It would seem to be a no-brainer – rising prices equals more income and profits. BUT, not always!
Typically when raising prices, a business loses about 10-15% of their existing customers, and, hopefully, since a business should ALWAYS be bringing in NEW customers, income would increase. But it doesn’t always work that way.
A lot of businesses think small increases are not noticed by the customers. Not so – consumers DO notice! There is so much competition – now especially – for the consumer dollar. People shop around ONLINE and find the best price. When a business raises prices, or changes what you get for your $, customers do notice it, and if not happy, take their business elsewhere.
Customers are watching prices more carefully. Everything is going up and consumers do not want to pay more. Deciding where to spend their money is crucial. Getting a good value for their money is also crucial.
Small businesses are having a hard time getting help, retaining customers, and struggling with higher supply cost of goods. Raising prices seems like great idea – but if not done properly, it can do more harm, and cause more loss of business. 50 cents or a dollar on even half of the items can be a big increase in income. But beware – this can run off customers.
One restaurant raised it’s prices multiple times over the past year, and a group of loyal customers that came in at least once a month kept noticing it. It was getting to the point to not be worth dining at that restaurant. Then one day, the group was at the restaurant again, actually talking about the raise in prices on the items they normally order, when the bill came. Every order was 50 cents higher on the bill than on the menu, which already had increased pricing.
The proverbial straw that broke the camel’s back – to be told “oh well we just didn’t get around to printing new menus yet. Those are our new prices.” How would you feel?
So for what the restaurant brought in with the price increase, they, in effect, lost 4 customers’ business every month – probably equaling, if not more, of a loss than the price increase brought in.
A better way would be to look for cost cutting methods, or only raise prices a little across the entire menu. And keep in mind the competition’s prices. Outpricing yourself is not a good idea.
Take notice if your sales have stayed stagnant or gone down after price increases or other major changes. That is the customers telling you something.
We all know it is a tough time for businesses now – especially small locally owned businesses – but it is important to keep your existing customers. Try daily specials, loyalty programs, staff and employee incentives to help make customers’ experience a good one, so they come back and TELL OTHERS about your business. Word of Mouth is still the BEST form of advertising. But a business has to make an effort so the customer truly has something good to say about your business.
An old saying is that if a customer has a bad experience, they tell at least 9 people, but if they had a good experience they only tell 3! Businesses need to show customers that they are important to them and work to keep them as customers.
Now is also a good time to reach out and bring in NEW customers – unfortunately, with so many businesses losing once loyal customers, another business can benefit and attract consumers to them, There a ways to reach out to new people – check out upcoming blogs for more on this and other ways to bring costumers back.
We probably have all heard the saying #LittleThingsMeanALot – it is VERY true for businesses, especially the smaller, locally owned and operated ones…..
There are many ways a small business can keep their customers happy, THANK and reward them, which will help increase business. Many that don’t cost much or anything at all! REWARDS – we learn at an early age when we do something good, we get a REWARD. Cookies, trophies, prizes, freebies, there are a lot of different rewards – and people love them all.
Businesses can reward existing, loyal customers through credit card or email database programs. If someone is a Frequent Customer, reward them after a certain number of visits (or it can be a certain $ amount spent). Once a month or a quarterly reward can be the incentive for a customer to return more often. Rewarding NEW customers is also a smart move, give them a reason to come back.
Knowing someone’s name: When people walk in to a business and are greeted by name, they feel important and tend to become loyal customers. Owners and staff that remember customers, welcome new customers and offer help make it more comfortable for people to return. And happy customers will bring others with them.
Birthday clubs rewards – create a data base that rewards customers in their birthday month – a great way is to give a FREE item with any other purchase, so customer has to come in to redeem. And WHAT you give also needs to be worth it to customer to come to your business. Do NOT offer a % off or something too small to be worth a trip. If you wouldn’t go somewhere to redeem it, neither will your customers.
Test NEW items, food or merchandise – ask your loyal customers to take part in a testing, and allow them to bring a guest. Examples are FREE wine tastings (on off hours if possible) or new menu tastings in a restaurant; a service business, for example a day spa doing massages or facials, which are typically 1 hour or more, can offer a free 1/2 Mini session to long time customers., or a free sample of a beauty product with any paid service.
