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- iHaveNet.com: Small Business Guide
Real Small Business
Many small businesses find themselves feeling pressure to lower their prices.
It may come when a low-priced competitor shows up in your market, or when a pinched economy hits your industry. Yet few small businesses can afford to get themselves involved in a price war.
There are a handful of times when dropping prices makes sense; for example, when your cost of doing business has dropped and you want to pass along these savings. But if your existing prices are set to cover expenses and necessary profits, lowering them could damage the bottom line. What's the answer? Consider using these tactics to attract and retain customers without getting out the red pen.
Emphasize customer service
By demonstrating the added value you give customers, you may be able to justify higher prices while keeping the competition at bay.
You can showcase superior customer service through generous return terms, longer than average warranties, free delivery, express ordering for regular customers, or other customer care techniques. This tactic is more strategic than getting into pricing wars with competitors because it encourages long-term client relationships. Competing on price often leaves companies catering to fickle customers who may or may not return in the future.
Package products and services together
You can create more value for customers by grouping related products and selling them for a price that is greater than any single item, but less than it would cost to buy each one separately.
For example, a bookseller might package elegant pens with journals or a dictionary with an atlas and thesaurus. This tactic can help you avoid permanently reducing prices on any single item while increasing your overall sales.
Decrease amount along with price
If you find the market is demanding lower prices, consider whether or not there is a way to offer goods and services in smaller amounts.
For example, if you're a Web designer, are there efficiencies you can build into the project development process that would allow you to offer services at a lower cost? If you sell beauty supplies, can you package products in 6.5-ounce containers rather than 8-ounce? This tactic can give customers the perception that you've lowered prices while helping you to keep costs in line.
Add services
Instead of cutting prices, maintain them and include an additional service for the same amount.
For example, a bookstore owner might offer free gift-wrapping with each order, or a personal trainer might offer an hour of nutrition counseling with the purchase of 10 sessions.
Small Business Guide
- Starting Up Your Business
- Coming Up With a Winning Business Idea
- Common Startup Mistakes
- The New Rules for Startups
- Business Incubator FAQs
- Naming Your Business
- Researching Your Business
- Your Personal Savings
- Registration, Licenses, and Permits
- Getting a Tax ID Number
- Fast-Growth Startup Resources
- Structuring Your Business
- Overview: Corporations
- State Offices of Incorporation
- Incorporate Out of State?
- Writing a Partnership Agreement
- Choosing a Board of Directors
- Basics of a C Corporation
- Basics of an S Corporation
- Basics of an LLC
- Basics of a Sole Proprietorship
- Basics of a Non-Profit Corporation
- Basics of a Professional Corporation
- Basics of a General Partnership
- Basics of a Limited Partnership
- Your Company's Public Relations
- Elements of a Successful Public Relations Campaign
- How to Use Your Press Coverage Effectively
- Press Releases
- How to Write a Successful Press Release
- Sample Product/Service Press Release
- Sample Commentary Press Release
- Sample Event Press Release
- Sample Tips Press Release
- Sample Personnel Press Release
- Effective Competitive Analysis
- Managing Purchasing to Maximize Cash Flow
- Top Six Pricing Mistakes Businesses Make
- How to Avoid Lowering Your Prices
- Bidding Basics
- Hiring Staff
- Creating an Effective Job Description
- Do You Know How to Pick Them?
- Little-Known Hiring Resources
- Classifying Contract Workers
- Tips for Successful Interviewing
- What You Can't Ask in a Job Interview
- New Hire Paperwork
- Small Business Insurance
- Types of Insurance for Small Businesses
- Small Business Insurance FAQs
- Insurance Resources for Small Businesses
- Home Office Insurance: Myths & Realities
- Small Business Resources
- Government Resources for Small Business on the Web
- Resources for Women Entrepreneurs
- Fast-Growth Startup Resources
- Small Business Security Resources
- Taking Time Off
- Your Pre-Vacation Checklist
- How to Take a Vacation
- Learning to Delegate
- Getting Away When You Can't Get Away
- Preparing for Tax Season
- Year-End Planning Tax Savers
- 10 Ways to Pay Less in Tax
- 25 Common Business Deductions and Expenses
- Avoid These Common Errors and Audit Triggers
- Understanding the Home Office Deduction
- Corporate Income Taxes Primer
- Employment Taxes Primer
- Sales Tax Primer
- Sole Proprietorships and Partnerships Tax Primer
- How to Get a Filing Extension
- Year-End Reconciliation
- Getting the Most from Your Accountant
- Developing Accurate Financial Projections
- Cash Flow
- 10 Ways to Help Increase Your Cash Flow
- Cash vs Accrual Accounting
- Bookkeeping and Record Keeping Basics
- Quick Ways to Get Through a Cash Crunch
- Projecting Cash Flow
- Cash Flow Triage
- Getting Funding
- Cash Flow Through Factoring
- Small Business Investment Corporations (SBIC)
- Traditional Funding Sources
- Non-Traditional Funding Sources
- Your Company's Credit
- How to Read a Business Credit Report
- Credit Terms Glossary for Your Small Business
- How to Protect and Improve Your Business Credit Rating
- Give Your Business the Financing Edge
- Employee Compensation
- Employee Benefits
- Bonuses: How To Be Fair
- Workers' Compensation Q&A
- Keeping Workers' Compensation Costs Down
- Payroll Management Choices
- Key Elements of Payroll
- Working with a Payroll Service Provider
- How to Create a Business Plan
Starting Your Own Business - Tactics to Avoid Lowering Your Prices
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