Why discounting is bad for business

Discounting is a short term fix with long term consequences! While there is some disparity among experts, most say that even in the current marketplace, discounting can cause long term damage to your overall business success. According to www.sm.com.au, discounting is a costly strategy for retailers.

While the book called, You Can Compete, suggests that discounting will double retail sales, most data points towards a business disaster. There are several successful alternatives to discounting that are available for your business.

Retailers who have been indulging in discounting by dropping prices and holding pre-sales before major holidays risk losing customers over the long term. Discounting can cause a business’ customers to become conditioned to sales or discounts. If a change in the economy of your infrastructure were to require a price increase, you will likely lose a large portion of the client base that you worked so diligently to build.

There are several reasons why a business should avoid using discounting as a technique to increase sales, including:

Volume
Too many companies fail to account for the effects of price on sales volume. While reducing prices could yield additional customer purchases; can the purchases match and exceed the necessary volume levels for profitability when taking into consideration the deep discount?

Impact on Customer Relationships
Dropping and then raising a price back up can create ill will within your customer base. Some companies use this pricing strategy to engage a customer or to make a sale, hoping that this sale will result in a residual long term customer.

Once the loyalty has been established, some companies then participate in price gauging, losing those initial customers to their competition who has a more consistent pricing model. Deep discounting can also tarnish your brand, unless you are looking to be considered over the long term as a deep discount retailer.

Impact on the Industry
Price cuts that are not backed up by the manufacturing company’s production cost reductions can lead to competitive counter attacks, potentially eroding your company’s profits. Competition can also be created among similar retailers unexpectedly, forcing you to take a lower than expected profit per item sold.

Margins are an essential component for a business’ bottom line. To read more about the importance of business margins, click here to read another one of my articles. There are several available strategies to avoid discounting your products for sale. Your business can give away gifts with purchases that have a high perceived value to its customers.

Businesses with outstanding client service are not concerned with discounting. Evaluate your current customer satisfaction levels and your current business practices to determine how you and your business can provide outstanding customer service. In addition to great customer service, a company with outstanding products & services does not have to concern itself with discounting.

Ensure that your business is offering the best products available in its field or industry so that you can demand the appropriate pricing for the product’s value.

While discounting may be implemented and appropriate for some retailers and businesses, the concept should be carefully considered for its effects on your business. The use of alternatives to discounting will be more beneficial for your business growth over the long term.

Consider which strategies will be the most effective for your business and business niche.

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Auto-responder

The concept of the follow up autoresponder revolutionized Internet Marketing. Now, “Auto Message Setup” promises to bring the field an even greater degree of efficiency.

This recent innovation lets experienced marketers painlessly transfer marketing know-how to their entire downlines. A marketer can now provide each of his downline representatives with a follow up autoresponse system that is already packaged with the marketer’s pre-written messages.

The result? Just a few minutes of work on the part of an experienced marketer, and each of his reps is set up with the same tried and true marketing messages.

Case Study: Marketer Matt and the New Breed

For example, take a look at the case of a fictional network marketer named Matt M:

For years, Matt has been successfully marketing All Natural Pharmaceuticals using a follow up autoresponder. In fact, much of his success can be attributed to the set of seven messages e-mailed to all of his potential customers. Matt has carefully crafted those messages over the years, and they’re really great.

Recently, Matt has been trying to pass what he’s learned along to his downline representatives. He explains his marketing principles over the phone, and he knows that several of his reps pass his follow up messages around amongst themselves.

However, Matt finds that his pearls of wisdom rarely survive this ‘telling and retelling’ intact. He knows his reps aren’t getting anywhere near what they could out of his knowledge. He wishes there were a way to harness today’s technology, and put it to use for the greater good of his downline…

Enter Auto Message Setup

Using an Auto Message Setup system, Matt’s downline reps can order their own follow up autoresponse accounts that are already packaged with Matt’s pre-written messages. They can reap the fruits of Matt’s experience with ease.

Each rep will customize Matt’s messages for himself by logging in to his new follow up autoresponder account, and entering his own contact information.

Here is Matt’s original autoresponse message:

Hi LEAD NAME,Thanks for stopping by the All Natural Pharmaceuticals web site today! We hope you come back soon!Best Regards, Matt M.
matt@all-natural-pharma.com 918 Awl St.
Natural, PA 22314

Notice that the message greeting uses a variable, (LEAD NAME). The variable ensures that each of Matt’s leads will receive a message personalized with his or her own name. Notice, also, that Matt’s name and address are at the end of the message.