Rewarding long time and loyal customers means a business should be starting off each month with a higher base of customers than the previous month, and therefore the business will grow. Little things add up, but some can also detract from a customer deciding to patronize one business over another. Be very careful when raising prices – ANY raise can cost a business 10-15% of their existing customer base – so make sure the raise is worth it! Find ways to #CreativelyIncreaseSales.
Check out future blogs on some hints and ideas on how to increase sales revenue – and how to incentivize your staff to help grow your business.
We all know bringing in #NewCustomers grows a business. Advertising and Marketing help find those new customers. But if not done correctly it can actually HURT a business. Many of us that deal with small businesses know how tight their budgets are, and, unfortunately how they usually feel that advertising and/or marketing is an expense they can afford to cut.
I once had a client, a service business (people had to make appointments) that swore the advertising & marketing was not working. They were not growing. I knew something other than the advertising was probably the reason. So I suggested we look over the income, customer base, old and NEW customers, types of service – basically an overview of the business itself.
What I found was astonishing – they were getting NEW customers every month, but the owner was right – they were not growing. The owner blamed the advertising. Amazing! I tried to explain that it has to be an internal issue causing the lack of growth. Customers were not coming back. I tried to explain if you are bringing in new customers each month and your customer base was not growing, then it seemed obvious – at least to me- that the customers were not coming back and you were losing existing customers. It was hard for the owner to see and admit that something internally might be the cause. I explained we needed to find the reason before spending any more money on advertising and bringing in more new customers.
Owners need to realize that advertising and marketing has to have in-house systems supporting the plan for it work properly. Businesses need to work on How to #KeepCustomersHappy so they return. Once the Marketing Plan shows results, the business and staff need to do their part to make sure it continues to work. It is better to start off each month with an ever increasing customer base than to have to spend more $$ to just maintain numbers. It should not stop at bringing in NEW customers – you need to appreciate your existing customers.
They are a number of ways to achieve #CustomerSatisfaction; Rewards Programs, some of which are built into credit card company services, are a great way to track # of visits and/or $$ amount spent each month by customers – and then reward them with a special. WHAT you reward is important. A % Off is NOT a reward. It has to show the customer that they are important to you. It should also help increase your business, have an expiration date, have and not be too complex with restrictions. For a restaurant an example would be 2 FREE desserts with any 2 meals purchased in house, and have an expiration date. Service industries – add an extra service, for example a Spa can add a product or longer service. a Marketing person can help pick the right item so it helps your business.
This accomplishes a few things – it shows the customer you value them, brings them back in, maybe sooner than they would have without the offer, is an add-on item so it does not take away from an existing sale, and it can get them to try something they had not. If the product, service and experience are GOOD, customers will return.
Future blogs will be about how #GoodCustomerService can make or break a business. Little things businesses can do to help make decision in their favor when people are ready to shop, dine, or have a service done.
Business people presenting their services or products say one of the hardest things is how to close the sale.
Sometimes wording can made the difference. Try not to ask Yes or No questions. MOST people will say No – at least at first. But if you give them a choice that does NOT include NO, your odds of closing a sale, or at least getting enough info to close the sale greatly increase.
Asking their opinion is a good way to establish rapport, yes or no can be perceived as confrontational and pushy, and, of course, a NO ends the connection. Sometimes trying to close a sale too quickly makes the potential buyer leery that they are missing some info and making too hasty a decision – or worse, making the wrong decision.
Take the “mom & cookies” scenario. kids ask – Mom can I have a cookie – without even processing the question – Moms say NO immediately, most of the time. No question as to whether it is too close to a meal, or any reason why the child shouldn’t have the cookie. Kids ask over and over, and always ask Why can’t I have a cookie? – til Mom reacts 1 of 2 ways… Because I said NO! or sometimes, for the lucky kids, an exasperated YES, OK all ready! Either way Mom is a little annoyed. And she probably had no reason or them NOT to have the cookie in the first place. Same with business owners. Yes or No sort of takes the person who has to answer out of the decision – a CHOICE makes them part of the discussion, and they feel they had the proper information to make decisions. A YES is too scary, leaving them questioning the decision. A NO seems to feel like you are not making a bad decision too fast, and without enough information. But you could be passing up something good. Options are just that – options, and give you more time to think about a decision.
