Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
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
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.