Are you in a constant pricing conversation with your customers or prospects? Are they always looking for the lowest price? This is common when you can’t bundle or create a “solution”. When thinking of a solution you are helping to solve a larger problem for your customers. Are you able to sell them a car or parts to build their own. If they are looking for parts – that reminds me of an 80’s Wendy’s commercial “Parts is Parts” I have never seen anyplace that sells parts consistently having; the fastest shipping, the lowest prices, along with the best quality. The case Wendy’s was trying to make was they had the best product and was not focused on price.
In your business, even if “parts” focused, what are your opportunities to create more solutions and value vs being in a constant knife fight on price. Don’t get me wrong, there are some customers that will be their only focus. You will need to decide if you can meet their needs and have a reasonable ROI on their business. By focusing on solutions, when possible, it will help your business have a higher level of profitability and add more value to your customers.
Let’s look at three tips that can be applied alone or combined as you see fit for your business.
1) Bundles – Is there a logical combination of products or services that if combined will create greater value for your customers. Think of cell phones plans, combining them with streaming services. Each part on its own if added together would be significantly more expensive. Bundled, they create greater value to the customer.
2) Additional Services – Consider auto shipment of products. An example is home air filters. Rather than needing to store extra filters or remembering to pick up a replacement every three months, the value-add is from removing one task from a customer’s busy life. The core product still needs to be competitive, but maybe not the lowest price. Do you have higher levels of support or installations services included vs DIY (Do it Yourself).
3) Incentives – Khol’s cash is an incentive that keeps driving return visits. What type of loyalty incentive can you offer that is time bound with reasons to return and purchase more. How about a reward for friend referral or at certain increments of spending, or length of being a customer. Find ways to reward long-time customers and slow down your churn rate.
Think through
Finds ways to create more value for your customers. There are some where it is all about price. You may win some of those but that can negatively impact your bottom line. As they say, no one wins a rush to the bottom. You need to be fair with your customers and ensure they are receiving overall value. This includes the say / do ratio. Do you do or deliver on what you said you would at a fair price.
Would love to hear your ideas, challenges, and success stories. Feel free to post comments or email them to me. Small Business, Big Lessons® – Remember, Solutions are more profitable than “Parts are Parts”!
Small Business
About the Author:
Gregory Woloszczuk is an entrepreneur and experienced tech executive that helps small business owners grow their top and bottom line. Gregory believes in straight talk and helping others see things they need to see but may not want to with a focus on taking responsibly for one’s own business. He and his wife, Maureen, started GMW Carolina in 2006.
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