Case Study: Downline Dan and the New Breed

Dan is one of Matt’s downline representatives. He’s ordered his own follow up autoresponder through Matt. Since Matt is using Auto Message Setup, Dan’s account came pre-packaged with Matt’s marketing messages. Dan personalized those messages to himself by answering a few questions in his Online Control Panel. Now Dan is sending his own personalized version of Matt’s messages to his customers! All of the basic content is Matt’s, but Dan’s contact information is on the letters. Here is the autoresponse that Dan sends to his potential customers:

Hi, LEAD NAMEThanks for stopping by the All Natural Pharmaceuticals web site today! We hope you come back soon!Best Regards, Dan D.
dan@pharma-ceuticals.com 5 Farm Way
Sootuh, TN 88457

Notice that the contact name and address at the end of the e-mail are Dan’s, but that the greeting at the beginning of the message still includes the name of Dan’s lead.

Mission Accomplished

With Matt’s experience in hand, Dan is now marketing more successfully than ever before. And he isn’t the only one – Matt’s entire downline is now using his marketing messages! Matt’s commissions are growing exponentially.

Matt and Dan’s situation is not unique. Any network marketer with an established downline can take advantage of the opportunities available in an auto message setup system. There’s no better way to put more auto in your autoresponder.

Try this excellent auto-responder service – just click here to learn more

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Storefront: Does you store persona say “come in” or “get lost”?

It goes without saying that an effective storefront calls out to potential customers and invites them to look at the merchandise.  No matter how great your items are, if your storefront doesn’t attract passers-by, you will have a hard time encouraging walk-in customers who actually contribute a large part of your sales income.

Have you ever looked at a boring signage that looked completely out of place in front of a store and never gave it a second thought?  That’s how important a good storefront is.  It is not something you put up without careful thought and it is not something that you can just display your name on.

Designing an Effective Storefront

When considering the design of your storefront, you have to take note of the following:

1. Branding – Your logo should be designed in such a way that people will immediately have an idea of what you are about.  For instance, a candy store should naturally have a logo that has a touch of something associated with sweets or sugar or something to this effect.  You get the picture.

2. Window display – Your window display should support your branding.  Let’s go back to the candy store.  Think about children since they are mostly your target market when conceptualising your window display.

3. Concrete theme – Consider the look of your logo/branding and your concept of the window display.  These two should be in sync when put together.  Consider the font of your letters, the logo itself, the colours, and the over-all look of the store.  Everything should work together to convey your marketing message.

4. Materials – These are important too because they contribute a great deal to the coming together of your theme.  No matter what materials and tools you choose, you must be able to successfully incorporate these into your theme.

5. Size – You don’t want something so small it can’t be seen by anyone who’s just a few feet away from the store.  It can be as big and bold as you want for as long as you don’t ruin the look of the store.  In fact, some fun stores will have you walk right through doors or entrances that are part of the theme such as the front part of a car or a pirate’s ship.  These are already calling out to customers.

Get Professional Help

The good news is that you don’t have to go it alone.  Your great ideas can be turned into something more tangible by professional graphic and design artists.  They can help you with the concept as well as design you a powerful logo (taking into account everything you want to incorporate) and then some.

If you don’t know where to look, the internet can help locate some good artists that can design your storefront for you.  Choose those that have portfolios so you’ll have a good idea of how they work and what they’ve done.  The only important thing to remember is that your storefront should attract customers and not shun them away.

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Getting the Most from Your Online Presence

More than 10 years after the popularisation of the internet as a means of mass marketing, entrepreneurs are still finding this frontier a place one could easily get lost in.  Case in point are the millions of entrepreneurs worldwide who are finding out the hard way that having a fantastic looking website doesn’t necessarily ensure visibility and increased sales.

In fact, with the new marketing rules brought about by the internet, more and more entrepreneurs are finding their hard earned marketing dollars going down the drain.  What’s worse, these entrepreneurs are literally throwing the baby out with the bathwater as they revert back to the brick and mortar system that’s ultimately doomed to fail.  If you look closely enough though, you will see more similarities than differences between the real world and the internet when it comes to marketing.

