A couple weeks ago, I assisted at a seminar on how to sell more effectively. During the Q&A period a participant asked whether she should blog or email or use Facebook or HELP!

There’s a lot of confusion, worry, and frustration being expressed by business owners I talk with.

Once upon a time all you needed to do was to send an email newsletter to people you wanted to connect to.

Now it seems as though the options are multiplying on a daily basis: there are blogs, wikis, social media sites like Facebook, Twitter, mobile media, etc.

And I hate to say it but as you are reading this there are some smart, geeky types developing the Next Big Thing! In 18 months or so your inbox will be flooded with breathless exclamations of how you absolutely must know all about this wonderful new way to communicate.

But not to worry. In fact I hope after you read this article you will never worry again about the newest, coolest thingy.

OK, at least your stress level will be considerably lessened.

It All Comes Down to Communicating Something Useful to Your Customers and Prospects

One of the attendees at this seminar, Dick Carlson, said something very useful, “the sooner you can become an agnostic when it comes to how you deliver your message, the easier your marketing job becomes.”

What Dick meant was this:

The content you come up with (for example, an article you write) can be adapted to fit just about any of the many communication tools available to you.

You write or script information so that with a little cutting and pasting it will fit nicely into a

• Tweet on Twitter
• An update on Facebook, or LinkedIn or Ning
• A blog post
• An emailed article
• Etc.

Don’t write one article for your blog and a separate article for your email newsletter: write one piece of content and tweak it to fit the way you are delivering.

Begin with the question: “What is most relevant and useful for my customers, prospects, and other audiences” and write or record content that addresses that question.

Example: Adapting a Written Article to Many Different Mediums

I’m a big believer that “a picture tells a thousand words” and have created some graphics to illustrate the process of adapting my article so it fits different mediums I use.

Step 1: the article

In this case, I wrote the article using Microsoft Word. I use Microsoft Word simply because I’ve been using Word since 1987 and I’m used to it.

You can write in any way that’s comfortable for you.

Here’s how’s my article appears in Microsoft Word on my computer:

Step 1: Type article using word processing software

Step 2: Add to Blog

Now that my article is typed up, spell-checked, and so on, it’s ready to copy and past right into my blog. I use WordPress for my blog and creating a blog post is as easy as:

• Select everything including the graphic in Microsoft Word
• Copy the selection
• Create a new blog post in WordPress
• Paste the article into my new WordPress post (your formatted article may show up strangely in WordPress, there are workarounds for this)

Here’s how the article looks when I paste it into a new blog post:

Step 2. Paste article into new blog post

You’ll notice a little tweaking is in order, yes? Specifically, I need to:

1. Add the graphic I used in my Microsoft Word document

2. Cut and paste the headline so it shows up as my blog post title

Takes about five-minutes to make these little changes and ta-dah!

Tweaking article by adding image and title

Now my article is a blog post and ready to publish.

Step 3. Copy and paste article into your ezine

If you’re like me, in addition to having a blog, you have an ezine you send on regularly to people who have subscribed to receive it.

Why have both? Typically subscribers are cool with specific offers in an emailed ezine while you can’t really include an offer on your blog. Expectations are different.

So, once again, I’m going to select everything from my Microsoft Word document and this time I’m going to paste it into the newsletter template I use with aweber:

Step 3. Copy and paste into ezine template

I’ll also need to tweak my ezine article to make sure the date is current as well as write the offer and add a link so people can click through to the website page with offer details and purchase information.

Again, this takes, maybe, 5 minutes.

Step 4. Let folks on your social media sites know your article is up

If you have a presence on social media sites such as Facebook, Linkedin, or Myspace, you want to make sure people who follow you know about your latest (and greatest) article.

Fortunately, there’s very little you need to do to get the word out.

First, log into a social media account. In this example, I’m logged into my Facebook account.

a. Add a link to your Facebook account. Then type the URL for your article’s blog post (note, in this case I also typed a jazzier version of the article’s title – How is an Ezine Subscriber like a Pizza Delivery Van?:

Step 4a. Add a link to your Facebook account

b. When you select Share, a link to your blog post will appear. If you are using graphics, you’ll also have the option to show a thumbnail of a graphic.

Step 4b. blog-post link in Facebook

Step 5. Tweet it

I always announce my articles on Twitter so people following me on Twitter learn about my latest articles. It’s extremely simple to “tweet” your blog posts and articles.

To do this:

a. Log into your Twitter account and type your article title and link to your blog post in your What’s happening? caption. Then select Tweet:

b. Voila! Your article and a link to it is now available for your Twitter community and they can click on the link to read your article and tell their communities about via retweeting.

