When money is tight, people have tendency to look for “added value” and “deals” to justify or incent them to spend money. This strains business owners as they cope with the concept that they have to adjust their pricing downward, add discounts or incentives, or throw something extra in to simply entice the buyers to purchase. The strains put on businesses resulting from this shrinkage in disposable income and discretionary spending are apparent everywhere.
How does a business create interest and value and increase sales without giving away the store or diminishing the brand?
1. Do not discount your pricing: Most businesses react to tough times and economic challenges by lowering or discounting their prices. When they do that, they diminish their brand and they put themselves in a situation where they will eventually need to raise prices anyway. Hold pricing firm and get creative elsewhere.
2. Thank and reward your loyal customers: Offer loyalty cards or special incentives to your most loyal customers. Most businesses make 80% of their revenue with the top 20% of the customer list. Reward your top 20% customers with added incentives to keep purchasing from you. Even if you start your loyalty program now, find some way to retroactively calculate loyalty points that can be redeemed and leveraged today. This is a great way to say “thanks” and provides them with an incentive to stay with you versus switching to a cheaper source.
3. Keep the customers you want: This goes back to loyalty and value. Everyone has great customers and bad customers, profitable business and unprofitable business. Keep your good and profitable clients. This does not necessarily mean discounts. This means negotiate a program with them that is a win-win for both businesses. In this environment, businesses are looking for resources who are committed to helping them deal with their challenges. Find out what some of you clients’ challenges are and uncover how you can help them. Add or link that solution to your offering going forward. This enhances your value and better connects you to your valued clients.
4. Be real: You cannot expect to maintain the same level of volume during this economy. More customers, or even the same customers, and heavily discounted prices is not going to help you. Keep in mind that the economy has shrunk by about 40%. Adjust your expectations and build from there. Remember, the “road to hell is paved with volume.”
In summary, the challenge for all business owners is to find ways to be creative with their offerings and with their client relationships. Focus on the business drivers of your clients. Engaging them at their point of pain and frustration and searching for ideas and solutions that assist them is where you need to start. Too often we focus on what we need to “sell.” In today’s environment it is not about us, we need to think of the motivations and needs of our clients. When we start there, the opportunity to generate revenue for our business is enhanced.