What are you doing to respond to the current state of affairs?
Respond is different than react.
The world has changed, and I think we can now all agree that your buyer’s behavior has changed as well. So, the question is…” How will your business change?”
I can’t tell you how many people tell me they are dressing appropriately only from the waist up for Zoom calls. That is changing the clothing that people buy, and many people have shifted their purchases online.
People are not driving as much. What impact will that have on the regularly scheduled service that many shops rely on?
I think everyone is aware that restaurants are going to have to shift their model. Sit down dinners and real estate prices are going to eat away at margins. And this shift was coming before COVID. I remember a talk by the CEO of Red Robin, at Denver University, last year. She was talking about how they were exploring ways to ease the tension between declining dine in meals and rising delivery meals.
NOW is the time for innovation. That does not mean you need a big innovation lab or large investments. It means, put yourself in your customers shoes and ask, “How can I help them meet their wants in this difficult time?” (Wants are different than needs).
So, what does innovation look like?
- For my dentist, it is extended hours so they can meet the regulations required for social distancing.
- For a private dining club, early in the pandemic when everything was closed, it was offering their customers pick up of food and paper products like toilet paper and cleansers. (Their distribution channels were different than Kroger’s).
- For an auto mechanic, it was picking up, repairing, sanitizing and delivery of vehicles.
- For many local restaurant’s, communities helped them by blocking off streets. This allowed them to extend outdoor dining and volume.
What will you do?
- Do you want to add an e-commerce site now that your customers are not visiting your store like they did?
- Do you want to communicate how you have sanitized your restaurant, so people feel safe eating there?
- Do you need to go back to your marketing and make sure it is addressing your client’s NEW wants and desires? (They have changed.)
- Keep Marketing and Selling. Companies that pulled back in difficult times lost market share in every downturn.
- Be prepared but don’t panic. This too shall pass, just like the Y2K panic, the SARs Panic, and, The Bird Flu panic.
Get with your advisors and start exploring your options. You want a second opinion. If you don’t have an advisor, you can ask me a question at email@example.com. Don’t sit still and wait for this to pass. The market is evolving, you want to evolve with it.
Stop Discounting and Start Creating Value for More Profits
Product bundling is a great strategy to use when you want to create additional value for your business. Product bundling is simply the process of grouping together certain products to create ‘packages’ which you then sell to your clients. If you’re in a service-based industry then “discount books” do the exact same thing. At the heart of all value-added propositions lies the need to help make your clients’ decision-making process easier.
Many people are very indecisive by nature and will often prefer not to make a decision at all rather than make the wrong one. Product bundling can help people make easier decisions. Consider these examples of product bundling to stimulate your own thought processes.
A dentist could offer 30% off a teeth-whitening program after each visit by a patient. A person is more motivated to buy this product having just gone through the physical and financial pain to have their teeth look great, and naturally they’ll want to keep them looking that way?
A landscape gardener could offer a do-it-yourself garden maintenance kit after each job… including gloves, a spade, a rake, a broom, clippers, a compost bin and so on. This enables the client of the new garden to keep it in the same pristine condition. When added to the cost of the new garden, this bundled offer can be positioned to sound like an excellent investment.
What about a photographer? They could bundle enlargements, a photo album and a DVD of all the session photos taken. Customers are thrilled to receive this complete service and it gives them a permanent record on DVD for future generations.
A locksmith could provide an alarm system, roller shutters, a fire protection system, a car alarm, a personal attack alarm, exterior alarm warning signs and stickers and possibly an ozone detection system where appropriate. People often need a locksmith due to a break-in or fear of one, so why not offer them a ‘complete home-protection package’. Some people will definitely say yes.
By the way, most locksmiths aren’t qualified to install some of these types of high-tech systems. No problem… just joint venture with businesses that are qualified and work out a referral fee for driving qualified clients to them in droves. The locksmith can go ahead and sell the service as well as collect the revenue… then pay their JV provider the reduced fee.
Consider a home builder or remodeling contractor. If they build or remodel multiple homes every year (some builders construct more than 50 homes annually), they typically contract with suppliers and receive huge volume discounts. This is especially true for electronics.
Consider a builder or remodeler who agrees to buy multiple packages of a whole home entertainment and security system including a 42 inch HDTV, a complete high quality surround sound system, a complete home security system including surveillance cameras at all entry points to the home as well as a complete fire protection and monitoring system.
The retail price of this package would easily exceed $25,000 but the builder or remodeler could acquire them in volume for around $6500 since installation would not be part of their costs. Since the builder or remodeler will already have the home stripped to the studs, installation can be handled by their crew for pennies on the dollar.
Now imagine a builder competing with other builders in a moderately priced neighborhood. All the builders offer homes in the $250,000 price range. Our builder offers their home for $256,500 (includes the additional $6500 out of pocket expense to the builder) and it comes standard with a $25,000 home entertainment and full security system for FREE! Which builder would you buy from?
In fact, what if this builder offered that new home for $260,000? Do you really believe that additional $3500 would prevent anyone from buying this home? I seriously doubt it. And if it did, the builder always has the option of reducing the price. They could even maintain their original price of $250,000 and lower their profit margin on each home they sell. This would allow them to possibly double their normal sales volume and practically doubling their overall new profit every year.
The remodeler could use this same type of positioning for every remodeling job they bid on.
What kind of value Bundle can you Create? If you would like help looking to add value versus the discounting madness, let’s chat.