Tag: budget

CGC - How to Set Your Offerings at the Right Price

How to Set Your Services and Products at the Right Price (& Why I Don’t Like Discounts)

When it comes to pricing, you have to think about your big picture – your overall brand, the competitive landscape, and how you want to position yourself in the broader marketplace.

You will want to create and review a pricing model for each offering you have within your business, whether it’s a service, product or both. For each offering, from a revenue standpoint, keep two things in mind: 1) how your offering fits into your business suite (which is all the things you offer), and 2) how you want to position that particular offering in the broader marketplace.

You’ve got to ask yourself: How much revenue do you want to generate with this offering? And how much of each offering do you honestly think you can sell?

Then you have to know your costs. This includes upfront costs, variable costs, fixed costs, and anything that’s an ongoing cost. What do your profit margins look like when you factor these into your pricing model?

(Note: When you’re making your cost/expense estimates, I recommend making a list of everything you need and then contacting vendors and resources for pricing quotes. If you’re just starting out, I highly recommend you do as much as possible on your own. It’s always best to start as simply and as inexpensively as possible. )

After getting clear with your budgeting, it’s all about running the numbers and making some predictions. If this makes you feel a bit overwhelmed, just remember that we are all making guesstimates. We all have to start somewhere when it comes to pricing, and these projections get us going. My suggestion is to underestimate what you’re going to sell and overestimate what you’re going to spend.

Now, a quick note on discounts: I personally do not believe in discounting.

I believe in providing as much value as possible for the right price, but discounting that price at any point is not recommended, unless you’re beta testing something, or providing a specific service to a valued client base. An example of the former could be when you first launch a new service and you want your current client base to give it a try in exchange for some valuable feedback. In this case, you can discount for a testing phase of your service. An example of the latter could be if you decide to customize one of your services differently for a particular group of people, or a particular client. I often provide a discounted rate of a customized service to a local wellness community that I work with. I’ve been a loyal member of the community since it first started, and I continue to work with the owners regularly, so the discount feels good, and I’m able to provide services for those who may not be able to afford me under regular circumstances.

To some people, discounting makes sense from a marketing and sales perspective, especially when you’re desperate for cash.

However, and unfortunately, discounts are most often perceived as, and representative of, the following:

  • Lack of confidence: If you believe in what you do, you should sell it at the standard price.
  • Bad precedent: You’re setting the standard. As soon as you lower your prices, your customers will start to expect it going forward.
  • Lower perceived value: Most people value something based on its price. Throwing in a discount tarnishes the value you’re trying to provide.
  • Untrustworthiness: Let’s say you’re trying to make a sale, but it’s not going well. If you’re selling your service at its regular price at the start, and then you quickly provide a discount at the end to win the sale, your customer is going to question your honesty.
  • All about the price: The last thing you want to focus on during a sales conversation is the price, and that’s exactly what happens when you offer a discount. It’s hard to sell something based on price rather than value.
  • Profit cuts: What will the discount do to your revenue? You have revenue goals, and the only way to meet them is to stick to your planned pricing model.

So, unless you’re testing a launch of a new product or service, or you’re very comfortable packaging a service at a discounted rate for a particular group, then you shouldn’t discount your services. In the end though, it’s all up to you.

Just remember to do what feels good.

CGC - 3 Ways to Stretch Your Year End Marketing Spend

3 Ways to Stretch Your End-of-Year Marketing Spend

One of the most frequently asked questions marketers get is: “How do we extend our marketing budget and spend less at the same time?” It’s a question that makes some marketers cringe, but it’s also a legitimate issue we’re asked to overcome quite a bit. As businesses are preparing to review the year-end budget just before Labor Day weekend, and make ongoing plans for marketing spend, now more than ever is the time to get creative. Below are three ways to stretch your marketing spend for the rest of the year, without sacrificing quality of output and execution.

  1. Revisit data from previous years. Before you get too excited to head off for Labor Day weekend, take a big step back and really assess what has worked in the past. The wonderful thing about analytics is that, if the tracking is setup correctly, it provides you with an enormous amount of information. This includes anything from the ROI of a specific campaign to the amount of clicks a specific piece of content earned. Now is the perfect time to sift through your marketing campaigns and find out which campaigns truly made an impact. Then, creatively replicate the campaigns that worked in a way that is modern, trending and enticing.
  2. Recycle, reuse and repurpose. The end of summer is usually a time when your time is already spread too thin as it is. Fortunately, the old adage “if it isn’t broken, don’t fix it” still rings true, and this saying can actually help you in stretching the budget. As you’re reviewing analytics of previous campaigns, think about which content can be repurposed in a different context. The assets that you create are yours for the sharing, and they can be repackaged in ways completely up to you. Reuse copy that performed well or recycle an innovative email template that received lots of clicks. Recycling content here and there can save you time and money.
  3. Reactivate current customers. According to a study published in the Harvard Business Review, the cost of acquiring a new customer is five times more expensive than the cost of retaining one. The study also indicates that increasing customer retention by just five percent can raise profits anywhere between 25 percent and 95 percent. This serves as a great reminder to business owners to consider how you allocate your resources for acquisition and retention. By no means should you remove your customer acquisition initiatives altogether. Rather, spend some time assessing how you retain your current customers, and think of ways in which you can reactivate that relationship and their buying capabilities.

Enjoy the rest of summer, but while you’re at it, get creative with your marketing. After all, the these are three of the best ways to extend your marketing budget, and possibly even increase your bottom line.

Have any other strategies for stretching your marketing spend? Share them with me!