A long-standing client sought out my opinion at the beginning of this year about pricing. It was January and takings were down. Should they drop their prices across the board in the hope of encouraging customers into the shop to spend? I said no.
I think it’s a slippery slope to reduce your prices when there may be other ways to increase sales. It has taken me so long to get my clients to charge what they are really worth, I’m not about to start encouraging them to drop those prices now.
How have you worked out your pricing structure in the first place? It’s about value, right? It’s about what your products and services are worth, not what they cost. A fine distinction perhaps, but the first rule of any business is to seek out a customer base which can afford you, and to know your worth and the value you create in the world.
We all know that times are hard for some people. Equally there are many who are still doing OK, depending on who’s in gainful employment in the household and to what extent their income(s) have been reduced by the global recession. You may be feeling the pinch either personally or in your business depending on how sensitive you are to market forces.
I slashed my own budget way back in 2008 and haven’t really allowed it to grow since then. I haven’t had a holiday for more than three years and I am totally cool with that. The clients and customers of any business will be budgeting expenditures too so you may feel the pinch of people cutting back. What have you experimented with as a way of getting people to spend? Most of us love to spend and there are certain things we will never cut from our budget as we have prioritised them. They are simply too important to us or to our businesses.
What can we do to tempt customers into spending? My client with the original query is the master of the twice yearly text offering unmissable half-priced bargains. That brings them in, for sure, but after a year or two their client base now knows to expect them when the shop is quiet in February and August so perhaps they hold onto the purse strings in January and July. Have they created their own lean times by not refreshing their offers recently?
How can you ring the changes with your recession beaters? How about seasonally-themed temptations? Something red for Valentine’s Day. Something sweet for Easter. Getting into shape for summer. Holidays in August. New school term in September, Halloween, Fireworks, Christmas. Or something altogether less cheesy.
How inventive can you get? How experimental? What tempts you to buy if not a bargain? Good selling? Innovation? A brilliant idea? Recently when joining in with Jason Vale’s juice detox, I bought a couple of his Apps as they were easier than reading the book and collated my shopping lists for me. Time saving, hurrah! And he offered me the potential of winning £10,000 just by taking part. All the ancillary sales and publicity is easily going to be worth £10k to his business. What’s your equivalent?
I recommended to my clients that we look at special offers rather than price discounting because you never want your clients to think you have reduced the standards of your skilled work or that somehow you are less than you were before. But if you re-shape what you offer into affordable chunks, then people will buy. Do you have different sides to your business, one where you can afford to discount and one where it’s less easy? Do you know your margins on each product and service? That’s a good place to start.
Sometimes cash flow is paramount and you just need to keep it coming in by tickling your existing fans and followers into spending money with you. Often that can be a pleasure for customers and clients; people want to spend, help them to do it.
And one final thought; beware of believing that the recession is a cut-and-dried, black and white fact. For some people it is, for sure, and I wish them well and back on their feet as soon as possible.
But for the rest of us it may just be the economy in our head which is vitally important. Observe how much you allow the media to convince you that everyone is hard up. It ain’t necessarily so. Don’t make recession a self-fulfilling prophecy in your business. Get creative with marketing ideas and do all you can to increase sales with incentives instead of reducing your prices.