Tag Archives: profit

Aardvark Marketing Consultants Ltd | Increase average sale

Could simpler pricing grow revenue and profit?

Could simpler pricing grow revenue and profit?

How many business owners haven’t worried about the pricing of their goods and services?  Not many, I think.  We all know it’s a critical factor but are probably frightened of the consequences of getting it wrong. As a result of this fearfulness, we often play ‘safe’, whatever we think that is.

It’s a subject that has been endlessly debated, tested and analysed and there is a wealth of theory available.  In this blog, I’m going to take a look at four different approaches and how they can be combined to simplify prices and at the same time increase average sales value.

Aardvark Marketing Consultants Ltd | The power of three in stories

 

 

 

 

 

 

Power of Three

The human brain appears to naturally break up complex concepts into three parts.  This is reinforced in our experience of the world from childhood where we encounter numerous examples of ‘threes’.  Fairy story examples include Goldilocks and the Three Bears, Three Little Pigs and the Three Billy Goats Gruff. In Sport we often award Gold, Silver and Bronze medals. Religions such as Christianity, Judaism and Buddhism. Three Primary colours, Neapolitan ice cream; Three quotes in purchasing, the list goes on.

Threes work by simplifying choices; most of us like to have some choice, but too much can be confusing.  Other pricing research suggests that when potential customers are unsure or confused, they are more likely to default to the lowest price option, or not purchase at all.  Restaurant menus are often grouped into Starters, Mains and Deserts; Supermarket food ranges offer ‘good’, ‘better’ and ‘best’.

Aardvark Marketing Consultants | price discounting

 

 

 

2. Price Anchoring

Price Anchoring is the practice of establishing a price point which customers can refer to when making decisions.  Effectively, it seeks to fix in customers’ minds a “normal” price against which customers can judge the relative value of other options, savings, discounts, promotions etc.

For example, in a retail environment (real or virtual), when discounts or sale prices are offered, the ‘original’ price is always shown.  We subconsciously then accept this is the normal, fair price and focus our attention on the saving rather than the absolute value to us of the item at the discounted cost.

It works for two main reasons.  Firstly, outside of pure commodity markets (and even in some of them), people use comparisons or benchmarks to assess the value of products.  Secondly, our collective learned behaviour is to find the best reward for the least money or effort.  Price anchoring with a high-priced item or original price, makes the medium-priced product, or reduced price seem much better value.

Price anchoring can also work ‘upwards’, although this is less commonly used.  If a relatively small additional spend brings apparently many more benefits, the higher priced item looks relatively good value.

Aardvark Marketing Consultants Ltd | Pricing for profit

 

 

 

 

 

3. Bandwagoning

Sometimes, even when both of these techniques are applied, it is still hard for the customer to choose.  Perhaps they like more than one option, or don’t feel sufficiently expert.  Whatever, the reason, the potential customer is not sure which product or service would be ‘best’ for them at that moment.  Again, this can lead to the potential customer deciding not to buy for fear of making the ‘wrong’ choice.

Labelling an option as “most popular”, “best value” or “Chef’s recommendation” reduces anxiety and perceived risk.  It makes us feel like we’re doing something lots of other people have done before or is advised by someone who knows more about it than us.  It’s the same reason people look at star ratings and reviews on Google, Amazon or Trip Advisor.  We may not know any of the reviewers, but if there are enough of them or their comments address a particular concern we have, or demonstrate similar values to us, we feel reassured.

4. Avoidance of extremes

A further fine tuning and combination of these theories is to allow customers to avoid extremes.  Most people like to avoid standing out from the crowd (especially if they don’t feel like they are an expert) and so will naturally favour more ‘middle of the road’ options.  Coffee shops sell mainly ‘medium’ (or whatever they call them) sized drinks, many people choose the middle-priced quote.

Aardvark Marketing Consultants Ltd | Increase average sale

 

 

 

 

 

Bringing it all together

All of these ideas can be combined in price communication:

  • Promote only three options with different price points. High medium and low, but close enough in price and features for the customer to easily make a comparison – “what more / less do I get for the extra / saving?”
  • Don’t expect to sell a lot of the high-priced or low-priced option, so be confident that the middle option delivers the turnover and profitability required
  • Add a ‘bandwagon’ label for all three that makes them feel good about their choice
  • Make the middle option stand out – bigger, a different colour, font, put a border round it, so the customer’s eye is drawn back to it as well as their rational brain

You can read more Aardvark Marketing tips for setting a pricing strategy here .

