Recession Strategy: Add Value

“Wow, are you serious?,” she asked. (She has learned I might be joking at the most inopportune times.)

“Yes, I replied,” not surprised by her reaction, “Giant Eagle is now giving 1% off on your grocery bills based on fuel purchases...it’s Advantage Card in reverse.” 

And it’s a great strategy. My wife immediately added in the details once she thought it through - increased grocery purchases were incentivized by the “Fuel Perks” program that lowered the price of gas when it skyrocketed last year. With fuel prices down, that is probably not as big an incentive as it was. 

I added that the cost of groceries has risen because of the passthrough of those same fuel costs. Competition is fierce in that sector, and consumers are looking for a deal now as much as ever. Checking circulars, looking for discounts, going to Walmart, etc. 

The natural response in any business to a downturn in sales is to discount. Sometimes it is unavoidable...too much inventory against slowing sales, need for cashflow through the business, etc. 

Yet a strategy to consider is Adding Value. I detail it in Marketing in a Downturn but have seen it only rarely in practice in the past few months. Giant Eagle is practicing Adding Value (by the way, I take no responsibility or credit for their strategy...it’s just a great example!). The perceived value of a rebate on the grocery bill for using the Giant Eagle gas station is very high. The real value ain’t bad either! In this environment, 1% off the total bill is a help (and beats spending hours cutting coupons).

There are many ways to add value. Extend warranties. Change terms. Offer extra customer service, support. You may be thinking 2 for 1 offers, and this is adding value (although it is also price cutting), but it is just as easy to add value to an intangible. Offer extra meetings to a consulting package, provide added phone support, deliver extra time or more information.

You’ll know your adding value when prospects and customers react the way my wife did to the Giant Eagle offer. The trick of course is figuring out what would be high perceived value that isn’t truly expensive (and therefore damaging to the bottom line). 

Let me know if I can be of help with that discussion. A fresh set of eyes on the issues can provide new perspectives and uncover opportunities. Email me to talk more, or if you see a great example of Adding Value.

SLE