Is cutting prices always a good option to attract more customers or clients If you say it is well then you have to think again Harvard Business School suggests that you reconsider if you are tempted to cut prices because You dont want to give away your profit margin to customers who still would have paid full price Cutting prices or discounts have been an option for many businesses because of the economic slowdown Small business owners through various means such as custom catalogs flyers etc are announcing that they have lowered their prices Business owners who are struggling are resorting to price slashes to save their businesses But is discounting really necessary Well experts suggest that it might be if all available options have been exhausted such as offering extras or stepping up quality of services However you have to know that slashing prices are not without risks Discounting may cheapen a brand image and as a result customers will not pay for its full price again So if you have decided to print catalogs offering major discounts consider its full impact to the business and your long term goals Yes discounting will probably solve current liquidity problems but you have to consider and think about its long term effects If you intend to stay in the business which is often a primary goal among business owners then you have to weigh your options A successful discounting strategy takes a cursory look at what your competition is doing You have to do a market research of what others are doing and what is the extent of their price cuts Then you analyze your companys previous experience with price slashes Can you afford it How willing are your customers to buy at discounted prices These are some questions that you might want to ask yourself Better yet if you can afford it engage the services of a research firm to gauge customer response to proposed price cuts This will make decision making easier and less risky That is before you print catalogs on discounts study customer responses carefully Just be sure to avoid the common pitfall of discounting which is sacrificing quality or service to lower prices You do not want to have the reputation of poor quality because its hard to recover from that This leads you back to the earlier question Is it really necessary to cut your prices