General Motors once made headlines with a bold promotion: they offered the public the same "insider" employee pricing they'd been offering their own staff. The response was huge. Vehicles flew off lots. Competitors scrambled to match it. Ford followed suit almost immediately.
And then there was Toyota. They looked at the same market conditions - and raised prices on certain models.
I've thought about that story many times over the years when talking with florists about pricing strategy. Because the question it raises is directly relevant to every flower shop in the country: when the pressure is on, do you follow GM or Toyota?
The logic of discounting feels sound on the surface. Lower prices equal more sales, right? But follow that logic to its conclusion and you arrive at one of the saddest phrases in business: "We lose a dollar on every sale, but we make it up in volume."
Your goal is profit, not volume. If you can earn $10 on one arrangement, why earn $5 on each and have to do twice the work? Cutting prices is the path of least resistance in marketing - it requires almost no creativity and no real understanding of what your customers value. Any shop can mark something down. Not every shop can make a customer feel that a premium price is worth paying.
There's also a longer-term problem: once customers expect a discount, they wait for it. You train them to hold off until the next sale. Your regular price starts to feel like the inflated number before the deal. That's a difficult cycle to break. It is not in your best interest to be in the “mark-up, mark-down, price gymnastics game.”
Competing on value doesn't mean ignoring price entirely. It means giving customers compelling reasons to buy that have nothing to do with a markdown.
Here are approaches that protect your margins while still creating excitement:
Free gift with purchase. Bundle a small add-on - a single stem, a candle, a packet of flower food - with a qualifying purchase. The customer perceives real added value. Your cost is minimal. Your margin on the base arrangement is untouched.
Two-for-one on selected items. Rather than discounting everything, pick specific items you've bought at favorable wholesale prices and pass along the savings on those. You control which products are involved, protect margins on your core arrangements, and still deliver a compelling offer.
Early order incentives. For major holidays like Valentine's Day and Mother's Day, reward customers who order in advance. The incentive isn't necessarily a lower price - it's the guarantee of availability, priority service, and peace of mind. Many customers will pay more for certainty than they will for a discount.
Loyalty recognition. Your best customers - the ones who call for every birthday, anniversary, and sympathy arrangement - don't need a discount. They need to feel known and appreciated. A handwritten note, a complimentary upgrade on a design, or a "we remembered your anniversary" call goes further than 10% off. Clients remember how they are treated and how you made them feel.
Unsure if you're using up-to-date pricing models? Here's a guide to pricing with confidence.
Here's where the GM story has its sharpest lesson for florists. Most GM dealers ran the promotion, sold a lot of cars, and then did nothing to bring those customers back. A promotion brings people in the door once. What happens after that depends entirely on whether you've built a relationship - or just made a transaction.
The same is true for florists. If you run a special and don't follow up with an email, a direct mail piece, or a personal outreach, you've paid for a one-time sale with a compressed margin. You haven't built a customer. The most important part of the sales process is follow-up. This can be a real-time delivery confirmation, a personal phone call for a special delivery service order or a quick call to confirm their special order flowers arrived and will be ready for delivery or pick up.
Value-based marketing works because it creates lasting reasons for customers to return. Every current sale is an advertisement for the next sale. Your brand, your quality, your service, your relationships - these are things no competitor can match just by cutting their prices. Anyone can sell it cheaper. Price is easy to copy. Experience isn't.
Toyota's approach worked because they knew exactly what their customers valued - and it wasn't a deal. They were confident enough in that value to hold the line. That confidence, built on a clear understanding of their customer, is what long-term pricing power looks like. Many automobile dealerships know that one of the most valuable parts of the sale is to have their clients use them for regular service (oil changes, check-ups, tire replacements). This builds customer confidence, loyalty and new sales.
The question for your shop: what do your customers value enough to pay full price for? Start there, and build everything around it. You want to build a “service shield” that is hard for competitors to penetrate.
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