Pricing As A Leverage Point

The process of interacting with your customers can be complicated – depending on the nature of your business. The up-side is that there may be points of contact or times in your interaction when you can boost your revenue. We call these “leverage points” because they can be used to take an existing relationship and leveraged for profits.

Let’s look at one…

Pricing can be an interesting point of leverage. Now, this can depend on what you are offering and the type of business you run. If you are selling candy or bubble gum, you may not have many options this way. But, if you do any kind of consulting or even in many service industries, you have some leeway here. There are a few things you can do with your pricing.

You can increase it. This is one of my favourite ways to make more money. Just charge more. Now, your price has to be justified and backed by your service, but it has been my experience that if you charge more (and support it), you can change your clientelle into people who are happy with what you are doing. You may be able to specialize your service or offer guarantees that appeal to yoru customers. Many business people are under the (false) impression that they will get more business by charging less. All they are doing in this case is selling themselves on the cheap. People are happy to pay for quality and you may find that the people who are happy to pay more give you less grief. And if they complain as much as the cheaper people, at least you are getting paid for it

My position is that if you offer a good service, charge accordingly. And if you aren’t getting enough business, then look at how to improve your marketing. Don’t cut your price. You just haven’t found the customers with deeper pockets yet.

You may be able to offer your service with different service levels – good/better/best and cause your service to appeal to a broader range of users. Can you take your base product or service and add to it and sell it at a higher price? Offer a couple different levels and see what the response is from your clients. You might find that your customers expect more – and are happy to pay for it.

You may be able to offer specialized pricing or package of services to appeal to a certain niche. This may be a demographic or even a specific location or group of people depending on your service. You may or may not be charging more, but the fact that you offer something directly to that group of people will appeal to them and make them feel special. As though you are the only service for “them”.

It never hurts to review your pricing and look at how you can change it to appeal to a different audience.

“Organic marketing” with Mike Perras

 

Follow Through With Your Follow Up!

Following up with clients can be a very important part of doing business, yet I am always surprised at how few businesses actually do it.

You see, basically, there are only 3 ways to increase your business…

1. Increase the number of customers
2. Get your current customers to buy more often
3. Get your current customers to spend more money (larger purchases)

Most advertising just focusses on #1 and then they stop. Newspaper, radio, TV, print ads, etc all just focus on getting people in the door. Let’s say for example that a business owner know that for every 10 people that come in his door, he will sell 1 item. So when he needs to make more sames, generate more business, what does he do? He buys advertising. So now he gets 100 new people in the door and makes 10 more sales (hypothetically speaking). Not bad. But what about the other people who didn’t buy?

See, I am going to wager that with a good follow up system in place, he could easily double the number of sales per 10 visitors up to 2 and definitely increase the odds of turning a customer who purchased into a repeat customer. Getting them to purchase more often.

So, what do we mean by a follow up system?

Well, basically, any kind of mechanism that you purposely put into place which will allow you to collect contact information from your clients or prospects and then allow you to contact them again in the future. Some ideas for this might be to offer your customers a monthly newsletter. You can put articles in there that relate to your industry, products or services. You might offer a coupon for a special deal or annouce upcomming events relating to your business.

Why? The point here is to build and nurture a relationship with your contacts. You see, people are more likely to spend money with someone they know. So, get to know them. Invite them to take part in special discounts or put on a customer appreciation event for your regulars.

How do you set this up? Well some of it will depend on the nature of your business. Some businesses have no problem getting contaact info from their clients because they need it for their records. We spoke once to a massage parlour who automatically takes mailing information for each client who visits. “Great,” we said, “then what do you send them?”. “Oh, nothing” was the reply! “we just need it for our records” Of course, I am off to the side banging my head against the wall Why not send them a note thanking them for coming out today? When was the last time you purchased a product or service and got thanked by the vendor? If it has ever happened, you probably remember it – that is the point!