Your Website’s Importance
Of course, a fantastic looking website is still a plus and with some work, most entrepreneurs can still benefit from their bits-and-bytes store in cyberspace.  A website though is the virtual equivalent of your actual store.  Thus, just as foot traffic and major crossroads affect your business, so do links and affiliations affect the performance of your website.  Unlike your actual store, however, you can actually increase or decrease the number of roads leading to your website by maximising the use of the following methods.

Search Engine Optimisation
Search engines are the popular navigation tools online – so you are likely to be visible to online users if you exist in the search engines’ maps of cyberspace.  Your existence in search engines’ maps is a function of several factors; among them are the number of inbound links to your website, the relevance of the keywords in your site and the number of visits your site gets everyday.

Building Links
To build links or e-roads towards your online store, you’ll have to leave a trail of “crumbs” for your customers to follow.  These “crumbs” can be in the form of interesting, informative and relevant articles posted in article directories and blogs; viral and relevant video clips in video blogs; helpful posts in forums and social networking sites; and all other content that includes a link back to your website.  Remember, the more links you have, the more roads lead to your business.

Optimising Keywords
Relevant keywords should also be part of your meta tags and content.  Thus, if you’re in the business of providing corporate giveaways, for example, you must make sure that the content of your site contains many keywords relevant to this business line such as corporate giveaways, corporate souvenir items, corporate gift items, etc.  If you fail to optimise your site for keywords that are relevant to your business, your target customers will not be able to find you through search engine queries.

Building Traffic
Traffic volume is important if you want to rank high in search engine results.  To achieve high traffic, you can pay affiliate marketers who will market your products or services in their websites for a cut of your profits.  Depending upon their influence in the internet, affiliate marketers can drive from hundreds to thousands of potential customers to your site.

The above tactics are pretty basic.  Monitor your website statistics and performance and refine your methods further to attain maximum results.

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The Good, the Bad and the Ugly of Podcasting for Small Businesses

Small businesses have found their perfect marketing method – podcasting – or have they, really?  Podcasting may be the next best thing since sliced bread but it isn’t truly that different from other marketing methods.  Podcasting, just like any marketing method has a good, a bad and an ugly side.

The Good:  Make Your Mark
Podcasting is a great branding tool for small businesses.  Big businesses have huge marketing and branding capital so they can buy TV and radio airtime, full-colour ads in local and national dailies as well as magazines, lease billboard space, and launch a comprehensive internet marketing campaign.  Small businesses have no such capacity, so unless they find an innovative branding method, their target customers will forever remain oblivious to their existence.

Podcasting can give small businesses stature in their customers’ eyes.  By choosing your podcasting content really carefully, you’d be able to build a positive image in your audience’s mind.  Through repeated exposure to your marketing message, moreover, your podcast subscribers become more familiar with your services and products.  And in marketing, familiarity breeds not contempt but trust – at least until you do something to forfeit that trust.

Podcasting also offers you a way to acquire your customers’ loyalty.  By podcasting content that repetitively and consistently assures your customers that you care for them and their needs, you’d acquire a loyal customer base.  Furthermore, podcasting interviews of your key and important personnel – for instance, interviews with you, the business owner – will give your consumers the feeling that they know you personally.  This personal touch is what mainly gives small businesses an edge over bigger and more anonymous corporations and businesses.

The Bad:  Can They Hear You?
Podcasting gives you a pulpit where you can preach and be heard, but it does let users choose whether or not they’d like to hear what you’re saying.  Users have ultimate control over what content they want to receive or if, in fact, they would like to subscribe to your podcasting feeds.  In a nutshell, podcasting lets you reach only those who want to be reached.

Some would say that this is, in fact, an advantage and not a drawback.  After all, if people chose you and your podcast, then it stands to reason that you gain interested and motivated listeners who would be much easier to covert to clients and buyers.  However, the fact remains that if you can’t convince people to subscribe to your podcast, then you simply don’t have an audience – and there’s nothing that your podcasting prowess can do to change that.

The Ugly:  Can You Afford It?
If small businesses want to gain the benefits of podcasting, they would have to invest in professional recording equipment and media editing software.  Such tools cost thousands of dollars which you may not have or are unwilling to spend on podcasting.  Then, you have to pay for hosting services and podcasting technology (you really don’t want a free host).

Some would argue that you don’t need expensive equipment to start podcasting.  They’d be right if we’re talking about personal podcasts; home-made podcasts do have quaint charm.  However, amateur recording just wouldn’t cut it for small businesses.  The truth of it is, if you want to be perceived as a professional outfit, you’d have to be, seem and sound like it.

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