Increasing sales using your price

In my last blog I spoke about increasing sales and all the elements that make this up. One of them is pricing and for most of us pricing is difficult. Do you use the following method to price? – more expensive than the cheapest competitor and less expensive than the dearest competitor.

Is that the way to do it? I don’t think so…. we rarely make buying decisions based just on price. If that's the case we wouldn’t buy pre-packaged lettuce (300% more expensive that washing it yourself!), we wouldn’t buy Coca Cola (Pepsi was the preferred option in taste tests!), we wouldn’t buy new cars (we all know 2^nd hand cars offer better value for money!).

So if you don’t buy on price why do you assume your customers buy only on price? I’m afraid it’s all in our mind, so we really need to expand our thinking on this one. After all if you put your prices up by 10% how much more profit would you have in your business? If your sales are £100,000 then that’s another £10,000 in profit. Now you may lose some customers but how many would you need to lose before you made no extra profit?

You would still be less busy for the same profit. What changes could that allow you to make in your business? What other opportunities could you take?

I’m not suggesting you just put your prices up, there are lots of different ways of doing this successfully and this blog is just too short to go into them. I do have free webinar you can listen to that takes you through how to do this. To register go to pricing webinar

Next blog I’ll reveal how getting your existing customers to do one thing could solve your sales problems for ever.

The Secrets to Selling More

We recently carried out a survey and got some real insights into how people are coping with the current business climate. Many thanks if you’re one of the business owners who've completed it.

What you told us is that business growth is a challenge and over 79% of you were looking for more customers. Getting new customers is one key piece of the puzzle that makes up your sales - but it might not be the most important piece.

The way to think about your sales or turnover is to break it down to its different elements. These are:
- Customers
- Price
- How often your customers buy from you
- How much they buy at one time
- Defection rate ( ie how many of your customers return time after time?)

If you’re always chasing new customers then you might just be pissing off your loyal customer base. Have you ever been annoyed by the great deals new customers get from, say, your telephone provider? Or bank? Or insurance company?  You might just be doing the same thing to your valuable customers because you don’t give them enough attention and you don’t do enough to develop customer loyalty.

Why do your customers leave?
The reason they leave and go to your competitor is down to the perception they have of how you treat them. And - that is you don’t care enough about them - 68% of the time that’s why your customers leave.

So just maybe you’re looking at the wrong thing! Do you have a loyalty scheme or offer them something that new customers don’t get? Do you thank them for being customers? Do you even like them? I hope you do and let them know.

It may be costing you a lot of money if you’re losing customers – and you might not even know you’re losing them. Do you measure this?

If you kept 95% of the customers you have and turn some of them into raving fans how much easier would it be to attract more sales?

What ideas could you come up with that would keep your customers loyal and help them spread the word to their friends, family and contacts? Take some time out and come out with some ideas. Let your imagination run riot!

Next blog I'll take you through how to price your product or service and how this can make a huge impact on your profit- in no time at all.

How to do everything and still have time left

In  a small business you wear lots of hats and if you're like me when you started your business you try to do everything yourself. 

One day you wake up frazzled and poor and wonder what exactly are you doing? It's called overloaditis. OK I just made that up, but we don't want to spend more money than we need to, right? And it's just not sensible spending money on getting someone else to do something we're no good at and that takes us 4 times as long, right?

As the Americans would say - let's do the Maths! You're doing your own bookkeeping, you hate numbers so you procrastinate for an hour (or two) before you sit down and do it. If you're hourly rate is £50 an hour that's already cost you £50 and you haven't done anything yet!! Then multiply that rate by 4 when you do something as it takes you much longer. So what are we up to for that month? Well let's be generous and say it takes you 6 hours, that's £300 plus £50. How much would it cost for a bookkeeper? Even if they charge the same hourly rate as you it would cost you £75.

You've also lost opportunities - how much could you have sold in that time? Or what else could only  you do for your business that would reap rewards?

And don't even get me started on if you answer your own phone. Instead of being interrupted midway through something and answering with a snarl. You could get someone really pleasant to answer and take a message. Freeing you up to do what you're great at.

Don't get sucked into false economies! Do yourself a favour and only do what only you can do....

Cash rich, but time poor

Are you too busy making money to have the time to enjoy it? I meet a lot of business people in the work I do. Some are really successful. A lot are doing OK, making money but working really long hours and usuallly 6 days a week.

 if you're continually tired it’s difficult to keep your momentum going. You may unknowingly give your customer poor service. And sometimes you might think ‘what's the point!’