To discuss pricing or communication or any other marketing issue affecting your business, please call us on 0121 222 5743, send us an email or explore the rest of our website.

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Clear communication prevents confusion…

Clear communication prevents confusion…

Communication is so important. In life as well as in business. It is vital to make sure that you, the seller, and the buyer, both understand what you are providing, and what the buyer wants. It is not too late to ask for clarification. It is better to be absolutely sure that what you are selling is what your buyer wants, than to end up in a confused situation where the buyer feels that they have been mis-sold something.

Avoid jargon – make sure you have accurately described what you are selling. It is all too easy to get carried away in the actual selling process and promising more than you can deliver. In general, people don’t mind if you, or your product or service can’t do something, as long as they know. What people dislike, and what will cause them to inundate the internet with bad reviews is feeling that they were mis-sold something.

Make sure your buyer understands what they are getting. Often you will have explained your product or service honestly and clearly, but the buyer may have misunderstood, or misinterpreted. It is worth taking a little more time to thoroughly check that the buyer understands rather than face the later backlash if the buyer was confused.

Many arguments or confrontations are simply caused by lack of understanding or lack of clarity. Make sure your communication is clear. Where possible have a phone call or face-to-face meeting and then follow up with an email confirming the points that you have discussed.

If you are struggling with providing your sales teams with good quality leads, why not invest in some first class marketing? Contact Aardvark Marketing Consultants today on 0121 222 5743 to review your marketing.

To learn more about successful selling, take a look at the video below.

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One step at a time…

One step at a time…

All industries have different problems facing them, and understanding this is key to successful marketing. How you market your engineering company will be different to how you market your creative business. However the tools and techniques that we use will all have a common basis.

In the Midlands there are many engineering firms, and often you will find SME supplying big businesses such as Jaguar LandRover. As the items required by the big firm are often very technical it can be necessary to spend quite some time working with the big business to show them what you are offering, For example you may have to start with a technical drawing followed by a prototype. Sometimes the company will then want to test the item for a prolonged period of time. All of which is fine if you are going to get the contract, but is not so good for your cash flow.

Small businesses often struggle with cash flow, especially in their infancy. Viable, good, profitable businesses are bought down more often by cash flow problems than anything else. Ensuring that your cash flow is resilient enough to withstand such an extended negotiating period is vital to the health and well-being of your company.

You may find that you have to work your way up to be able to put yourself in this position. Taking smaller steps over a few years towards your final goal may be more sensible than trying to launch yourself straight up to your desired end point. Steadily working up through the industry, and ensuring that you have good cash reserves before marketing yourself to the larger companies can be prudent.

Your marketing will need to adapt through the different steps that you take. Marketing yourself to the customers that you need to acquire now, as supposed to the customers you would like to have in three years time is important. With our marketing services we can develop a plan to help you to progress through your industry. Making sure that your marketing is targeting the correct people, in the right way.

If you would like to learn more about successful selling watch the video below.

If you are struggling to create an effective marketing message, why not contact us at Aardvark Marketing Consultants today? We have experience across a wide range of different businesses and industries. Call us now to arrange your face to face meeting on 0121 222 5743

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Beware of over-reliance…

Beware of over-reliance…

Are you over-reliant on one person? Is there that member of your team, that you think, “if anything ever happens to them…” Are you aware of this?

When you map out your sales funnel, you will be able to spot areas of weakness. One area of weakness is over-reliance on people. This is not to say that you don’t need good people: you do. But having a good process means if that person goes on holiday, gets hit by a bus, then another good person can see where in sales funnel the prospects were, and pick up the process.

If the process is not mapped out, and remains largely in people’s heads, then that knowledge leaves with them. The process of laying out a system, means that you are transferring the knowledge from a person, to a system. Ultimately your business then has control of that system, rather than being reliant on the actions of a person.

If you are struggling with process mapping your sales funnel, why not contact us? We have worked with hundreds of different businesses of different sizes, and across a range of different industries. We can help you to improve your business, driving sales and profit forwards. To arrange your meeting contact us now on 0121 222 5743

If you would like to learn more about successful selling, why not watch the video below?

 

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Are you taking too much time?

Are you taking too much time?

How long does your sales funnel take? From an initial enquiry, for example filling out a form on your website, to your meeting with your prospect. One of the important reasons for tracking and monitoring our sales process is that we understand how long each step takes.