Does it work – what do you think?! YES or NO
(bet you aren’t sure how to answer, so most will say probably NO!)
But if the question was – do you think doing A or B would be better for you? You get info, the business owner gets to weigh 2 different options. They see you have solutions for them. And it is not as confrontational a meeting or phone call. And with an option answer, they usually do not just say NO.
When trying to set up a meeting by phone, if you ask can we meet – odds are, you’ll get a NO. But, if you ask, what is better for you, next Mon at 10am, or Wed at 2pm? you stand a better chance of getting the appointment, if not at one of those times, possibly an answer would be – actually, Tues at 11am is better for me.
Try it – it can’t hurt. Which would you prefer – a NO or an informational answer leaving the conversation open for more opportunities?
It has gotten a lot harder to look for work or clients with the trend towards remote interviews, and outside HR departments. Job posting sites are a help and a hindrance. Companies get hundreds of resumes for each job they post, and a lot of them do not even fit the description of the job listed. Yours can easily get lost in the myriad of applicants. Interviews are rarely in person, and even though you see each other on a Zoom call, it is not the same as person to person.
How can one person stand out? It may be time to do some of the old fashioned #it’swhoyouknow type of prospecting for work or clients. Talk to people you know – talk to the businesses you patronize. They, or someone they know may need some help – and if they already know you, that’s half the battle.
Years ago, a friends daughter was in college and I was on the board of a charity – organizing a golf tournament. As with most charities, we could use all the volunteer help we could find. My friends brought their daughter, and she was such a great help that the non-profit wound up hiring her! She went on from there to do extremely well in her chosen field of social work.
Right now it’s hard to volunteer, most of the in-person events are on hold…but…you can still “talk” to people you know. Emails keeping in touch, maybe a phone call to some, or on social media. Mention to contacts what you are looking for, what type of job, or client, or even a service you need. Keeping you in their mind and working through referrals is still a great way to prospect and network.
Things have changed, and probably after the Covid lock downs are lifted life won’t go back to pre-covid norms, but we all have to adapt. Doing nothing will get the only guaranteed result- NOTHING!
Although 2020 has been a very strange year that will never be forgotten – life, and business, has to go on.
It’s time for business entrepreneurs to #takestock – time to decide if and what business you want to keep, or what new business prospects to pursue in 2021. With the past months of restaurant and retail restrictions, curfews, and general cut backs on spending and with Holiday shopping over – people are trying to get back to normal – if there is really a return to normal. Most feel that we will have to accept a #newnormal, especially for businesses.
ALL businesses were affected and more of a negative impact has been, and is, being felt by small locally owned businesses.
It’s time to take stock and see if you can adjust your business services to fit with the lower budgets, and smaller number of clients to go around. Owners will be much more careful of how and where, and with whom, they spend their limited budgets.
Look at what you offer in a new light– try to see it from the prospective of an owner who has a limited budget to spend. See if YOU were doing the buying or contracting for services, would this be what you could afford and bring you the results you want? While it’s still true that you have to spend money to make money – it does have to be a carefully thought out decision.
A lot of small local businesses have closed, and more will unfortunately close in the coming year . Make sure what you do business-wise is really what you want to be doing. MANY entrepreneurs are looking at new services to offer. If you can position your product or service to really help a business owner not only stretch his budget, but truly help keep them in business and eventually grow.
We all need our salespeople, service people, entrepreneurs, suppliers and small, locally owned businesses to help keep the local economy thriving – we need to have all the $$$ we spend stay local.
No one can actually tell you what to do in your business for the new year and changed conditions, you have to sort of “go with your gut” and not make decisions while in panic mode.
We have a few more days before business life starts back up the first full week of January. Make plans. Make lists. Then DO something – it is still better to do something, than nothing.
Here’s hoping and wishing we ALL have a better, healthy, happy 2021 both in our personal lives and careers – Happy New Year!
Many businesses, especially small and locally owned, need to use creative ways to promote. In a previous blog, I wrote about Cross Promoting with other businesses in your area.
This will talk about HOW to USE the information you gather. It’s a waste of time and money to just run a contest, give away a prize, get information and feedback and then do nothing with it.
