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Posted by: Today's Tip Contributor on November 13
In an uncertain economy, your customers may be watching their pennies. If you are working to increase your profits, you may feel like you are swimming against the tide. However, with some clever repackaging of your products and services, you can come out on top. Here are a few examples to help get you thinking about how you can tackle your own situation.
Example 1. If you own a styling salon and charge $35 for a standard woman’s haircut that takes one hour, figure out how you can repackage that haircut so you can charge $20 for a 20-minute haircut. The service is going to be different, so you have to rename it. What you finally offer is a "Quick Cut for ONLY $20." If you can schedule two quick cuts in an hour, you are money ahead, and your client is happy because she has paid less for an acceptable cut.
Example 2. If you manufacture a product, you may need to take a similar approach. Find a way to sell a part of your product that is highly profitable for you and yet still a serious cost savings for your DIY customer. You may also need to look at the pricing structure of your lower-end products to make sure they have an acceptable net profit, and then push them into the market. High-end buyers will not be tempted by DIY products and will be willing to pay the premium required to get the high-quality product they want. The middle-market customers will move to lower-market products (though not necessarily the lowest end) until they again feel rich enough to buy the midline products.
The challenge is to rethink your approach so you can increase your business and profits during a time of economic uncertainty.
Marilyn J. Holt, CMC
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