Small Business Revitalization Blog

Pricing is the most common element to be adjusted in the marketing mix during recessions. Why? Because on the surface the price is what potential customers are responding to. However, research into consumer behavior trends has shown that changing other areas of the marketing mix (ie product, promotion or placement/distribution) can be much more effective!

Your pricing strategy impacts your long-term positioning and image. Becoming known as a discounter during the recession does not position you for a strong come-back when the economy starts to recover. Here’s three things to try instead of discounting your prices:

1. Understand your client! If a client asks for a discount, delve deep into what they are really trying to achieve. Instead of offering a flat discount, you could add additional value for the same price, decrease the product/service offer to more closely meet their needs (ie align your offer with their preferred price). Alternatively use a differentiation strategy: if you are the expert and they really need you – stand firm on your pricing. As Warren Buffett remarked:  "Price is what you pay, value is what you get." Know the difference and communicate it to your clients once you know what they really want from you!!

2. Innovate… If you only offer a ‘first class’ price, introduce a business class and economy class version of your service or product. Do whatever it takes to get prospects on side and the money in your pocket instead of your competitors. Sometimes, instead of upselling, you may need to ‘downsell’ to get the sale. Remember, all value is relative! Create value at multiple levels – redesign your offer to suit the market’s current needs. (I’ve just done this – very soon you’ll be able to purchase business coaching in one-off 15 minute packages – much more affordable but still with the same high quality!!)

3. Avoid profit wars. Getting into a bidding war with a competitor is a sure-fire way to lose your business if it happens regularly. Put a limit on how many times you will re-quote. Put a value on whether business with little or no margin is of any benefit to you in reality (mostly it’s not). Be willing to say no! This is tough to do in tough times, but unprofitable business deals will drive you out of business faster than a lack of business will – never make a loss upfront unless you have a strong backend or strategy for achieving repeat sales at a profit!

What is your biggest challenge around pricing? Share it in the comments section below. If you need to discuss more than just a comment, call the Revitalization Experts for help!

Most people jump in without knowing why they are using a specific social networking site, don’t know what they want to get out of it, don’t know how to use it effectively, and then say ‘it didn’t work for my business!’ Here are five uses for social media which will help your business grow…if you effectively strategise your actions and interactions!!

1. Building profile – for many small business owners, you are the brand – represent yourself well!
2. Building relationships – engaging two-way interaction is essential – learn to listen.
3. Educating prospective clients – offering new information, insights and ideas will encourage quality lead generation to occur over time.
4. Market research – be observant, find out what's important to your target audience right now...
5. Creating collaborations, joint ventures and partnerships with complementary businesses.

For another 50 ways to use social media, see this great list from Chris Brogan.

Want to see how my strategy plays out?  You can connect to me here:
LinkedIn:  http://www.linkedin.com/in/enrichedenterprises
Facebook: http://www.facebook.com/people/Lisa-Murray/1469693584
Twitter: www.twitter.com/ReviveCoaching

What else have you done or seen that can make social networking effective for businesses? Share it in the comments section below. If you'd like some coaching on marketing strategies, call the Revitalization Experts! 

 1. Competitive pricing – where you study competitors pricing and align your pricing around your competitors price, depending on how you position your products and services.

2. Cost plus mark-up – Instead of considering competitive pricing, review your own cost structures – if you are more efficient than a competitor you may be able to price lower and offer products of similar quality, or you may be able to enjoy higher profit margins! Be careful to ensure that your pricing is in line with customer expectations or you may not find yourself in a competitive position.

3. Loss Leader – a common marketing strategy where a desirable item is sold at or below cost to attract new / more customers. Combine with an up-selling or cross-selling strategy to achieve profits short term.

4. Overstock pricing – Excess inventory can be sold at a strong discount to avoid storing or discarding it. Useful when you need to minimize losses. Inventory management is a higher priority than profit if you are using this strategy. Overstocks can also be used as a loss leader.

5. Bundling and quantity discounts - Reward customers for bulk purchases by offering quantity discounts or bundling complementary products. Bundle overstocks with popular items to avoid overstock sales. Bundle a new product with established products to build awareness. This is a great value-add strategy.

6. Membership, loyalty programs or trade discounting – Knowing what an A+ customer looks like for your business can help you segment and attract business from profitable customer segments by offering special prices. You can use selective discounting, percentage off savings or other rewards to keep these clients loyal.

7. Versioning – This strategy is very useful for services and technical products. The same basic product or service is sold in a number of versions. This is where you see free trials or basic versions available very cheaply. Consider adding upgrades, additional services or risk management type products (eg warranties, insurance etc) to your base product.

There are many more pricing options to consider, however these are good basics to consider when deciding how to price your products and services. Next post we’ll consider how to maximize pricing during a recession.

What is your biggest challenge around pricing as a small business owner? Share it in the comments section below. If you need to share more than just a comment, call the Revitalization Experts!

