Avoid Pricing and Discounting Mistakes

Posted by on Mar 09 2017

In 2008, Pizza Hut saw its sales drop because of the Great Recession. Competitors were lowering their prices and offering discounts — and Pizza Hut figured they had better offer a discount if they wanted to compete with Dominoes Pizza and Papa John’s Pizza for a dwindling market.

So in 2009, Pizza Hut began to offer a large cheese pizza with three toppings for $10 (the normal price was $15). Then they sweetened the deal by offering unlimited toppings for the same $10 price.

And sales rose.

That’s a good thing, right?

Fast forward to 2011. The economy was easing and Pizza Hut (and the other pizza competitors) now wanted to reinstate their normal pizza price of $15.

And customers resisted.

Why? Because of two psychological triggers:

  1. People had gotten used to paying only $10 for a pizza with unlimited toppings. When you increase the price back to the “normal” $15, people see that as a raise in price of 50 percent, conveniently forgetting the pre-2009 pricing.
  2. When you lower your prices, you devalue your product or service. You’re basically telling people, “It’s not worth $15, it’s only worth $10. We’ve been overcharging you all along.”

What do you do when sales are sluggish and you want to offer a discount, but you don’t want to imply that your products and services are worth less by lowering the price?

Enter the Concept of Adaptive Pricing

Here’s the psychology behind the concept: Customers have different needs, and place different values on the various aspects of your products and services — price being just one aspect they consider.

For example:

  • Many customers value access to a live instructor above learning on their own, so if they have questions they can get help immediately from the instructor. Therefore, they’re willing to pay more for a live class than a self-study program.
  • Some customers place value on group brainstorming and sharing of best practices to shorten the learning curve, and are willing to pay to be a member of a mastermind group.
  • Other customers value private one-on-one services and are willing to pay a premium price to get your total attention to find solutions to their problems and think strategically.

By knowing what your customers value — and creating pricing and discounts based on those values — you can increase customer satisfaction and sales at the same time.

But My Customers Want Low Prices!

Be careful of your own psychology: you might be a budget shopper yourself, but not all your customers are. If you constantly offer things for a discount (or for free!), it’s more about your own feelings about money and pricing than the needs of your customers.

For every customer who wants things as cheaply as possible, there are customers who demand extraordinary quality and are willing to pay for it. Just look at the different price/value levels of department stores (from Wal-Mart to Neiman Marcus) and you’ll see that there are huge ranges of quality, service, experience and price needs among customers.

Don’t assume your customers want cheap prices and are willing to take a lower quality service or product in order to get the lowest prices. Price based on the value of what you’re offering, and on your branding strategy. Are you the Wal-Mart of your industry or the Neiman Marcus? (Or somewhere in between?)

So, You Want to Offer a Discount

Great! Offering a discount has a lot of benefits for your business. Pay attention to your strategic purpose behind the discount — to increase sales, to increase demand, to test a pricing strategy, or to get the word out about a new product/service — and price accordingly.

When you offer your discount, test to see if your goals have been met. You may be assuming a discount will produce a certain results, and you could be wrong. Tracking your results is the only way to know for sure. (The numbers don’t lie!)

Three Adaptive Pricing Techniques to Use in Your Business

Versioning

For customers who are concerned about price above all else, offering them your product or service in a different version at a lower price-point will serve them while still keeping your sales up. Here’s an example:

  • I teach a 5-week class where students submit their homework assignments to me for review and analysis, and have access to me during class to ask questions. That class is priced at $499.
  • For the budget-conscious student, I offer similar material in a self-study version $299, (and they don’t have access to me at all if they purchase the self-study version).
  • For customers who want more private access to me to learn the topic and apply it specifically to their own business, they join an ongoing mastermind group that includes the class plus the group access. Each customer has a different need and by creating three versions of the service, I meet the needs of each type of customer.

Additions for Free

Another adaptive pricing technique is to offer an “extra” or “bonus” for free, but keep the base price of your product and service the same.

For example, you could offer your mastermind group to your customer at full price, but then offer them a free additional hour of your time. Walt Disney World theme park had a great success with offering their Buy Four Entry Tickets and Get Three Free package.

But don’t offer pseudo free bonuses unrelated to the product or service that customers are buying. Customers are now savvy to the free bonuses that many internet marketers offer (like: Buy Our Ebook and Get $40,000 Worth of Bonuses Free), and it just makes people think you’re trying to fool them, lowering trust and harming the relationship.

Unbundle

Everyone is telling you to combine a whole bunch of your offerings together, then give the customer a special price. But what if your customer doesn’t want everything in the bundle?

Consider offering your main product or service at full price, and then offering upgrades at a reduced price.

