which is a terrifying proposition.

– trr


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