Omar Zenhom built two multimillion-dollar companies through recessions and says the biggest mistake entrepreneurs make is cutting prices. Price cuts signal desperation or reveal you were overpriced to begin with. When competitors drop prices, holding steady makes you look trustworthy and different, keeping you top of mind when customers cut vendors.
2 of my most successful multimillion-dollar businesses were built out of a recession, and one of them went through 2 recessions. And this is the move that most business owners get wrong, completely wrong in a recession. They cut prices. They think, "Hey, customers are just tending to spend less. So if I lower my prices, I'll keep more of my customers." Do not do this. Cutting your prices in a recession is one of the most damaging things you can do to your business and your brand. When you cut prices, you signal one of two things to your customers. Either that your prices were too high to begin with, which destroys trust and makes them feel like they got ripped off, or you are desperate. Both are disastrous. Everyone's prices are going up during a recession. This is an opportunity for you. So when you come to them and you say to them, "Hey, we know times are tough, and this is why we are not raising our prices. We're holding our prices the way they are." you become remarkable. You become somebody who cares. And it's a differentiator. You're top of mind. You're the last one they're going to cut.