Entry forms: if using to build database for future emails – name, phone and Zip Code are important. Gathering information on zip codes can tell you where the bulk of your customers live. It’s a good idea to start off the entry form “box” with a couple of empty folded forms – people will enter when they see other entries.
Using the information correctly is vitally important. You may want an outside eye on this – getting a Marketing Consultant who can interpret this info and use it to YOUR Advantage can be a HUGE ASSET to your business and save you money in the long run – while creating new customers and cash flow.
After the contest: you should send an email newsletter out to your database, about the contest that just ended, what the prize was and WHO WON it – just a first name and initial of last name – do not give out personal info! (You had already hopefully sent out info about the contest and how to enter to your existing database.)
SPECIALS and TEASER: Run a special that you can announce to get customers back in quickly. Tease to watch for details coming on NEXT CONTEST!
Sales info: use your sales information to see what products were popular during the contest timeframe, IF sales increased, and any other feedback you may have gotten from customers. Then highlight the item(s) by running a promotion or sale, possibly with a buy 1 get 2nd half price or combo a popular item in with a package of 2 or more other products.
Customer flow: ask your staff, or take note yourself, what the popular days and hours were – you could even use different color paper for the entry forms to track day and/or times of entries – then possibly have a Special on the Off-Hours.
Follow-Up: make use of the information gathered by running either a SALE or in-store special – give the customers a reason to come back. With the tight budgets right now during Covid, businesses need to give the buying public a reason to choose YOUR place over a competitor.
With so many brick and mortar stores closing and going on line, small businesses need to be pro-active in creating reasons for consumers to come into and shop, dine, use the services of small locally owned businesses.
Remembering your customers names if possible goes a long way in a customer returning and bringing others with them, especially in a restaurant. Everyone wants to feel a little special!
Owners cannot do it all – getting the right help is so important in keeping a business viable!
Most business owners, managers and staff have heard the term #Cross-Promote at one time or another. But many are not quite sure or understand what it really does.
Cross Promoting with other business(es) in your area can extend your (and their) budgets, save you $$$, and generate new customers.
Running contests in your store is a good example. Find a business that doesn’t compete with you (you would not believe how many times I have heard of contests that have actually LOST customers for the contest running merchant!) – ask them about being part of the contest by providing a prize for the winner. A small item AND a Gift Certificate to their store (as well as yours) so winner has to actually go into their store to claim prize. Do not use % Off or BOGO coupons as prizes! Value of prize should be worth enough for people to want to enter and win. At least $25 but of course the higher the value, the more entries you’ll get.
Too many prizes are beautiful items or gift baskets OR even worse, I have heard of owners (and marketing professionals) sending prize to winner. You want them back in your business and the other prize contributor stores. Prize(s) should be worth a trip back for the winner. Contests and prizes are a great way to potentially gain long term customers and create some talk about your business.
Both businesses should hang up signs in the business and on windows facing out explaining the contest, and have both logos, business addresses, web and social media info. You should provide the other business with the signs and flyers – the easier you make it for them, the more likely they will participate in your promotion. I would suggest saying 1 Entry per person per visit. Age requirement. No purchase necessary. There is other fine print you can add to help make contest more successful and run smoothly.
If you want to build or increase an email database, then use forms for people to enter…name, email and/or phone number as well as ZIP CODE. Zip code will give you info on where customers are coming from. Provide the business giving you prizes with the info at end of contest. Learning how to successfully use the info you gather for future sales, promotions, specials will be in a future blog.
Both of you should promote contest in store, in advertising (if doing any) and on social media. Contests can also be run on Facebook, and mobile phones or apps but those are subjects for another blog!
Have an entry box in your business, NOT right at front door – you want people to walk through store and see what you have to offer.
- Contests should not run too long. 1 month is plenty.
- Keep it current – be seasonal or topical.
- Prize should be a good value to winner
- Prizes should be able to be used soon, so not forgotten by winner
- Be HONEST when picking winner!
- Notify winner and give no more than 2 weeks to claim their prize.
Future blogs will touch on more details and some other ideas to create new customers, and excitement about your business.
If you are interested in talking to me about these and other types of creative and cost effective ways to promote your business, check out my website with contact info. BestMarketingNC.com