Assuming that we are Toyota Company, in order to maintain the positive profit, we need to follow these five ways to keep cash flowing consistently into the business. First, we need to know our expenses. Although discounting can help us attract new customers, selling anything at a loss will not generate a positive cash flow. If do the discount for the customer, we need to know the costs and impacts of what we are offering and be prepared for the fallout.
Next, even though discounting is always our choice, adding value is. By creating bundles of products or services, for instance, we can inject tremendous amounts of perceived and tangible value into their offerings for very little cost. To illustrate, we will not only does that type of offer help allay a major concern or frustration customers have, like paying for a breakdown or time lost at the dealership, but we will also offers real value in terms of limiting out-of-pocket maintenance costs. Therefore, we can increase the price point initially since we are helped lower a perceived risk by offering something as basic as a guarantee.
Thirdly, we have to create a back-end service, for example, if we realize that our initial offer to reel in new customers won’t be profitable, we will find ways to create higher price points on back-end products or services. Fourth, we are going to encourage a repeat business. To put it simply, we will consider a loyalty program such as VIP offers and other frequent-shopper programs, which can be ideal vehicles for systematizing repeat business.
Last but not least, we will have a pre-sale period since consumers can plan for their future or get a jump on shopping and we will offer to take old, outdated products back at a pre-arranged price.