Posts Tagged pricing
Small Business Pricing Strategy: Adjusting Your Price Points
Posted by Patrick Woods in General Marketing on
photo by D3 San Francisco
As a small business owner, how often do you assess and adjust the price points of your product or service? Do you wait until someone complains about the competition’s lower prices? Or have you just maintained the same prices you set when you first started your small business?
If you’re a Starbuck’s drinker, you may have noticed a recent change in price of most of their menu items. Jay H. Heyman provides some interesting analysis of the adjustment, pointing out that basic coffee shop offerings, like a cup of drip coffee, will likely drop in price (and it has at my local shop), while premium items, like the various versions of the Frappuccino, will see a price increase.
Why? Because consumers expect premium products from Starbuck’s and will (hopefully) be willing to pay the extra few cents. Instant growth of profit margin.
So in light of your small business’ product and service offering, does your pricing strategy fit your customers’ holistic perception of your brand? Are you undercharging because you’re afraid of alienating your customers or clients? Are there other strategic adjustments you can make to increase your profit margin without alienating customers?
Take some time to think strategically about your pricing strategy and your efforts will literally pay off.
Marketing is Like Shopping Carts in the Parking Lot
Posted by Patrick Woods in General Marketing on
Photo by Robert Couse-Baker
For some reason, I’m one of those people who always have to return the shopping cart to its designated place in the parking lot. Over the weekend at Wal-Mart, I found myself doing just that.
As I approached the nearest return station, I noticed that not only was it overflowing with carts, the parking space directly on the other side of the return stall was also filled with carts. There had to be at least 100 carts crammed into this area. The parking lot crew was definitely short-staffed that day.
In search of plan B, I looked further down the parking aisle, and not 15 feet away I saw the nearest cart return station. It was almost entirely empty, with two, maybe three carts.
Does your small business’ marketing enable simple interaction with your target audience?
People like things to be extremely easy. In the parking lot, this desire for simplicity meant meant refusing to walk an extra few feet to return a shopping cart.
For your small business, the desire for simplicity means that all of your marketing efforts must enable clear and simple interactions.
Photo by Robert.Montalvo
- Brand–do your clearly communicate your unique selling proposition? Is your image clearly communicated to your target audience?
- Promotions–are your offers and discounts communicated so people easily grasp what you’re offering?
- Product–do you clearly communicate the benefits (not features) of your product or service? Is there a simple and powerful answer to “so what”?
- Communication–do you enable pain-free communication with customers and clients by displaying your contact information on all printed and electronic collateral? Are you available via live chat on your website and on the social networks? Does someone always answer the phone and do you always respond to email?
Remember, in the chaos of the daily grind, your target audience requires simplicity in its interactions with you and your company. It’s your duty as a small business owner to enable this simplicity on every front.
Small Business Marketing Mix: Price
Posted by Patrick Woods in General Marketing on
When small business owners think about marketing, their ideas are often limited to promotion and advertising only. But marketing involves other activities, such as distribution, your product or service, and price. What kinds of things make up the pricing facet of the marketing mix for a small business?
- Volume discounts and wholesale pricing
- Suggested retail price
- Early payment and cash discounts
- Seasonal and holiday pricing promotion
- Bundling
Some small businesses have only one pricing strategy: set your price lower than everyone else. But is this always the best approach?
Before making any pricing strategy decisions, conduct a competitive analysis of other large and small businesses in your space. Who’s the low-cost leader? Who is the expensive-but-worth-it company? How does your brand fit within the competitive matrix?
Once you understand the playing field, you can adjust your tactics accordingly. A price war is never good for for any industry, so you’ll want to consider ways of adding value the product or service offering of your small business. What are the standard services for each price point, and how can you add low-cost but high-value items to each package?
Another way to strengthen the pricing strategy of your small business marketing plan is to become the exclusive vendor of a specialty product or service. If you’re the only business in your market offering underwater plumbing services, you’ll never have worry about competing on price.
