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.
Way too many small businesses are suffering during this extended Covid shut-down and slow-down. There are some ways to help jump start or keep your business afloat.
Now is NOT the time to stop advertising or keeping the public informed and aware of your business; use social media free posts or small amounts of $$ Facebook ads. It’s also smart to offer specials, do something unique and different to create customer traffic. It is also an opportunity to update websites, make sure they are mobile friendly, and position your business correctly in the most favorable and user-friendly way.
For example, restaurants are all competing for customers since people are not dining out as often, or with as many people as pre-covid; they are choosy about where they go and are looking for the best value for their money. Sometimes a special can make the difference on which place is chosen. Sometimes figuring out how to increase traffic during the seemingly “off” hours can make the difference between weathering this virus storm or going out of business.
So many businesses, retail stores and services are struggling and not able to pay rents, staff and suppliers. They either cut hours, what they offer, or decide to close, some permanently.
A creative approach can help keep you in business. I know many have said they cannot afford to hire an outside person or marketing firm right now – but it could be the boost desperately needed to continue to operate and make a profit – or at least cover expenses – til things get back to normal. For example, restaurants need their managers, waitstaff and cooks concentrating on their respective jobs and servicing the customers that coming in; they don’t have time to post or keep updating social media.
Consumers do look to social media for current info on hours, restrictions, if any, menus, specials and more. If information is outdated or missing, people will in most cases, choose another place.
If you are looking for some affordable help with this, check out my website for short-term marketing packages. www.BestMarketingNC.com
I write some blogs for some clients, so I decided to start one of my own. Some random thoughts and stories about business, people I have met and dealt with, and life in general.
I always wanted to write, maybe not quite aspiring to “The Great American Novel”, but something of interest, some funny stories, some that seem unreal, and some that just “are.”
A lot of people have told me “you should write a book”, and this could be a start.
Thanks for stopping in…
People are really funny and sometimes do things that are so strange, I find I just cannot even answer or comment. Working with people, especially at restaurant settings provide a lot of humor and strange happenings.
Here is odd example; One of my clients is Raleighwood Cinema Grill, a movie theater and restaurant all in one, a great place. If you are not familiar with the set up, there are both chairs at tables and chairs at a counter where you can eat your meal while watching a movie, if you have been there, then this will probably be funnier and mean more to you.
I happened to be there coordinating an event, when a staff member came in to kitchen and said a customer had his feet up on the counter… they had asked him to take them down, but he just put them back up again and again, and could I go and ask him to move his feet? ?
This falls under the “I can’t believe he said that” category- I asked him softly if he could please take his feet off the counter, people were eating not far from him…he then said…wait for it…… well I took my shoes off!
Just one of the funny, weird things we run into when working at or around the public.
I’ll be sharing some more of these in the future.