  • You could offer your live event for $1,200, then offer an hour of private consulting time for an additional (discounted) fee to those who are attending the live event. Or you could offer them an ongoing mastermind group for an additional fee.
  • Or you could offer them recordings of the live event for an additional fee. That way, customers can choose which upgrades are valuable to them and you can clearly see which upgrades are the winners in the eyes of your customer.

The key here is to know your customers, and know what they value when it comes to purchasing services and products. If you’re not sure, test out several pricing strategies and see which one pulls in the most revenue.

It’s also important to stop offering discounts when they are no longer needed to boost sales. Be strategic and think through your pricing ideas before implementing them so they don’t come back to bite you later!

   

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Category: Running a Strong & Efficient Business

Breaking Up Is Hard to Do: How to Fire Your Assistant, Website Designer, etc.

Posted by on Feb 28 2017

There must be something in the air. Three of my clients called me this week to talk about firing a subcontractor. One client asked me, “Can you please write an article about this so I know what to do?” And thus this article was born.

We hire people to help us grown and run our small business: assistants and virtual assistants, website designers and graphic artists, copywriters, coaches and consultants, and bookkeepers. But what do you do when their work isn’t up to par or they are constantly missing their deadlines?

These issues can lead to other problems, so even if they seem small they can blow up on you in the future. Your reputation relies on the quality of the work you do and all the people who you hire need to have the same level of excellence. If you demand it of yourself, demand it of your subcontractors.

Read full article.

   

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Category: Running a Strong & Efficient Business
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A Little At a Time

Posted by on Feb 20 2017

Many small business owners feel overwhelmed with what they have to do and the time constraints they have for accomplishing both big goals and everyday tasks.

I heard an interview with Zack Hample (who wrote a book about baseball). Zack has a 203 pound rubber band ball in his home. The interviewer asked Zack if he was obsessive. Zack replies,

“I started working on that thing when I was four. So we’re talking about decades here, and it’s not like I work on it every day. Sometimes I’ll add a pound a day for a week, then I won’t touch it for a year. So, you know, you work on something for a few decades, it’s going to be BIG and CRAZY if you stick with it.”

Building a business, building your dream, will take time and tenacity. But if you really want it, work on it a little every day with the knowledge that it will become what you want in time.

   

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Category: Business Strategy & Planning, Managing Projects, Tasks & Time
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Is Your Important Business Data Safe?

Posted by on Feb 17 2017

A few years ago we had a burglary in our office. Among the items they stole were two laptops.

But our data — especially our confidential client information — was safe. Here’s how:

  • We don’t keep client credit card information on our computers or in paper anywhere in the office. It’s all kept online in our shopping cart, and it’s only kept online for 30 days. Then it’s cleared out of the cart.
  • We keep all client files in a locked drawer or fire-proof safe.
  • We burn or shred all client information from inactive clients.
  • We don’t keep notes about the client in the computer. Instead, we take all notes manually and keep them locked away with the client files.
  • We back up our computers daily to an offsite backup. We use Mozy.com  and iDrive, which automatically uploads any new or updated files each night.

There are three things you need to protect against: loss of data because a hard drive fails, loss of data because of theft, and loss of data because of fire or flood. Most people backup their data to an external hard drive or CD. That will protect you if your hard drive fails, but it won’t protect you if your computer gets stolen or burns up in a fire.

We’ve learned some important lessons about office data security through this experience, and now that the dust has settled, we’re sure we won’t ever lose our digital data and we’ll keep our client files secure!

   

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Category: Running a Strong & Efficient Business

Managing Your Website Redesign Project – 22 Point Checklist

Posted by on Jan 21 2017

I know many of you are thinking it’s time to redesign your website, but you don’t know where to start or how to manage the project. Let me share my experience with you in hopes that it will make your website redesign process smooth and efficient.

After 11 months of hard planning and implementation, multiple website graphics and layout choices, and lots of coding (1,200 pages!), we launched the new-and-improved version of the Passion For Business website several years ago.

Then we did it again last year for The Success Alliance website, moving to a simpler, cleaner design that’s mobile-friendly. And we’ll have to do it again next year for a newer version of the Passion For Business website (even though we just redesigned it three years ago). Technology and people’s tastes in websites change, and you have to move with the times or be left behind.

We learned a lot along the way about managing website redesign projects and making sure they matched our business and marketing goals.

Let me share that wisdom with you, in the hopes it will help make your own website redesign project run smoothly.

