Many small businesses find themselves under pressure to cut prices. This can happen when a lower-priced competitor enters your market when economic hardship hits your industry. However, few small businesses can afford to engage in this kind of price war.
Many small businesses find themselves under pressure to cut prices. This can happen when a lower-priced competitor enters your market when economic hardship hits your industry. However, few small businesses can afford to engage in this kind of price war.
There are many times when discounts make sense; for example, when your business operating costs are down and you want to extend those savings. But since your product price is based on covering all costs and leaving a necessary margin, discounts can eat into your profits. The answer? Consider using these strategies to attract and retain customers without hurting your bottom line.
Focus on customer service.
By doing this, the added value you provide to your customers allows you to charge higher prices while keeping competitors out. You can provide superior customer service by offering easy returns, extended warranties, free shipping, expedited ordering for regular customers, and customer service techniques. This is more tactical than engaging in a price war with competitors because it encourages long-term relationships with customers. Competing on price forces a company to offer products to disloyal customers who may or may not return to the company in the future.
Combine products and services together.
You can create more value for your customers by bundling related products together and selling them for more than the individual prices but less than the total cost of each item. For example, a bookstore might bundle a fancy pen with a magazine or a dictionary with an atlas and thesaurus. This can help you offset the markdowns on individual products while increasing total sales.
Reduce the quantity of goods that come with the price.
If you find that the market is demanding lower prices, consider whether there is a way to sell as a network designer, can you introduce efficiencies into your project development process that will allow you to sell your services at a lower price? This may help you reduce your product price while still managing your costs.
Add more services
Instead of discounting, keep the price the same and add a service for the same amount of product. For example, a bookstore owner could offer free gift wrapping with every order, or a trainer could offer free one-hour nutrition advice with 10 sessions.
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