If it takes too long to move your suspects through the sales funnel, you risk the suspects becoming disengaged. By studying your sales funnel you can learn where the problem areas are. Is the process too complicated? Are you solving your suspects problems and answering their questions? If they come to the initial meeting with too many questions, they will be harder to convert. If your sales funnel has provided them with answers along the way, then by the time you have the meeting, they will be better engaged.

Reviewing your sales funnel step-by-step, including the time that it takes to move between each stage, gives you the ability to make changes at each step. Small improvements at each stage can lead to a big improvement overall, resulting in a quicker and more efficient sales funnel that will convert at a quicker and higher rate.

Process mapping is vital to ensure that you fully understand your processes, and only then can you successfully change them.

If you are struggling with your sales funnels and would like to improve them, why not contact us? We can help you to improve your sales funnels, ultimately improving your sales, and profitability. Call us today on 0121 222 5743 or via our contact page.

To learn more about sales funnels and successful selling, please watch our video below.

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Understand your sales funnel

Understand your sales funnel

Understanding your sales funnel is important, so that you can track your conversions and change the outcome. You need to be able to see how your prospects move through your funnel and how the process works, to be able to improve it.

For example you may have an online form to fill in to download a white paper. Out of the people who fill in this form, you may manage to contact five of them on the phone. Out of these five you may get a few to the meeting stage and then one turn into a customer. It is important that you understand this process.

By spending some time working on your process, you may manage to get hold of more people on the phone, and change your five to ten, which in turn may result in two clients, rather than one. By spending time on each of the steps in your sales funnel you have the ability to alter your success rate.

If you would like to learn more about how improving your sales funnel can help to improve your growth and profit, contact Aardvark Marketing today to arrange a meeting, on 0121 222 5743

Or click below to watch the video to learn more about successful selling

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How connections lead to customers

How connections lead to customers

When we talk to potential customers, it is all too easy to fix on rational reasons why they might like to work with us. We can write a new website for them, we can improve their IT system, we can improve their operating process. However in order to optimise our chances of success it is important that we delve deeper into their problem.

We need to find out how the problem affects them personally. For example their website may not be very good. This in turns means it is not producing enough leads, which may be worrying the owner as he is considering selling his business and wants to make it more attractive to buyers. So though the conversation may have started at “I don’t like my website” it has travelled to “I want to sell my business.” If your proposition can solve the owner’s pain problem of helping him to sell his business you are more likely to convert him into a client. If you only address the initial concern over the website, he may choose another person to do business with.

Remember that although we think people make rational decisions, usually they make emotional decision and then add in the rationale afterwards. So connecting on an emotional level with your prospects will help you to convert them into customers. It is important to understand what you will bring to this relationship, and it may be worth speaking to your existing customers so that you understand the reasons that your customers enjoy working with you. These will usually be softer reasons, such as they enjoy the structure of a regular monthly meeting.

If you are struggling with converting your leads into sales and would like to talk to someone who can help, call Aardvark Marketing Consultants today on 0121 2225743

Take a look at the video below for more advice on successful selling.

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Successful selling – part 1

Successful selling – part 1

Successful selling needs good marketing, and part of good marketing is ensuring that the right message is delivered to the right people. These people are your ideal customers, and tracking them down will help you to secure those sales.

You will have a picture of what your ideal customer looks like. There are markers which we look for in our on profile customers, these may be traits such as location or turnover. However there are a number of soft traits which may be as important as the more obvious ones.

An ideal customer not only represents the business that you may do with them, but also opens up the possibility of referrals, so time spent on targeting your on profile customers, may reap continuing benefits.

Do you get on with your customer? This may seem like something that you needn’t consider, but having a good working relationship with your customers is one of the important soft traits we consider when building an on profile customer picture. At Aardvark Marketing we understand the importance of a good working relationship, based on mutual respect. We need to be confident that our clients understand their industry, just as we need them to respect our knowledge.

Terms of payment are another area which could be included in your on profile customer picture. If the terms of payment offered are too long, it could lead to cash flow problems, and it may have been better for you, simply not to have taken on that customer.

If you are struggling to identify your ideal customers and would like some more advice, contact us today to arrange a face-to-face meeting. Call us on 0121 222 5743

Or to learn more about the art of successful selling, click below to watch our video on the subject.

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