March 3, 2011
The economic situation is rather difficult at the moment. Itâ€™s not just here or there, itâ€™s all over the world. And it has been lasting for three years already. How can businesses survive in such hard times? Most of the companies, especially the small and middle ones, who donâ€™t have trained personnel for marketing, have applied a policy of cutting down prices. But is that a good thing?
Cutting down the prices may seem as a good solution because, theoretically, it increases sales. But experts announce that this is not true. The only thing you can manage to do by offering big sales on regular bases is to decrease the value of your services or products and to accustom your clients not to buy regularly, but to wait for the discount period you will be throwing anyway. So, rather than helping your business remain profitable, the continuous discount policy makes your value decrease and your brand be less appreciated.
Experts recommend that, in such difficult periods, an added value policy should be applied. By adding value to your products or services you can guarantee for the success of your business. An exceptional product will always sell because people prefer spending more for quality than less for mediocrity. The return on knowledge is just as valuable and important as the return on sales. One cannot function without the other. Establishing the fair price is thus recommended. But how can you do that?
Well, in order to establish a fair price you should take into consideration the production price, you should add the additional costs that you have to pay for salaries, rent and so on and, only afterwards you should add the cost for the value of your product. This refers to the qualities that make your product unique on the market and it can refer to its technical and practical characteristics, to its high-degree of demand and level of satisfaction and to its advantages that make it professional. But how can clients become aware of that? Thatâ€™s just as simple as marketing! Create a pitch in which to emphasis the special features of the product â€“ state who is the creator, what were his major achievements that make him famous, mention the reason why your so famous brand has decided to work especially with that creator who delivers the best products on the market and, finally, state your call-to-action. This will persuade clients of the uniqueness of your product and will make them feel comfortable with spending more for a high-quality product.
Click here to access our database of venture capitalists and angel investors <==== So, make sure what the goal of your company is. Applying a cutting down the costs policy can make you, if well advertised, sell more and have a higher profit at a certain moment, but that will always stay just momentary. Moreover, that is an almost certain way of loosing clients as they will have less and less confidence in the products which you afford selling only on discounts. They will even stop being interested in your brand. But, adding value to your products, even if that means to increase a little bit the price, can guarantee you confidence and trust from you buyers. If you can also apply a happy customer policy, meaning to train your personnel to take care of every customer and to give your VIP customers some advantages from time to time (such as organizing a lunch for them or to offer them discounts on the bases of their previous sales), you can make sure that you will brand your customers as well and you will manage to turn them into faithful clients for life.
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