Rebates and pricing

I've just bought a digital SLR camera from Canon and it has me thinking about pricing. Canon is offering a $100 rebate if you buy before August 1--hmmm, just about the time the new Sony SLR camera is planned to ship, the one I've been waiting for. So, for basically the same price, I can get a "better" camera sooner. Sounds like a good deal! Canon has used a rebate to offer predatory pricing without reducing the actual price of their camera. Good combination of competitive intelligence and pricing strategy.

The camera is a delight but the rebate process is troublesome. I think I've spent an hour getting all the paperwork together. Do they make it difficult on purpose? Yes, I think they do! The $100 incentive helps one decide to buy yet they don't actually have to pay the $100. So they make an offer (like the Dr Scholl's guarantee) and then make it difficult to receive the offer (like Dr Scholl's--did you keep your receipt? And can you find it six months later?) And I still fear that I've done something wrong and will get a "so sorry, you messed up" response from their fulfillment service.

Coupons and rebates are methods of offering different prices to different personas. Those who are price sensitive are beguiled by the option while those who aren't don't care either way. The offer is effective before the sale but somehow less relevant after the sale. It's buying versus using criteria.

Can we use this technique in B2B? It certainly seems to affect the B2C sales cycle!

Steve Johnson

Steve Johnson

Steve Johnson was a founding instructor at Pragmatic Institute, a role he held for more than 15 years before he left to start Under10 Playbook. In his return to Pragmatic Institute, Steve supports the complete learning path for product teams, ensuring they are fully armed for success. 

Over the course of his career, Steve has helped thousands of companies and tens of thousands of product professionals implement product management processes. He has worked in the high-tech arena since 1981, rising through the ranks from product manager to chief marketing officer. Steve has experience in technical, sales and marketing management positions at companies that specialize in both hardware and software. In addition, he is an author, speaker and advisor on product strategy and product management.

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