Monday, February 2, 2009

The Wal-Mart Effect is Making People Crazy...

I am going to address an issue I have been seeing getting taken out of context. It seems a lot of of small business owners are looking to go the way of Wal-Mart and go "lowest price".

Before you end up on craigslist selling your service for $25 an hour, you better realize that will not save your business. In fact it will likely kill it.

Most of us who give homeowners a service like window cleaning, house cleaning or carpet cleaning don't usually service Wal-Mart folks. I can tell you right now I would be surprised if any of my customers shop at the discount juggernaut. Go sit on the bench by the door and count how many of your type of customers walk through. I could sit there all day and not see one.

People are saying "but Wal-Mart's sales are steady while Target's sales have dropped". Yep, that is true. The misleading part is that Wal-Mart is not taking Target's customers, Target's customers are just buying less in these uncertain times. There is also FAR more low income shoppers that have to have cheapest price to live.

We want to target consumers with disposable income. Sure they may be holding their money a little tighter, but that is okay. Just stay patient and keep your price elastic.

How do you not become a bottom feeder?
  • Instead of cutting prices, offer limited specials.
The Financial Aid Deal

While our country is working out the economic crisis,
we are offering you the best price we can.

For a very limited time you can get 20 windows cleaned
inside and out for only $179 (normally $199)

Expires May 15th, don't forget- Call now!

If you do not give a reason and deadline you risk not being able to raise prices back up. If your competitors come down in price, now the entire industry standard drops. Quality will fall, customer service will fall. The only thing that will increase is frustration and hatred for your business.

Another thing you can do instead of lowering price is add on a freebie. Build value into the offer rather than decrease dollar amount.

The Stimulus Package

Sign up today for a full interior and exterior
window cleaning and receive gutter cleaning for FREE!

This $79 service is your FREE if you call now!

Offer expires May 15th, call now

Of course these are just made up prices and service add ons. Look into your business and see what kind of add on service or product you can give away to maintain your price. Don't focus on what the freebie is costing you. When your phone stops ringing you will not be selling much of either, you might as well sell one for full price now and sell as many as possible.

By doing this you really do not lower the price of the freebies regular price or your main service price. Once the market bounces back you are golden.... and your competition has to figure out how to raise their prices back up without losing all their customers.

Until next week

Go get some!

Paul


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