Are Low Prices the Answer?

Small businesses are in a bit of a pickle right now with the not-so-great economy.

So what's a small business owner to do? Well, you may think dropping your price is a great way to attract new clients! However, there are a few things to consider before you make those price cuts.

Fact #1

Price Indicates Value

You've heard the saying, "You get what you pay for." Most people automatically assume the price indicates the value of a product or service.

This month was my husband's birthday and he really wanted a new digital camera. So when I went shopping, which camera did I immediately gravitate toward at the store? The most expensive one on display!

When shopping for quality, most people shop for the highest priced products or services they can afford. They assume that price indicates value. Keep this in mind when you're considering dropping prices.

Fact #2

Low Prices Often Mean Low Margins

Make sure you do the math before drastically reducing your prices to attract new customers. You may end up with too much work and little profit!

Fact #3

Low Prices Do Attract Business

A low price almost always attracts new customers (especially during a not-so-great economy.) However, you should ask yourself if these customers are the type you really want? For long-term business success you need loyal clients. These clients will keep coming to you because of the quality job you do, not necessarily because you dropped your prices lower than the next guy. This brings us to our next point...

How to Increase Business Without Dropping Your Prices

There are a few ways you can increase business without fighting a price war.

• Develop customer loyalty programs. After a customer makes a purchase, offer them a discount or other incentive if they return to you next time they need your services. This saves them money, but it also assures you of another sale!

• Offer discounts to those who refer you to others. Referrals are said to be the most trusted form of advertising. Encouraging referrals is a great way to earn more clients without simply dropping your prices. Offer discounts or other incentives to those who refer you to others. What a great way to keep existing clients and gain new clients!

• Provide more value. There are many ways you can do this. A few of our recommendations: protect your client's floors by wearing ShuBee Shoe Covers, keep in touch using ShuBee Report Cards and develop trust by wearing your Seal of Trust Patch. These may seem like small things, but they really increase the value of your company because it shows you care about the customer, not just their money. This is a way to make clients feel like they're getting a good deal, even at your current price!

Well, if you haven't noticed, it looks like dropping prices isn't the only answer to increasing business. There are many other creative solutions to earn long-term business during a not-so-great economy. Call us any time to talk about other ways to add value to your business.