Small Business Owners: What Are You Doing to Increase Your Price Power on the Web?
How many times have you scoped out what the competition is charging only to find that their prices are all over the map? This is because each entrepreneur operates within a set of internal and external constraints unique to his or her venture. Within those constraints, the entrepreneur must carve out comfortable but sustainable margins. Further, every small business is as different as its owner, a human being with his or her own short and long run objectives, most of which will not match yours. Then consider the fact that the majority of small businesses do not survive the first five years, indicating that the majority of small business entrepreneurs are not exactly ideal examples to follow!
Given all these things, what the competition is charging should be the very last thing on your to-do list when determining your rate structure.
The small business sector is dominated by sameness. Conforming to the standards set by your competition will only make your target market more price sensitive and ultimately put downward pressure on your rates. Who wants that? Set yourself apart with one thing: a focused marketing plan. Here are some tips to give your business what I call “price power:”
Niche. In small business, there is no other way to sustain healthy profits. Yes, you could try to compete with the big guns but you’ll go broke doing it. These companies enjoy economies of scale that are out of reach for most small business owners, and thus, they can do a lot more for a lot cheaper. Fight the aforementioned sameness and offer a well defined product that services the narrowest market niche while still earning you a profit. If you do this one thing, demand becomes inelastic-your prospects will care not what you charge but rather how soon you can begin servicing them.
Get to the heart of the matter. Every single piece of business communication-whether it be email correspondence, phone consults, or the copy on your website-must focus on the desires of your target audience and how you will satisfy those desires. Note here that I did not say “needs.” On their own, needs are too subjective. Desires, however, are the stuff of life. Desires are our deepest needs dressed in the emotions that make us human. And most buying decisions are emotional. So if you tap into your prospect’s desires, you’ve tapped into his pocketbook, and probably avoided a drawn out negotiation over price.
Do something that no one else does. It doesn’t have to be expensive or all that original. It need only be difficult to duplicate and economical to sustain. If what you offer is one of a kind but of high value to your target market, price becomes a moot point. The easiest way to achieve this kind of advantage is by combining two or more skills into one service. For example, if you have a way with words and are an adept transcriptionist with a medical background to boot, offer to transcribe and edit presentations given by medical professionals.
Be straight up, but especially if you do business on the ‘net. Clarity in communications promotes trust. A lack of trust makes people clutch their pocketbooks, not open them. Why this fact is lost on so many webmasters I have no idea. E-commerce is a matter of course for most businesses now, so be conscious of the fact that alternative solutions are just a click away. Additionally, most business people operate on information overload and are quick to mentally trash anything perceived as irrelevant, vague, or just plain dull. Once you’ve got them by the heartstrings, be pointed with the facts. Exactly what results you will deliver, how you will deliver them, and to what benchmarks of success must be painfully clear when trying to persuade on the web.
These tips for increasing your price power are simple, effective, and cost nary a penny. You need only to invest your time and most ambitious intentions. For if you are not in business to earn a profit, then you are not in business at all.