What can you send out as part of your follow up system? Here are some ideas:

• A newsletter
• Product offerings
• Coupons
• Updates on the business or industry
• Invitation to special events at the business
• Anything to make the people feel special and appreciated

How do you send this out? The point here is not necessarily to make way more work for yourself so you have to do what you are comfortable with. I am going to suggest that you send out emails that link back to a page on your website that contains that issue of the newsletter. If you are not comfortable with that, you can just send out plain emails. Actual mail can work too – though a bit more expensive. People still appreciate getting something in the mail and they are less likely to discard it than they are to delete your email. Also, if they leave it laying around (which they are more inclined to do if there is valuable information on it), then others are likely to see it and ask questions or come by your store or office.

How to collect the contact info? Well, you could just ask for it. That will get you more than not asking When someone is checking out, ask them to write down their email address or soemthing. Better yet is to offer them something right there in return. Offer them the opportunity to receive updates or a newsletter, offer them “access to VIP discounts”. Give them a card with their receipt that invites them to go to your website to sign up for great offers. Ask for their business card – if you are a restaurant, maybe hold a draw every week for a free dinner – get people to put their business cards in for the draw. I have seen that a time or two. There are a number of different things you can do – again it will depend on the nature of your business and what you are comfortable with.

The main thing is that you do follow up – and on a regular basis. Maintain the relationship and develop yoru customer. Then you will have no problem getting them to spend more money and make larger purchases.

Define your Sales Process – Simplify Your Advertising

What is your sales process and why does it matter?

I was recently talking to a client of mine about a marketing campaign he was interested in running.
This client is a computer networking consultant. He does on-site visits to service business’s computer networks.

So, he calls me up and said that he needed more clients and so was going to run some advertising. He mentioned 3 mediums – (bulk) postcard mailings, billboard ads and Google Adwords. He was going off in all different directions and I started asking him a couple of simple questions. Once he couldn’t answer them, I just said, “Ok, stop. Backup. What is your sales process?”

His reply – “What do you mean, my sales process?”

I said, you are a long way from talking about advertising. You aren’t ready yet if you don’t know your sales process. Before you spend any money on advertising, you need to have some things in place.

The first is a defined system for closing sales. You see, marketing should be about controlling an known entity. It is something in which you invest in order to gain a return. It is not (or should not be) something that is done by random chance in order to “see what happens”.

To define your sales process, you must think about the steps that potential customer or clients go through before they hand over their money to you. How do they get from not knowing you to becoming a paying customer? Then, you simply create a path for them that makes it easy to follow from one step to the next and then promote it.

For example, my computer consultant client… We had a good discussion and I asked him how he gets his clients. What is the step before they contract you to work in their office? “Oh”, he said, “that is easy. We set up a meeting with them. If I can get in their office for a meeting, I will close a good majority of prospects.”

Great.

See, now we know what we are selling. Any of the advertising that we do does not sell the consulting service. Advertising should be the start of the sales process and should follow like a chain. Any ads that we put out for his service only have to sell the potential client a meeting. If the consultant gets into a meeting, he will close the majority of the time.

So, do we run ads that sell the meeting? Well, we could. However, there is even a more effective way. Think for a minute… wouldn’t it be better to go in to the meeting as an “expert”? Wouldn’t it be better if the potential client already felt some respect for the consultant? It would very likely increase the close rate. How do we do that? Well, I suggest adding an extra step to the sales process.

Take the opportunity to position yourself as an expert.

We’ll call it the two-step method. Introduce yourself to your prospect via an information package. Or through a free trial of your product/service. Or with a free consultation. Something that will let them feel comfortable with you before you ask for the sale.

I have suggested to my consulting client to offer a free info package. Maybe a report he is writing regarding monthly computer maintenance tasks. It could be a free site visit and inspection of their computer network. He could actually go and offer some kind of network security analysis – after which, he could identify to his prospect certain areas of their security that could be enhanced or maintained.

The point here is that if you have a clear, defined sales process, it is easier to do advertising. All that your ad has to do is ell the next step. So with our consultant example, here is one proposed scenario:

1. Advertisement invites readers to go to a website and learn how to maintain their computer network monthly for maximum performance.
2. Website requires visitor to exchange their contact information for a free report on the topic.
3. Consultant follows up, using contact info to set up a free consultation.
4. Free consultation leads to identifying flaws in the company network security.
5. Now the consultant has something to sell – a specific solution to a problem he has already identified for the customer. Why wouldn’t the prospect buy?

