Responding to change
Six ideas for fine-tuning your business offering
Companies of all sizes have now weathered the worst of the dot com doldrums, yet cautious customers and suppliers still demand value for every pound they spend. With a demanding clientele and climate, the best way to attract new customers and retain existing ones is to fine tune your existing products and services to suit market conditions and changing demands.
This article looks at six ways to adjust your business to market conditions so you can build sales in the months to come.
1. Sell More for Less
There's a good reason why fast food restaurants offer a free soft drink or discount order of chips if you buy the bigger burger: It's profitable.
"Do you want fries with that?" is one of the most profitable sentences ever spoken.
The objective of this sentence is to encourage each customer that walks through the door to spend more money per order. And it makes sense, because once your customer makes the decision to buy from you, it's more cost-effective to sell them additional wares than it is to start from scratch attracting new prospects.
The idea is to pair solid value with tempting convenience. It's called upselling and it's all about striking while the iron's hot; while the wallet's open.
Upsell your way to profitability
To make this work for you, examine your inventory and bundle a few items that have natural affinities.
For example, a garage might combine an oil change, tyre check and valet into a package deal to add value to the sale of a single service. A dentist might offer a special price on x-rays with each teeth-cleaning session.
Dr Ian Alcock runs Cotswold Aromatherapy, a �100k turnover company that was profitable within the first three months of trading. Pricing properly to position the business well in the market has been a key success factor, along with bundling products together.
"Competitive pricing gives us high volume. We do sell a lot, and once people have bought from us once, they tend to buy again," says Ian.
Paulette Ensign of Tips Products International has also used upselling very effectively in growing her business from a single booklet on 'organising your business life' to a range of information products that includes videos, workshops, audio cassettes, additional booklets and licensing deals.
2. Sell less for more
Rather than packaging up a number of services to sell more to each individual customer, you could try selling less for more.
For example, service businesses, such as consulting or creative firms, might un-bundle their annual contract services that require annual fees and monthly billing. Instead they might offer single per-project services and higher prices. This would be a particularly preferable route to take should the market decline or should it become evident that clients would prefer not to be locked in to a committed course of action. This can also be a good way to encourage new clients by offering them a taster of your services.
To attract business in this instance, you should step down from full-service contracts and offer component or single-project services, priced accordingly.
3. Reassess your target markets
To widen your customer base, consider changing your marketing channels and messages so you appeal to different customer segments.
For example, Cotswold Aromatherapy started life as Cotswold Herbs, selling herbal remedy chests. However, after poor sales, Ian took the decision to split these chests up and focus on essential oils and aromatherapy instead.
"We've now removed tea and herbs from the site, because of short expiry dates, low profits and high minimum order costs," explains Ian who has found fine tuning his products and target audiences has reaped rewards.
As well as targeting end-users of his products - consumers, Cotswold Aromatherapy has also turned its attention to supplying the trade. Now they are the supplier of choice for hospitals (North Tyneside District Hospital & 'Sure Start' Obstetrics in Newcastle on Tyne who use Lavender Oil for pregnant patients), aromatherapy schools and private practitioners throughout the UK and the world.
Opening up to additional niche markets has widened their customer base and increased turnover. Are there any wider market segments that you could tap into? Have you exhausted any of your existing target audience sectors?
There are other ways you can reposition your message. Clothing retailers and restaurant owners can send out postcards or promotional flyers advertising special offers or discounts that specifically target teenagers. Financial services can target younger couples rather than only older, wealthier clients. Younger couples may not yet have major money to invest, but they are starting families and thinking about financial security.
Similarly, estate agents, for example, may find they've exhausted a client base of young, first-time home owners and, as a result, might try to appeal to older home owners who want to retire and buy a smaller place to live. That would require a very different set of marketing messages and a shift in how they develop leads and client referrals.
In this example (shifting from selling to the youth market to targeting seniors), you might invite members of local seniors clubs to a seminar discussing house prices. You could then invite lenders or travel agents to talk to the audience about their opportunities. To boost response, post a round of follow-up postcards as reminders. The market you are targeting and the products/services you sell will define which materials and strategies you choose to reach that market.
4. Make your business a destination
As customers become shrewder, you must give them a compelling reason to buy from you rather than from your competitors. That translates into services, values, or products that make you stand out from the crowd. Give value, offer quality and encourage action. Here are some ideas to help keep your customers coming back for more and taking the action you want them to take.
5. Become a trusted expert
Of course, you also need to create emotional reasons for customers to buy from you that focus on trust. Certainly, if you become the trustworthy authority in your field or community, your prospects are more likely to seek you out and referred business can become a regular luxury.
One great way to become a trusted expert in your field is to create a monthly or quarterly newsletter that publishes insights, information, resources, or product support - reading material of great value and interest to your target audience.
For example, doctors might develop a health-related newsletter on nutrition or fitness with links to health reports or products on their websites. Computer consultants might create newsletters that offer technical tips or software guides, top ten lists and special offers.
As long as the newsletter provides tangible value to the reader they will come to regard it highly and pass it on. So don't use the space to boast about your company and how fantastic it is. Find out how to create and mail a newsletter (Acrobat PDF download).
6. Announce how you've changed for the better
You'll need to evaluate what market adjustments you should make, and these will vary depending on the type of business and industry. So, put yourself in the shoes of your customer to help establish what refinements to your product or shifts in your message or audience will work best.
And you needn't spend a fortune on materials when spreading the word about the positive changes to your business. You can use a desktop publishing program like Microsoft Publisher to design and print direct mail bulletins, postcards, newsletters, leaflets and flyers - all you need to announce your refined offering. These designs can then be saved as a template and regularly updated with future special deals. Newsletter template - download now.
Once ready to print, you can send the file to be professionally printed (for larger mailings). For shorter lists, you can easily mail merge and print to a colour desktop printer yourself.
Use these promotional materials to announce your freshly packaged services to loyal customers, or inform clients of your new fee structure. Flyers can have a detachable coupon redeemable for a second package to encourage further action.
If you're in retail, provide a stack of flyers for shop visitors to pick up to create some word-of-mouth buzz about your new deals.
Evidently, effective marketing doesn't depend solely on huge investments of time or money, but on flexibility and creative strategy.