3 Simple Ways to Improve Your Pricing Power

By Daniel Kehrer

Free is a powerful force in the marketplace — especially online. A fast-growing, Internet-inflamed “culture of free” is leaving more local businesses feeling profit pain where it hurts: in their bottom line. Business owners must now answer a pricing question that once seemed odd: What can you do when your products or services are more popular than ever, but consumers don’t want to pay for them anymore?

Perhaps surprisingly, there are some answers. Saul Berman, author of “Not for Free: Revenue Strategies for a New World,” pinpoints five areas causing the shift:

• High customer expectations for personalization, control, relevance and timeliness
• Low cost, saturation-level communications
• Bountiful, low-cost bandwidth
• Plentiful, real-time data processing power
• Rapid-fire technology and competitive innovation

These trends and expectations affect even small local businesses. Customers now instantly communicate local buying experiences; they expect restaurants, dry cleaners, health clubs and others to offer personalized, relevant offers and experiences. And they have unprecedented access to price comparison and other competitive information.

Businesses are being forced to squeeze out revenue in new ways as markets and expectations shift. But the changing landscape also creates new opportunities to grow revenues “organically” without expensive advertising or marketing programs. All you need to do is change your approach. The key is this: It’s not about creating new products or buying new technology. It’s about understanding customers and delivering value.

Start at the beginning – with your customers. But be careful. Most business owners still view customers through an outdated mass segmentation lens based on age, income, gender or geography. That view is dead, done in by technology. In its places there’s a new type of segmentation based on how buyers actually behave – how they use your products, services and information. This sets the table for building revenue in new ways:

1) Pricing Innovation

It’s not just “how much” but also “when.” No product is free – ever – notes Berman. Someone always pays for it. So the answer is not to price your product at zero, but to innovate around the amount of money charged and the point (or points) when you require customers to pay. Successful approaches include: subscription plans, variable pricing, by-parts pricing, bundling and rental models.

Rent The Runway, launched in late 2009 by two business school students, is a great example of pricing innovation. The founders took a traditional “buy-only” product (designer dresses) and reinvented it via subscription and “rental model” pricing. Rent The Runway is a membership site that rents designer dresses for less than 10% of what it would cost to buy one. Women can outfit themselves in a different designer fashion for every event they attend for less than what they would have paid to buy a single dress.

2) Payer Innovation

Sometimes the customer who pays is not the consumer of the product. Since nothing is free — and somebody always pays — the trick is to think of alternative “somebodys” who might pick up the tab, or part of it. A classic example is TV shows. They’re free to you – the advertisers pay. Sponsorships and white-labeling are two other examples. “White labeling allows product companies to sell outside of their traditional market without having to drum up demand themselves.”

3) “Package” Innovation

Don’t take “package” too literally. It’s not about the wrapper; it’s about all the benefits and features of a given product or service. Today’s most innovative companies are expanding revenue opportunities by changing the form an existing product takes. There are three basic ways to think about it:

• Breaking the product down into components
• Integrating different pieces of the value proposition
• Extending value in new ways

Understanding the underlying elements of pricing, payer and packaging can help you rethink and reformulate your revenue strategies. One you do, you’ll find new ways to keep customers paying today — and in the future.

Spotlight On Success - Terri Miller speaks with Sherry Schaefer of 3 Point Ink.

Terri Miller traveled to Nokomis, IL to speak with Sherry Schaefer, owner & editor of 3 Point Ink, the publisher of Oliver Heritage & Heritage Iron magazines. They have experienced phenomenal growth in the last few years & are a great example of how to use the internet to achieve success. We have been working with Sherry for over five years and we wanted to share her story & tips for success with all of our clients.

Click HERE to watch the interview on YouTube.

Walking The Fine Line of Follow Up - When it comes to contacting your clients, how much is too much?

by Grace Mor

Are you following up too much? Or, not enough? It’s a constant dilemma for sales, especially someone running a small business. There’s always a fear that perhaps, you’ve crossed the fine line of being persistent, over to the side of being obnoxious. Following up is important but it must be tempered to have the right balance. Without follow-up, you are missing HUGE opportunities. It is one of the best things a small business can do to keep itself exposed to the customer.

Remember, it’s competitive out there and people are busy. You and your business will not always be on the forefront of your customer’s mind. It’s your job to make sure you remind them you are there! Here are some suggestions:

Click HERE to read the Five Tips.

Can find that important email? A client didn't receive that important email you sent? Maybe it went into the Internet Black Hole - LITERALLY!

Red alert! Are We Sinking Into An Internet Black Hole?

It seems like a full-fledged red alert when I can't connect to the Internet. Some experts may have figured out the why and the how to fix these outages, but will the cure making hacking harder or easier for cyber-criminals?

Have you ever had one of those days when you reboot the router but you still can't access anything on the Internet? Those unexplained outages might be caused by Internet "black holes"-places where data can't get in or out. Some scientists estimate as many as 2 million temporary black holes come and go every day. One reason for these black holes are the routing difficulties caused by more than a billion Internet users at a time. As more people and devices connect to the Net, stressing routers and their ability to pass data packets, some scientists worry that the Net might permanently collapse into a black hole.

Read the FULL ARTICLE HERE.

Scam Alert – Beware of Phishing Scams

Phishing scams involve internet fraudsters who send spam or pop up messages to lure personal information (debit card or credit card numbers, bank account information, Social Security numbers, passwords, or other sensitive information) from unsuspecting victims. Phishers send an email or pop up message that appears to be from a business or organization that you may deal with such as your bank, the IRS, PayPal, or your Internet Service Provider. The email message is very tricky and can make you think that something is wrong with one of your own accounts. Here are a few examples:

"We suspect an unauthorized transaction on your account. To ensure that your account is not compromised, please click the link below and confirm your identity."

"During our regular verification of accounts, we couldn't verify your information. Please click here to update and verify your information."

The message may ask you to "update," "validate," or "confirm" your account information. Some phishing emails threaten a dire consequence if you don't respond. The messages direct you to a website that looks just like a legitimate organization's site. But it isn't. It's a bogus site whose sole purpose is to trick you into divulging your personal information so the operators can steal your identity and run up bills or commit crimes in your name.

Important tips for protecting yourself from phishing scams:

• If you get an email or pop-up message that asks for personal or financial information, do not reply or click on the link in the message.
• We suggest you call the company directly to confirm the legitimacy of the email.
• Use anti-virus and anti-spyware software, as well as a firewall, and update them all regularly.
• Don't email personal or financial information.
• Be cautious about opening any attachment or downloading any files from emails you receive, regardless of who sent them.