See, by now, the consultant is already an expert. He has already proven that he knows his stuff (free report), he has been in to the office and identified issues that the prospect has. If he is smart, he takes a minute to explain why each issue he has identified is relevant to the security of the company. This also proves him as the expert and builds trust from the prospect. Now asking for the opportunity to fix these problems is easily done with a high rate of closing.

Some extra notes:

Some of these steps could be changed. For example, the advertisements could offer a free consultation directly and eliminate the free information product. It may depend on what you are more comfortable with. It may also depend on the complexity of what you are offering or your area of expertise. One thing to keep in mind, though is that you will very likely get more people asking for a free report or free information than you will for a free consultation. You should test this of course, but free information that is sent over is less threatening. Your goal here should be to generate leads and a prospect list with which you can follow up later on. A few follow-ups will greatly increase your close rate.

The main point here is that whatever you decide your sales process is, know what it is. Write it down and make it step-by-step so that it flows. Have one step lead to the next so that when your prospect enters your “sales funnel” (i.e. Sees your ad), you are leading them along to the finish line (turning them into a client).

More importantly here is that you even know what your sales process is (many businesses don’t have a defined sales process or even know how or why they get customers). This way, it is easy to know how to advertise – just start at the top of the sales process. One step sells the next until you have a repeatable, defined sales machine.

How To Integrate Your USP

Once you understand what your USP is, it is important that you integrate it and impliment it into your business. A good place to start is to make sure that you publicize it so that every one can see right away who you are in the marketplace and what you stand for. This will identify you to your target market.

You should start by placing your USP on:

• Your business cards
• Your website
• Any print or media advertising
• Actually in your place of business – maybe or your counter/checkout/desk, etc
• Signage
• Answering machine

Why?

It is important that your customers know exactly who you are and why they should do business with you.

It is more than that though.

Your USP is not simply words, a sentence or paragraph. It should become the essence of your business. Once you determine your USP, you may have to change the way you do things, the suppliers you use or something in your processes in order to be able to deliver what you are promising.

If a pizza shop guarantees delivery of pizza in 30 minutes, they better be able to make the pizza in less 25 minutes. Once you determine what your customers are looking for and what needs they have, you can determine how you are to meet those needs, then you build your business around that and deliver.

What is a USP?

U.S.P. stands for “Unique Selling Proposition”. This indicates what is different, special, unique about your business. What sets you apart in your marketplace?

Ultimately, your USP should answer this question in your customer’s mind:

“Why should I do business with you above any and all other options?”

Is very important that you know exactly why your customers should do business with you. If you don’t know why your customers should do business with you, then you will not be able to communicate this to them.

Your USP can and should communicate the specific benefit that your customer will receive by purchasing your product or service. The idea here is to pull out a specific benefit that your product or service offers and promote that so that when your customer requires that benefit they associate your product or service with it.

Your USP should be unique. You should be making a claim that no one else in your marketplace either can make, or is making.

Let’s look at some examples:

Domino’s Pizza: “You get fresh, hot pizza delivered to your door in 30 minutes or less — or it’s free.”

When Domino’s came out with this USP, they targeted a market that no one else had focused on. They thought of all the things that could make them unique and decided to offer fast delivery of their product. They did not claim to have the best tasting, healthiest, most organic pizza available. They only promised that they were delivered quickly. What this did was identified them in the marketplace as the pizza store with fast delivery. If you wanted pizza NOW, you automatically called Domino’s. They only had to make one claim and target one market. In a short time they became a market leader.

FedEx: “When your package absolutely, positively has to get there overnight”

When FedEx came out with this USP, they were trying to carve out their place in the market. They certainly did all kinds of delivery (overnight, second day, ground, air, etc) however their business started to grow quickly when they clearly identified who they were and what the benefit was to the customer. Again, they selected one benefit they could offer the customer and communicated that message so if a customer had to deliver a package quickly, they automatically would call FedEx.

These USP’s became famous because they worked. They communicated the specific benefit a specific market and then delivered.

Here are some other good examples:

M&M’s: “The milk chocolate melts in your mouth, not in your hand”

Wonder Bread: “Wonder Bread Helps Build Strong Bodies 12 Ways”

Head & Shoulders: “You get rid of dandruff”

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