Your health may suffer as you don't have the time to look after yourself. Relationships with family and friends may suffer as you are short-tempered and resentful of the demands they make. Your business may suffer as you spend most of your time working ‘in’ the business leaving no time for planning for the future.

Successful business people do at least 5 key things to create a business that delivers them great results. Just think how it would feel having more energy, having the time to exercise and eat healthily, having the time spend with family and friends in a relaxed manner.

So what are the 5 keys?

1.      Get your price right

If you don’t charge enough you will never make enough profit and you wil spend your time just trying to keep up with your work

2.      Delegate or outsource

You can’t do everything so don’t try. Why spend the time learning how to use book-keeping software when you could be marketing or meeting prospects?

3.      Differentiate yourself from your competition

Your customers will only choose you on price if there’s nothing that differentiates you from your competitors. Know what makes you special (in the eyes of your customers, not your mum!)

4.      Know who your customers are

Not everyone is your customer so you need to pick who you want. This will dictate everything you do in your business

5.      Measure what’s important in your buisness

Don’t leave it to chance. Decide what measures are important to your business and look at these regularly (and by that I mean monthly)

If you would like a free copy of my e-book ‘7 Mistakes Small Business Owners Unwittingly Make…. and how to avoid them’ then email gloria@murrayassoc.co.uk

How do you know if you charge enough for what you do?

 Are you cheap? Are you good value? Do you give customers great service? You have to choose which two are important to you as you can’t be all three – it just doesn’t work. Something’s got to give.

Pricing is key to the profits in your business. Over the years I’ve seen so many businesses go out of business because they didn’t charge enough. They ran themselves ragged doing a great job and giving great customer service at really low prices. But in the end it wasn’t enough and they gave up. It was too much like hard work and without the rewards.

So think about what you do. Have you forgotten to charge for something that’s an integral part of your product or service? Is there something that takes longer than you had anticipated when you first set your prices?

Are you being unrealistic about the quality of customer service you can deliver at the price you charge? Please don’t drop the quality of your service, your good customers will happily pay more for this. Do you like crappy service? It costs more but it’s not something you can compromise on.

Do yourself a favour, have a look at what you do and how you charge for it. At the end of the day your customers will choose on price if that’s the only difference between you and your competitors. Give them bloody good service and let them know you care. They will pay more and stay with you longer

How do you feel about change in your business?

It can be hard to change what you’ve become used to. But in reality business is all about change and reinvention. Nothing stays the same, society changes, what’s hot and what’s not changes. We’ve got to keep up with this or our business will shrivel up and die.

Have you ever seen this happen to any business?

I can think of a few examples in the recent past. Woolworths for one, Oddbins being another. There were undoubtedly lots wrong with them. But the 3 that are easy to see are:

•    they didn’t move with the times
•   they did nothing to combat the threats from competitors
•   they didn’t analyse the way their markets were going

So how do you manage this along with everything else you have to do in business? It’s back to the business cliché – spending time working’on’ your business and not ‘in’ it. In practical terms it means taking time out, at least once a month, to examine what’s happening in your business and create time to think up new ideas. You don’t have to do it all yourself, if you have a team they will be happy to help – once they get used to the idea of being asked!

Get a non-exec, a mentor, a coach, a business friend or someone you know and trust. Ask them to come and spend at least an hour and  half with you each month looking at your business.

You can’t see the label when you’re inside the bottle! It’s the same in business – an outsider’s perspective is wonderful. It will hold you accountable for all the things you know you need to do. You will get to see your business through the eyes of a ‘customer’. You’ll have a sounding board for all the ideas you have, the worries you have and maybe the insecurities you have about your business.

Don’t take my word for it, why don’t you try it for 3 months? What harm could there be in that?

Who are your customers?

Do you give much thought to who your customers are? It’s really easy when first starting your business to go after anyone who will give you some money. Then after a while you find that your time is taken up with lots of customers, some profitable and a lot that aren’t. How did that happen?

If you’re in that situation what can you do about it? Take a big breath and get rid of the customers that give you most of the hassle, don’t pay on time, and want lots of discount. It’s the old 80:20 rule, 20% of your customers probably give you 80% of your profit and conversely 20% of your customers probably take up 80% of your time.

By getting rid of them you can offer the customers you do like a much better service and clear the way to attract the customers you do want. You will have more time to go back to your existing customers and tell them about the other products or services you offer and help them spend more money with you.

You can then think about who your ideal customer is and write a description of them. What do they look like, what age are they, do they have kids, how much do they earn? Whatever is relevant to building up your customer profile.

Once you’ve done that design your marketing to attract them. Your customer profile will dictate how and where you market and advertise. By the end of this process you will have a better business and you’ll enjoy serving the fantastic customers you have.