Have you seen this…?
I have to admit, this one is hard to fathom…
In a recent report (shared by Unstoppable CEO Elite™ Member Procter McInnis), Jos. A. Bank—the men’s clothing retailer—lost $1 BILLION (yes, with a “B”) in the last quarter of 2015.
JUST THE LAST QUARTER!!!
It’s how they did it that’s useful for you…
If you’re not familiar with them, Jos. A. Bank sells what appears to be higher-end men’s clothing. Prices are average to slightly above average.
They’re not a luxury brand, but closer to that end of the market than the bottom.
So what’s the problem?
They used to run big sales a few times a year and by big I mean, buy one suit at full price and get one (often two) free.
But here’s the problem:
When you TRAIN your clients to wait for the big discount…they’ll comply!
So to get traffic into the stores, they had to do more frequent and ever more outrageous discount deals…
For example…buy one suit at HALF-PRICE, get two free. (What?)
Do enough of that and your clients just sit…waiting for the next, ever more attractive deal and…
You lose $1 Billion.
I say the root of the problem is laziness, because instead of orchestrating a system to sell great products at a premium price (which takes some thought, creativity and work), they decided to simply slash the number on the price tag.
That always works for a time, but it attracts bad clients and kills profit.
So…lazy on the front end = BIG HOLE TO CLIMB OUT OF on the back end…
And, a little work on the front end to create the conditions required to sell at premium fees = long, prosperous future with great clients.
You get to pick.
For an ongoing, deep and practical conversation (including detailed examples of real businesses orchestrating their own systems for extracting premium fees) I recommend you subscribe to The Unstoppable CEO™ CONFIDENTIAL.
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photo, originally in color, courtesy of: Elvert Barnes