The checklist below is written for you; you may be delegating pieces of this work to graphic designers, website designers, copywriters, SEO experts, or your administrative assistant. Make sure everyone knows what’s expected of them during each step in this checklist:

  1. First, know that this is going to be a long process, so find that extra bit of patience. It will pay off big time, trust me. There will be any number of times that you want to cut corners or give up an important feature that’s a pain to implement on your site. Stop. Breathe. Start again.
  2. Make sure you DO need and want to redesign your website. Not sure? Take this self-quiz: Is It Time To Redesign My Site?
  3. Write everything down – don’t trust your memory on something this important. Keep your ideas and your To Do list in a Project Plan file so everything is at your fingertips in one central location. Keep all correspondence with subcontractors who are working on your site.
  4. Start the redesign process by asking the big questions: What are the goals of my business? What role(s) will my website have in reaching those goals? Who will visit my website and what do they need/want to find there? What is my business brand and image? Is it time to give my brand a facelift?
  5. Decide what content you need on the site, then organize that content into logical “buckets” so that it’s easy to design the menu/navigation structure, and easy for visitors to find what they’re looking for. Make a list of each individual page and file that needs to be on the site. Not sure what’s important to your audience? Look at your Google Analytics and find the popular pages…and put the access to them in an easy-to-find spot on your new site.
  6. Decide which extra features you need on your site: will you have a newsletter sign-up box, a free offer, sidebar advertisements, a blog, video files, audio files, social media, etc.?
  7. Design the graphical page layout to include your logo and business colors, making sure there is enough room on the page for sidebar advertisements, sign-up boxes, etc. This is the time when a good website designer can make this process easy.
  8. Remember, the reputation of your business relies on professionalism and a professional look — this isn’t the time to cut corners with do-it-yourself graphic work, logos, navigation, or website page layout. A good website designer can target your website graphics and layout to your audience, and can make it user-friendly. A poor website design will have people walking away from your site instead of sticking around. Read this blog post on How to Choose a Website Designer if you need more tips. If you can’t find a website designer who is also a graphic artist, figure out a way for these two people to talk together about the design and the project plan.
  9. While your website designer is working on some preliminary designs, it’s time for you to edit and/or write your website text. Take a look at all your existing pages: Does the text talk to the audience and helping them solve a problem or reach a goal? Is your marketing message clear? Has your business focus changed and now your website needs new copy? If you’re not good at copy writing, consider hiring a copywriter to help you with the text updates.
  10. While you’re busy writing, don’t forget SEO work to increase your rankings on search engines. Choose your keywords and make sure those keywords are in your text. Note: there’s more to SEO than putting your keywords in your text, but choosing and adding your keywords is the first step.
  11. Once you choose the website design that works best for your audience, your brand and your business goals, now it’s time to start coding. You have several options when coding your website: your website designer can code it for you, or you can use a platform like WordPress. Even if you use WordPress, there’s still a HUGE amount of coding to do, so if you are not deeply familiar with CSS or PHP, hire someone to do the coding for you. Typically you can find a website designer who does both the graphic design and the coding, or who works as a team with other professionals to get your site done. If you want to do it yourself, consider one of the DIY website creation sites like Wix, Weebly or SquareSpace.
  12. DO NOT code directly to your existing domain, overwriting your existing files. Create a “testing” folder to put new files in. Even whiz-kids can make mistakes, so create a duplicate site for testing before you make your new site live to the public. It lets you build and test new pages as needed and will save you oodles of grief later.
  13. Make sure you code the SEO in the behind-the-scenes coding (tags) to help with your search engine rankings. Choose a website designer who has a lot of experience with SEO so that you can be assured this work is done correctly. Remember, there is more to SEO than the text and code on your website, but you must do these two things correctly FIRST before other SEO work can be done.
  14. Once the site is done with the initial coding, TEST the website in all the standard browsers to make sure it’s compatible: Internet Explorer, Firefox, Chrome, Safari and Opera. Test it in several versions of these browsers as well; not everyone is using the current version of browser software. If you’re not sure which browsers your current website visitors are using, you can find this information in your Google Analytics statistics. (It’s under the Audience/Technology area of Google Analytics.)
  15. Test to see how your site looks on both PCs and Macs, laptops, tablets and smartphones. (This is a good time to get your friends involved so you can see your new site on their browsers and machines.) Test on smart phones, tablets and laptops, including all mobile browsers. Make sure your new site works on ALL hardware platforms and screen sizes.
  16. After you do the testing, you’ll probably find that your site looks great in some browsers/hardware and awful in others. This requires additional coding to test the browser version or screen size/resolution the visitor is using and write code to make the site look the same in all browsers. Now you know why you pay a website designer to do this work! 🙂
  17. Test all links. Okay, now you’ve got your final website design. It looks great in all browsers and hardware, and the text and graphics are extraordinary. Now is the time to test all links (both the links in the menu/navigation and the links in the text). Make sure all links open to the appropriate page, file and/or external websites. Patience, my friend, do this slowly and properly. If you have bad links on your site, you’ll lose visitors and Google doesn’t like a site with a lot of bad links.
  18. Now test all forms. Sign up for your own newsletter, your own free offer, contact form, or any other form you have on your site, and make sure each form does exactly what it’s supposed to do. Sick of testing yet???  🙂
  19. Use 301 Redirects. If you have renamed any of your website pages, add 301 Redirects to your site so that those old links now forward to the new page URL.
  20. Now you’re ready to go live. But wait! I’m only going to say this once (loudly): BACK UP YOUR EXISTING WEBSITE and BLOG. Trust me. If you overwrite files and something blows up, you’ll be happy that you can easily put yourself back to the old site while you fix the problem.
  21. Take a deep breath, and upload your new website design to your hosting.
  22. Once it’s live, test again. All of it. Seriously.

