As business owners struggle with today’s economic reality that many customers can’t or won’t pay as much for products and services, some are finding creative ways to keep customers loyal and get them spending again. Letting customers know that you’re willing to offer them more value or a bargain since they’re experiencing tough times builds trust between you and those customers, says April C. Seals, owner of Scentsational Greetings, a greeting card company in Monrovia, California. “It’s important to foster those relationships so later on down the road when everyone is doing well they will remember how well you treated them during that tough time,â€ says Seals. Here’s how business owners can adjust their business models to the economic slowdown to keep customers happy and make money in the process.
Adjust spending creatively. Don’t be so quick to lower prices across the board, but be willing to give customers a break. “If you lower all prices, [low prices] are what customers are going to start to know you for,â€ says Beverly Alexander, 38, president of Today’s Divas Handbags in Upper Marlboro, Md. Instead, offer discounts to long-time customers or create specials tied to events or holidays, she says. “Five dollars to you is not a big deal but $5 off for a loyal customer makes them happy.â€
Package services together. An alternative to cutting prices is getting customers to pay more by bundling products and services, effectively increasing value. Damon Gadson, owner of Empire Auto Detailers, a mobile car detailing service in the Washington, DC metropolitan area, has successfully convinced customers to pay more even in this tough economy by giving them a bargain on a package of services. “We’ve added headlight restoration to our services,â€ says Gadson, 33. “We charge customers $50 for it if they’re getting a detailing service; it’s $85 if they don’t get a detailing service so they look at that as value.â€
Educate the customer. With people thinking twice about purchases during the recession, business owners have to do more to educate consumers about why they need a particular product or service. When fewer people starting coming into Omega Optical, a luxury eyewear company in Philadelphia, co-owners Steve M. Davis and Rebecca Cooper Jackson knew they had to get the customers that were still coming in to spend more. “We knew customers were still spending but only on things they felt they needed,â€ says Davis, 39. So in the last year, the company has invested in training for the sales staff so they would know more about the products and be able to educate consumers about why they should buy them. Since then, “the number of people making purchases didn’t go up but the amount of dollars they spent did,â€ Davis says.
Consider creative invoicing. Some clients or customers may want to spend with your company, but they may not be able to pay the entire price upfront or according to the payment schedule you’ve always used. Since the economy tightened up, Scentsational Greetings’ Seals kept some vendors from cutting back on purchases of her cards by offering them longer payment periods and giving them leeway when payments were late. “I understand so I don’t go and put them in collections,â€ the 29-year-old says. “I work with them. Customer service is key.â€
Be willing to negotiate. Sometimes when times are tough, a bird in the hand beats two in the bush. If a customer is only willing to pay less than your ideal price, consider whether another customer is likely to come in any time soon, says Leland Nelson, president of Dirty Dog Hauling, a Harrisburg, Pennsylvania-based company that removes trash. “When my guys go to a job site, they don’t want to leave without money,â€ Nelson says. “A job might have been $400, but we walked away with $290 because the guy just couldn’t afford that. Right now a fast nickel will beat a slow dime.â€