With New Year’s resolutions still the topic du jour, many small business owners are putting the concept of a "fresh start" to work, and reconsidering their marketing strategies for 2011 and beyond.
Small business is slowly bouncing back, and after a few very lean years, 2011 is the time to make money, according to pricing expert Rafi Mohammed. Mohammed is the author of “The 1% Windfall: How Successful Companies Use Price to Profit and Grow.”
Here are some pricing tips Mohammed has for small business owners in the New Year:
No. 1. Wean customers off discounts. After several years of promotions and financing deals, Mohammed said it is time for small business owners to scale back on the price breaks. Although, he added, it’s important not to stop the discounts abruptly either.
“Make it a three-month process,” he said. “Start giving customers a heads-up that in March this discount is going away. It is important to prep people and ease into it.”
No. 2. Explain the value of your product. Make sure your customers know what your company has gone through during this recession. Reiterate the value of your product to them, so you can then raise prices, Mohammed said.
“Take a moment to explain to them your value,” he said. “Most companies cannot articulate the value of their product, and it is really important to do that.” Many business were forced to lower prices to stay competitive in a tough market, so if you fell into this category, explain it to consumers and then slowly head back to where you were before the crash.
No. 3. Upgrade your product offering. If you are planning to raise prices, you might want to at the same time come out with a better version of your current product line.
“People are battered from the recession,” Mohammed said. “The common thing to do is to raise the price on a better version of your product. This upgrade is something I would do tomorrow if I was a small business owner.”