Finally, go ahead and tell your audience your site is live, invite feedback, and tell them if they find a problem with the site to please let you know about it. It’s great to have a lot of people checking out your new site to make sure there are no mistakes.

Congratulations, you’ve done it! Have a huge party to celebrate!  🙂

 

(If I’ve missed any steps, please leave a comment and tell me about YOUR website project experience!)

   

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Category: Internet & Social Media Marketing, Managing Projects, Tasks & Time, Website Planning
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Nurturing the Not-Ready Customer Through the Buying Cycle

Posted by on Jan 16 2017

We’d all love it if we could close every deal or every sale with a new customer in 30 minutes or less. But that rarely happens. A sales cycle can last up to six months, depending on how much research the potential customer has done before he or she comes to you.

Before customers are ready to sign on the dotted line, they first must go through a well-researched route to purchasing products and services, called the Buying Cycle. You need to nurture these potential clients and help them along this route to ultimately choosing the solution you’re offering them.

Studies show that 79% of website visitors aren’t ready to buy. They’re somewhere else in the buying cycle. They may not even be aware of the scope of their problem, and may simply be in the early stages of researching a possible solution.

But just because they’re not ready to buy doesn’t mean there isn’t opportunity for you as a business owner. If you continue to educate them and nurture those leads – wherever they are in the buying cycle – you’ll be at the top of their minds when they’re ready to buy.

The Buying Cycle

The typical buying cycle goes from having an awareness that there is a problem to evaluating the possible solutions, choosing one and implementing it. And it ends, hopefully, with a long-term, meaningful relationship with a customer.

A more detailed explanation of the buying cycle:

  1. Acknowledging there’s a problem they need to solve. Something is broken – either a physical product, like their washing machine, or a process in their business – and they need to fix it.
  2. Making a decision to fix this problem. They can’t do it themselves, so they need outside help.
  3. Determining exactly what results they want. What’s their end goal? What outcome or results do they want after purchasing and implementing a solution?
  4. Gathering basic information. They’re searching for companies that can help them, and often doing this research online. Perhaps they’re asking friends or other business owners who’ve had similar problems about their solutions.
  5. Identifying possible solutions or vendors that will give the result or results that they want.
  6. Comparing those solutions or vendors.
  7. Selecting a vendor/product.
  8. Negotiating the deal.
  9. Making a purchase decision. This can mean either signing a contract or making a direct purchase.
  10. Implementing the solution. Your relationship doesn’t end with the purchase. Now you have to help them use your product or service wisely to get full results.
  11. Forging an ongoing relationship. This allows for repeat business from the same customer and ensures ongoing customer satisfaction and word-of-mouth referrals.

Recognizing where your customer is in this buying cycle is key. When a customer first makes contact with you, have a set of questions ready that help determine where he or she is. “Tell me about your situation?” “Have you looked at other solutions?” Their answers to these questions can help determine whether they’re still early in the buying cycle, or if they’re close to making a decision.

Pick Marketing Techniques Based on Buying Cycle

Choose different marketing techniques for each phase of the buying cycle. For instance:

  • A well-designed website can help customers early on in the buying cycle by allowing them to gather information.
  • A free whitepaper outlining possible solutions and comparing them helps mid-way through the buying cycle.
  • An email campaign helps prospective customers through the pre-purchase process, and later forges an ongoing, repeat-buying relationship near the end of the buying cycle.

Having content for each stage tells your customer, “We’re ready when you are.” If they’re early in the buying cycle, back off and let them explore, but be available to answer questions. If they want to discuss possibly buying from you, be available for a phone or in-person meeting, and have marketing material ready to help them make a choice from among your offerings.

By being aware of the different stages in the buying process, and thinking about what questions your customer are asking at each stage of the cycle, you can provide a prospective customer with the appropriate marketing technique at the right time.

   

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Category: Internet & Social Media Marketing, Marketing

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