You don't always have to slash prices to stay competitive. There are many great ways you can add value to your goods and services at little or no cost. Learn how to keep your customers coming back while your competitors discount themselves out of business. Here are 9 ways to protect pricing and keep customers.
1. Offer extended hours.
A fitness facility near me is open to its card-carrying members 24 hours each day, 7 days per week, giving the company a significant benefit over similar businesses, many of which closed last year. Competing with the local Y and its depth of offerings is difficult but there is a special appeal of a 24/7 site for those who work long or unusual hours. The company uses a security system with card access instead of staffing the facility on an around-the-clock basis.
2. Be reliable.
A home remodeling contractor I have engaged on multiple projects is probably not the cheapest I could hire. But, unlike many others that my husband or I have contacted in the past, he does return phone calls and is willing to quote on any project, no matter how large or small. His business practices position him as a top-notch provider: offer creative solutions to repair and improvement projects, provide detailed estimates that include in-progress scenarios (such as hidden water damage) that may lead to change orders, give estimated project start dates even if they are several months in the future, develop and abide by project timelines, finish as much of a project as possible each day and come back every day (or explain why you aren’t making an appearance) until the project is finished.
3. Recommend appropriate services.
Rather than promoting an entire suite of services that may not be relevant to a particular customer, formulate and present recommendations that will provide precisely what is needed. You might even advise on what actions the customers can take to reduce overall purchase price and maintenance costs. But don’t leave out critical components just because a customer balks at pricing; explain ramifications of doing without key items.
4. Give value-added services that benefit your customers.
Universal Pallet Supply differentiates its products (shipping pallets, which are generally considered a commodity item) through vendor-managed inventory as well as specialized quality inspection and custom manufacturing programs. Taking the headache out of replenishing pallet inventory saves time for customers, and can benefit their businesses by avoiding shipping delays and preventing chargebacks.
5. Provide money-saving advice.
Though consumers are cutting back on spending, more are simply looking for the best value. Persuade them to pay $200 for a long-lasting product with must-have features rather than $150 today on an item that won’t serve their needs in the long run and force them to come back and spend $225 in a few months. Or, sell items at a lower price points by letting them know what features they’ll need (and which ones they’ll never use) based on anticipated applications. Focus here on protecting margins rather than pricing.
6. Offer payment plans for high-expense items.
Price objections can sometimes really be concerns about cash flow; payment plans may alleviate the concerns.
7. Sell unique products.
You don’t have to get a patent to sell unique products, which may command higher prices without incurring added costs. Ask your manufacturers to tweak their product lines for your company so that you can differentiate your merchandise offerings; or design, make, and/or embellish your own product line.
8. Present tiered pricing.
Many online service providers offer a basic, free service along with upgraded products using a tiered-pricing structure. For example, Automattic offers free WordPress blogging software with basic functionality along with premium features and upgrades for a fee. Online adventure game RuneScape uses a similar approach, offering free gaming as well as a fee-based, members-only version. The free versions let a customer get started without a monetary commitment so that when (and if) customers opt for upgrades and additional features, they’ve recognized the need to buy; cost justification is embedded in the purchase decision.
9. Deliver free training to customers.
Sharing your expertise at no cost is one way of reinforcing your company’s worth. At the same time, you reward customers for their support and give them ideas on ways to use your products and services.
Slashing prices may be a quick, simple reaction to drive sales during a recession or post-recessionary period. Customers may have become bolder in asking for price concessions and competitors may have started cutting prices to move inventory and keep workers busy. Price adjustments may be necessary in certain environments. Long-term ramifications for price cuts may mean that your company can’t be profitable enough to justify staying in business. Consider ways to give value to customers while protecting your pricing.