While many business owners may think they need to offer rock-bottom prices to attract and retain customers in a challenging economy, cutting prices actually devalues a business’ products and services, says Lloyd Duggan, president of gL Market Research in Middletown, Connecticut. Duggan adds that a better approach for small businesses would be to follow Gray Haile’s lead and convince clients and customers that they’re more relevant than ever.
Here are some ways to do that.
Help customers save money—elsewhere. During a recession, everyone wants to cut costs. But that doesn’t mean they have to cut what they’re spending with you. “If you’ve got a product or service that can help people cut costs in other areas or that make customers’ lives more efficient, then that’s what you want to promote,” Duggan advises.
Take advantage of being the little guy. “The small business always has in its favor its greater agility compared with larger companies,” says Shirley A. Walker, executive director of the Small Business Alliance of Central Florida, a nonprofit that coaches minority- and women-owned businesses. Customers are more likely to be in direct contact with the small business owner, and that can lead to a more personal relationship, specialized services, or customized attention. Walker says that quality products from a well-managed company that provides superior customer service make customers want to support your business regardless of the economy.
Offer more, not less. With less overhead to worry about, small businesses can often be more flexible with the prices and services they offer; instead of cutting prices. Duggan says customers will appreciate the added value, and business owners don’t run the risk of their customers becoming unwilling to pay more once the economy’s recovered.
This article originally appeared in the June 2010 issue of Black Enterprise magazine.