July 14th, 2011 
Maria Helm 
If you are contemplating on price cutting hoping to increase sales, don’t! Before you resort to lowering your prices consider these first:
1. Focus on value. Why do your customers do business with you? Do they come to you for discount prices, personalized customer service, cutting-edge offerings, products they can’t find elsewhere, convenience, innovative thinking or what? If lower prices are not your value proposition, then move on.
2. Bundle some of your offerings (this works best for service entrepreneurs) and offer tiered packages priced accordingly. Those who purchase the platinum package get more choices or benefits than those buyers who opt for the gold or silver packages. Or you could simply offer customers a discount in exchange for a long-term contractual commitment. You also might consider adding a new line or service offering-one that you can charge a little less for.
3. Look for other areas in your business where you can shore up your financial situation. Are you current on collecting your receivables? Is your phone plan the best? Are you using energy-efficient lighting and equipment? Can you cut back on travel and entertainment? Negotiate a better deal on rent? Hire interns, part-timers or partner with a virtual assistant?
Price cuts may negatively affect your cash flow. Remember that you want to make sure you have enough cash to maintain (or maybe even increase) your marketing budget. Smart entrepreneurs take advantage of recessions and try to do more than survive. If you hold tight to your pricing strategy and do more to increase your customers’ experiences, you can actually thrive.
Photo Credit: Craig Murphy
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