Okay, its confession time... I've been a little slow on getting into both twitter and facebook as I saw them as time-wasters rather than business builders.  I suspect my perspective is in the midst of an about turn.  Here's why...

I started playing with Twitter and realised I could send my tweets to my website - follow me on twitter from my website... and then I realised if I followed interesting people that I could find new great resources for this blog - see this great twitter talk by Evan Williams (twitter founder) at TED 2009... and now I'm finding ways to share my expertise with a wider business audience with a site whose users all have the common purpose of getting the most out of their social networking activities... check out my latest social networking adventure here...

How much fun can a curious business builder have in one day?  Clearly this is just the beginning.  If you want to take this journey with me, follow me on twitter at http://twitter.com/ReviveCoaching - So far, so tweet, right?

Now for the Twitty bit - posting what you had for breakfast, your bedtime or any other inane details from your daily life are unlikely to award you a loyal following... this is the reason I didn't use it in the beginning -  was seeing far too much of that  and didn't want to bore my followers silly  (in fact early on the only tweets I made were "automatic" -  I linked my Ezine Articles to automatically upload to twitter!).

My top 3 business coaching tips for using twitter effectively are:
1.  Link to interesting content (find ways to share your knowledge).
2. Know which keywords you want to be found for and tweet about related subjects, using those keywords (you'll attract followers interested in your topics).
3. Be generous, retweet information you know your followers will be interested in - even if it comes from a competitor!!  (Karma is big online!!!)

Have fun...it's a simple way to build your list...
Lisa

P.S.  New to twitter?  Use the help guide.

+ What feedback have clients and prospects given on my pricing lately? (Were they overwhelmed by the great value offered, or were they arguing over the bill?)
+ What is the value I am delivering compared to competitors? Where is my pricing compared to competitors?
+ How do I want to position my products or services? As really amazing value for money or at the higher end?
+ If clients are asking for discounts, have I negotiated on what I'm offering them, rather than on my profit margin or prices?
+ If you are changing your pricing consider: What will be the impact on sales volume? What will be the impact on profit?

What is your biggest challenge as a small business owner? Share it in the comments section below. If you need to share more than just a comment, call the Resuscitation Experts!

Talk about being caught between a rock and a hard place!  What is a smart business owner to do?

The bottom line is that action without a plan will send you round in circles faster than a one-armed canoeist! Whether it is a business plan, a project plan or a ‘to do’ list of daily priorities, it is essential to have a written reference point that will keep you focused and motivated. (By the way – your business plan needs to be strategic and action focused - forget 50 or 100 page doorstoppers – make sure you use a 5 page “door opening” business plan instead!).

Management guru, Peter Drucker got it mostly right when he contended: “Plans are only good intentions unless they immediately degenerate into hard work.” Once you have a plan, you have goals and parameters for action – whether or not you make it into hard work or easy work is up to you!! The important thing is to take action.

You can use your plan to:

• Stop chasing ‘shiny new objects’ – you know what you need to focus your energy on to be successful.
• Identify and remove inefficiencies, tolerances and frustrations – and watch your productivity increase!
• Leverage the right opportunities and say no to the opportunities which don’t fit your plan.
• Prioritise daily actions that will make the biggest difference to your business success – stop running from crisis to crisis.
• Recognise and address the constraints and gaps between where you are now and where you plan to be in future.
•  Minimise procrastination and maximize motivation as you see results from your focused efforts.
• Create stability and sustainable decision-making practices in your business.

Most importantly, using your plan, you’ll quickly move closer to achieving your vision – with less effort, less mistakes, less resources and less time – all because you planned for success!

What is your biggest planning challenge as a small business owner? Share it in the comments section below. If you need to know more about door-opening business plans, call the Revitalisation Experts!

Today I’m going to challenge your thinking. To lift the lid off the box you’ve been working in. To create new possibilities for your business, and most importantly, to help you unlock your business potential by finding more time for you to focus on what really matters.

So, why do so many of us feel we don’t have enough time? After all, everyone gets the same 24 hours, 7 days a week, 52 weeks in a year. So how do some people achieve amazing outcomes seemingly effortlessly, whilst the rest of us slave away, working harder and harder and getting further and further behind?

As a business coach, I get to observe all sorts of business owners and many approaches to managing time. What I’ve observed is that the most productive and effective business owners aren’t managing time – they are managing priorities! Time management is a myth!! It is activity management that really counts. So, here’s three less obvious but simple ways that business owners can find “more time”.

1. Plan ahead and prioritise according to your plan.
2. Use systems, structure and routines to free up valuable time.
3. Practice extreme self-care - put yourself first and you'll be in peak condition to perform at your best.

What is your biggest challenge as a small business owner? Share it in the comments section below. If you need to share more than just a comment, call the Revitalisation Experts!