Small Business Pricing Strategies

TACTIC #1 -- Never simply slash your prices, unless you're trying to empty obsolete inventory. Instead, try repackaging your prices so they're more affordable in the short-run so more prospects can afford them. For example, rather than pricing your service for the year, "Our monthly newsletter is only $39 for the year." Instead, try "Our monthly newsletter is only $3.25 per month." If you accept credit cards, it's very easy to set up reoccurring monthly charges that are billed to your subscribers without having to intervene every month beyond the initial account set up. The upside to offering your subscription on a monthly basis is that you can now market a $3.25 headline versus a more expensive $39 headline, i.e. you're able to offer services at a more affordable rate without slashing prices.

ANOTHER EXAMPLE
Here's another example. Just last night I was on the phone with a potential marketing client. As a small business owner she's trying to get some marketing help and is on a tight budget. My standard hourly consulting fee is $225, which is not always appealing to some businesses. However, in trying to work within her budget I suggested that my services could be more affordable for her if she allowed me to help her through email instead of face-to-face or on the phone. Let's face it, when you're on the phone with a client it takes longer to accomplish what you're doing since you're not only answering their questions, but you're building a relationship and talking about unrelated topics. It's difficult not to. In fact, you should! No matter what type of consultant you are, building a successful business is not about the initial sale, it's about establishing a long-term relationship with customers.

One-off sales don't lend themselves to growing a profitable business; rather, deep customer relationships do! However, since I was able to establish a trustworthy and comfortable relationship with my prospect on the phone, she thought my marketing services through email would be a win-win. Did I slash my prices? No, instead I found a more efficient way to offer my services, whereby I could offer them in less time and therefore, my client will pay less money. This strategy could work for business coaches, fitness experts or personal chefs, when the latter prepares meals in her home rather than in a client's home.

TACTIC #2 -- Create tightly niched product or service offerings. For example, if you're operating a personal concierge service, rather than just offer errand services at $25 an hour, try prepackaging specific errands with associated lower pricing. Why? Because you can offer a more aggressive price when isolating your fee to one particular service. If your customer challenges your reduced price as compared to your higher hourly fee, your response is simply, "I'm able to offer this lower packaged price because of economies of scale. While I'm out delivering your bundles to the Post Office, I'm also delivering packages for five other customers." Ultimately, your customers will never know how many other customers you're delivering for that day; however, the key is not to simply slash your pricing because you believe that reducing your prices will bring you more business. The key is to provide consistent and professional pricing practices.

P.S...Yes, business is slow for many entrepreneurs right now; however, be cautious with your pricing methods. Don't simply slash prices; instead incorporate long-term and short-term strategies that are always complementary to each other. If you offer a product for $15 today, then again at $35 six months from now, you must have your reasons in place, otherwise you'll aggravate your customers.

Sharron Senter is a New England-based marketing consultant, speaker, writer and founder of Senter & Associates, a marketing communications firm that helps small businesses deploy low-cost marketing strategies. Sharron is well known for her free monthly emailed marketing tips, found at http://www.sharronsenter.com. She's also the cofounder of http://www.VisitingGeeks.com ? an onsite computer repair, networking and security company based north of Boston.

---

Real World Accounting for Small Business Owners

If you're like me, you love accounting. It's so fascinating... Read More

Small Businesses - Big Obstacles

Everyone is talking about small businesses. In 1993, when it... Read More

Self-Employment: Do you know the Difference between Rates and Wages

The difference between rates and wages is not always clear... Read More

Find Some Sample Payroll Check Stubs on the Net for Easy Reference

Starting a business? For many people, the bravery to venture... Read More

The 5 Traits of Baby Boomer Business Owners

As a practitioner and student of Small Business Marketing, I... Read More

7 Reasons To Take Control Of Your Small Business? Checking Needs

Business checks are available in many styles and varieties. They... Read More

10 Best Practices to Consider as Your SBIR Negotations Approach Contract Signature

10 Best Practices to consider as your SBIR negotiations approach... Read More

How To Create A Business Note That Is More Attractive To A Note Investor

You are selling your small business (business value under $1... Read More

Excuses Franchisees Make; When They Violate Exclusive Territory Agreements

One of the biggest excuses franchisees of home based and... Read More

Mini-Blind Cleaning Business, Case Study

Sometimes the simple businesses are the ones, which make good... Read More

Small Business Mistakes: Are You Making Enough of Them?

That's right ­ are you making enough mistakes in your... Read More

Choosing a Truck Wash Location in Nevada, Case Study

There are several well-known truck washes in the Great State... Read More

Top 10 Mistakes to Avoid When Joining a Professional Association

I'll be the first to admit that I went a... Read More

Choosing A Business Thats Right For You

Q: I really want to start my own business, but... Read More

Increase Productivity and Business Success - Take Responsibility

Are you responsible for your results?What comes to mind when... Read More

6 Ways Small Businesses Can Survive In A Crazy Economy

Contrary to popular belief, small businesses can survive a crazy... Read More

Marketing a New or Small Business on a Budget

There are almost as many opinions and views on marketing... Read More

Sample; Territory Reduction Policy for a Franchise Company

I propose this thought on the subject of Franchisee territory... Read More

How to Create an Information Plan

What is in an information plan?Before you even meet with... Read More

How To Plant Seeds of Success With Small Business Ideas

Think of all of your business ideas as tiny seeds... Read More

Concrete Cleaning Discussed at World of Concrete Expo 03

If you are in the pressure washing business and are... Read More

Small Business Grants - Tips from the Pros

Every business starts with an idea or a dream. To... Read More

Do You Really Need a Toll-Free Number for Your Business?

Do You Really Need a Toll-Free Number for Your Business?... Read More

Facts About Starting Elderly Group Home Businesses

There's been a recent rise in the number of elderly... Read More

How Do I Choose The Right Business Opportunity For Me?

First you have to start with knowing your budget and... Read More

Business Plans - What Consultants Don?t tell You!

Do you have a Business Plan? Congratulations, but you are... Read More

Loose Lips Sink Ships - The Fastest Way to Put Yourself Out of Business

I agree that knowledge should be free, but the next... Read More

The Game Plan ? The Difference Between Small Business Success And Failure

It is an American dream to own a business. But... Read More

How to Avoid the Most Common Reasons for Small Business Failure

The life cycle of the typical small business is short... Read More

Procrastinate Your Way To A Successful Small Business

What will your business look like a year from today?If... Read More

Family Business and Conflicts

What is a Family Business? A family business is basically... Read More

Blowing Your Own Horn ? A Key Marketing Strategy for Small Business

-- Building Credibility Through Success Stories --Successful solo entrepreneurs spend... Read More

WARNING to Home Based and Small Business Who Want to Buy Television Cable Advertising

Most small businesses will not even try to advertise on... Read More