I’ve coined a new term: “death march selling.” I’m not trying to be morbid, but I have a real concern when I see a company become so desperate to get business, they start making ridiculously low offers to customers. Their objective, of course, is to merely get some business to help carry them through what they perceive to be a bad period in their particular industry.
News of this type of pricing quickly spreads to their competitors. Before long, everyone has cut their price to simply try to hold onto market share. The only thing that happens here is cash-flow changes hands. In the end, nobody wins. Customers think they are getting a great deal, but in reality, they’re being serviced by companies that can’t afford to continually offer that kind of pricing.
The domino effect begins and the company has to make other cuts in service just to survive. Ultimately, the customer begins to suffer. The vendor has covered cash flow problems, but unless they find a way to get better pricing, all they’ve really done is extend their chronically-ill life. This is why I call it “death march selling.” After all is said and done, the weaker competitors go out of business and only the strongest companies survive.