Tuesday, March 20, 2012

New Local Daily Deals for Small Business

By now everyone has heard of, and probably used,  Groupon, Living Social, or one of the many sites like them.  These sites all work along the same premise, they just go about it slightly differently. They offer customers the chance to purchase one significant deal each day.  This allows the business to attract a large number of new customers and, hopefully, earn their continued business. 

Daily deals have worked well for many businesses, but problems have been seen as well.  For instance, many small business owners find it difficult to offer the large discounts that is required to utilize these coupon services. Also, with the huge quantity of deals being offered, many business owners believe customers go where the next coupon sends them rather than convert to a repeat customer.  Again, this is especially difficult for a small business.

A new coupon based marketing company thinks it has the answer for small business.  Constant Contact, a company used by approximately half a million small businesses to manage and create email marketing campaigns, has recently launched SaveLocal.  Rather than model the marketing campaign on large scale consumer lists, Save Local targets your existing customers and offers incentives to share coupons with their social networks. In addition, the merchant controls the amount of discount offered to ensure they do not lose money and Save Local only charges $1 to $3 per coupon.

So what's in this for your existing customers? That is up to the merchant.  Some examples are an extra discount on the coupon, a percent off a future visit, or even a free item.  The biggest plus is that the customer gets the incentive just for sharing!  Your existing customer is thanked, by earning the incentive, simply for sharing the coupon whether or not any of their friends make a purchase.

Targeting your existing customers social networks increases the chance that the person seeing your coupon is local to your business and therefore more likely to use it.  SaveLocal states that approximately 1/5 of the people responding to the deals are new customers for the merchant.  Being local customers, they are more likely to be become repeat customers.


National Business Capital is always on the lookout for services which may benefit our customers. SaveLocal may be a good marketing option for small businesses to reach local customers.   Take a look if you think daily deal marketing might work for you.

Friday, March 9, 2012

How to Successfully Price Business Services

Deciding to open your own business is a risky, yet exciting, venture.  One of the most important factors to consider is how to price your services so that you can make a profit.  Customers come to National Business Capital for help achieving their business financial success, whether through funding or merchant services, so we would like to offer the following tips on setting price points.

Many business owners feel they should undercut their competition when first starting out. Discounts may be given to family members, friends, neighbors, or anyone to bring in business.  This may seem like a good way to start, but there are a few problems it can create. First, can the business sustain itself on this reduced pricing? The business may be busy with work, possibly even overloaded, but still be unable to cover costs.  Second, pricing affects the perceived value of your services.  Set your price too low and potential customers may question the quality of your work or the need for the particular service you provide.

Raising the price of services often causes concern for business owners as they feel customers may be upset or not feel the need to continue the service at the higher price point.  Confidence is key here.  The business was created because there is a demand for the services provided and the business produces quality work.  Communicate with your customers to be sure they have a full understanding of the full value your business provides.  Highlight the areas where you go above and beyond your competitors. Higher prices means the business can sustain itself on fewer customers or with added employees.  Either way, staff will have more time to spend with each client therefore providing greater service.  The higher price point may also help attract the right customers, meaning the customers who understand the value of your business and the value of paying for quality products.

Take a look at the cost to you for providing the service and then determine a fair profit margin.  Customers understand that a profit needs to be made and will not begrudge a fair one, but may walk away from a business with a reputation for overcharging.

Research the industry.  Find out what competitors are charging. Review annual statement studies on small and mid-sized business financial benchmarks and be sure your profit margin is in the ballpark. Overall, have confidence in yourself and your business and the value you place on it.