Summer
2008
Pricing
for your market
It is always an
interesting exercise to work with clients to establish effect
pricing strategies. There
are many factors to be considered.
They include product quality, competition, target
demographics and marketability, and most
importantly—profitability.
Let’s look at each of
these areas. First,
how is your product quality?
For many small businesses this is fundamental to
establishing a good reputation which allows the business to
succeed. Durable
products which provide lasting value in themselves establish
value and will demand a greater investment.
Researching and
understanding the other players in your marketplace is
essential. I never
advocate setting prices based on what the guy down the street
is charging. However,
knowing their pricing can help you in understanding where to
position yourself in the market.
You may be charging more and that is OK as long as you
understand why and can effectively convey the reasons to you
client.
Next, learn as much as you
can about your market area and the customers you will serve.
Find out what they value and research their buying
habits and where they spend their money.
What motivates their buying decision?
Your pricing structure should be a reflection of what
you have learned.
As you identify your
client base, be sure your products are appealing and
attainable. It is
harder to sell a Lexus
to a client who desires a Chevy
Truck. Take a
look at your past sales and identify those products which are
selling the best. From
there you can create a price structure which maximizes your
profitability in those products.
A profitable pricing
structure is essential and fundamental to keeping your
business viable. Analyzing
your price list to identify your costs and expenses is the
quickest way to find your profit.
Many times the lack of profitability does not mean your
prices are too low. Generally
the structure of your pricing can be adjusted to improve
profits.
Be wary of “industry
standards”. These
numbers are generally skewed by the method the data is
collected. If this
data is submitted on a voluntary basis, it very well does not
reflect a true cross section of the industry.
Due to a wide range of variables pricing and
profitability generally cannot be established for an entire
industry. While
these benchmarks can be interesting they should not be used to
measure an individual business’ sales, pricing or
profitability.
To create profitable
pricing, all of the areas discussed above should be taken into
account. Your
pricing structure should be a reflection of these factors
which will assure your financial success.
*****
Inspirational
corner
But seek first his
kingdom and his righteousness, and all these things will be
given to you as well. Therefore
do not worry about tomorrow, for tomorrow will worry about
itself. Each day has enough trouble of its own.
Matthew
6: 33-34
It
is easy to become concerned about your future.
Let’s face it, times are tough.
A weak economy, rising fuel and food prices, global
warming, an unpopular war and so much more gives us plenty to
worry about. We
are reminded in Matthew to concern ourselves with focusing on
God and trusting in him to take care of our needs.
When we give our troubles to God we are free to worship
and glorify him in our everyday lives.
Are you putting the Kingdom first?
*****
Web
Blog and Facebook
You are invited to
checkout our web
blog. It is
here you will find articles from back issues of our
newsletters as well as other writings and helpful information.
We have also created a Facebook page.
We are newbies to the whole Facebook experience but
would invite you to join us and share your experiences using
this new marketing opportunity to promote your business.
*****
Marketing Tip of the Month
The
Studio Gold Card
Getting a solid customer base is essential to any
business. Turning
good customers into repeat customers can make the difference
between survival and success.
The Studio Gold Card can help you achieve a steady flow
of repeat customers.
This program is designed to be used primarily with
children. You can,
however, modify it to be used in any of your service lines.
Here is how the program works.
The card is set up for a certain number of prints to be
purchased over a pre-determined period of time.
For example you may want to offer 8 8x10 portraits over
a six year life of the card with a limit of to 1 8x10 per
session. A single
child need not use the card.
Any member of the immediate family can take advantage
of the program.
To determine
what the card would be sold for you would multiply the retail
price of your prints by the number offered on the card.
In our example, we are offering 8 8x10 prints with a
normal value of $40.00 each.
This means that the value of the card at full retail
price would be $320.00 (8 x $40.00).
We then will offer a discounted price for the card when
it is purchased. For
example, we will give them a 50% discount.
That means that they can purchase the card for $160.00.
The customer can
receive additional savings with the card.
As in our example, they will receive each session at
half off of the regular session price.
The will also get 10% off of any additional portrait
purchases that they make from the session.
The will get advance notice of all studio promotions.
You can add
whatever other enticements you would like to your program.
You may want to make your offer totally different.
That is OK.
Here are some other considerations for you.
You will want to limit the number of cards you sell (at
least as far as your clients are concerned).
This will add prestige to the program in your
customer’s eyes.
Only offer the card after you have done the first
session at full price. This
does a couple of things for you.
It allows you to meet and work with the client and
determine if you want to make a long-term commitment to them.
There are some clients that you simply do not want
back. It also
allows them to recognize the value of the card after they have
paid full price for the first session.
There are many options and variations that you can
implement into your own program.
You may want to allow them to use one or two of the
sessions for the whole family.
You will need to determine how to price the card.
If you offer multiple price lists for different types
of portraiture you will need to determine which will be used
for the program. You
may want to exclude other studio specials and senior
photography from the card.
A time period between sessions may also be necessary.
Limit the card to immediate family members only.
In the business environment where we live, the consumer
continues to demand more services and better value.
Once you’ve shown them that you offer those things
it’s important to keep them.
This program allows you to do just that.
Summer Specials
2nd
Annual $25,000 Summer Giveaway!
Get your share of our $25,000 Giveaway.
Simply
sign a coaching or retainer contract and receive a $500
credit, refer a friend and when they sign a contract you
receive an additional $500 credit.
Your referral will also receive a $500 credit on their
contract.
BONUS!
Refer
five clients and we will also give you free registration to
our Business Brainery
Market Planning Workshop or $1000 cash.
Hurry once the $25,000 is gone it is gone.
To
get started you can call us at 309-962-8143 or fill out the questionnaire
on our website. Be
sure to mention "$25,000 Summer Giveaway".
Promotion ends September 1, 2008. May
not be combined with other offers, some restrictions apply.