5b. Your tweet about your article

Congratulations! You’ve Freed Your Article from Email Jail!

To recap what you’ve done, you’ve taken a piece of content, in this case an article with information useful to your customers and community and using a bit of cutting and pasting, you’ve made your article available in four different places:

1. Your blog and to people who regularly read your blog
2. Your e-newsletter and the people who subscribe to it
3. Your social media communities such as Facebook
4. Your Twitter community

Are there other places you could make your article available? Absolutely!

The point is, you only need to write your article  once then with a few minor tweaks it’s easy to distribute to a variety of places and audiences.

There’s been an interesting discussion going on in a class I’m co-facilitating about the best way to reach customers and prospective customers:

Should you post your articles on a blog?

Should you email those articles to people who have subscribed to your list?

Or something else?

The Death of Opt-in Email?

Up until fairly recently, when you wanted to keep in touch with customers and prospects, you used email to send periodic messages to people who opted-in to receive your mailings.

For example, since 2005 I’ve been emailing my Contagious Marketing Ezine on a monthly basis.

Now blogging has become the new darling of online marketing and the word is that “email is history. ” Arguments in favor of Email’s impending death include:

• Email sent to subscribers doesn’t reach the inbox. People are so sick of spam, they’re using aggressive settings to get rid of anything that has the faintest whiff of being an unwanted sales pitch. More often your email is languishing in a Junk Mail folder … or even going straight to the Trash.
• People are reluctant to share any personal information including their email address. You don’t need to share any information when you are visiting a blog to access free articles, services, and so on.
• People don’t have time to read articles. Blog posts are shorter and better fit our tendency to skim information online.
• Blogs and social media applications like Twitter and Facebook allow people to interact. Email is only one way.

The “impending death of email” makes small business owners nervous: should they invest any time or effort into growing an opt-in subscriber list? Or should they bag the idea of a subscriber list and just work on their blogs?

Opt-in Email: Not Dead Yet Baby

Although blogs and social media have opened up some very cool ways of connecting businesses to a communities which include but are not limited to their customers, I believe opt-in email still has a place in your small business’ marketing strategy.

• An opt-in is a higher form of commitment. When we give something, even something very small like our email address and permission for someone to send us stuff on a regular basis, we are making making a small but significant commitment. It is an action that tells the business owner that we are interested in what they are offering.
• Because of the implied commitment, an opt-in allows more latitude for offering products and services you are selling. People are a lot more sensitive about blogs posts and social media that push sales pitches their way.
  Personally, I have no problem reading an offer emailed to me if I opted into the list. But if someone I follow on Twitter, for instance, sends me a direct message asking me to “check out” some program they’re selling, I stop following them.
• Opt-in email allows you to control who gets what and when. Most opt-in email management services like aweber, Constant Contact, MailChimp, etc allow you to create different groups to whom you can customize offers and information.
• Some people just aren’t open to getting information through blogs. I’m horribly embarrassed to admit this publicly but I rarely if ever read my RSS feeds. I use blogs quite a bit, especially when I’m doing research and want to find out what others have to say on a topic but as way to keep in touch with a business, nope. I still prefer getting articles emailed to my inbox.

My Recommendation: a Hybrid Solution

Rather than dumping one or the other, I use and recommend you consider using a “hybrid solution.” Taking advantage of both technologies to so that you can benefit from the advantages of both.

Here’s what I do which, so far, has worked for me and adds minimal work and cost to using one or the other.

1. I write my articles as blog posts directly within my blog.
2. Once my post is finished and edited, I copy and past the post as a message in aweber. Aweber is the service I use to email my articles to everyone subscribing to my Contagious Marketing ezine.
3. I use the application, Ping.fm to send a new post to my Facebook, Linked In and Twitter accounts which announces the new article and provides a link for anyone wanting to read it.

And voila! People who prefer to get my article emailed to their inbox get the article. People who prefer to subscribe to my blog get the article via RSS feed and people who follow me on Twitter or Facebook or LinkedIn get a link to the article post on my blog.

It isn’t a perfect system: I include offers to buy products and services in my email articles. I don’t currently sell much on blog. And I’m still getting a sense of what kinds of offers work using Twitter and Facebook.

But it allows me to reach people who prefer opt-in email and people who prefer subscribing to blog posts and allows me to benefit from including offers as well as encouraging the two-way conversation that blogs facilitate.

Bottom Line

If you’re a small business owner trying to sort through how best to communicate regularly with customers and other communities, I encourage you to use both opt-in email as well as blogging.

Both methods offer unique advantages and you can adapt a system like mine witch allows you to send your messages through both without spending much extra time.

My client, Matt, was making great progress writing his web copy and asked me what I thought about his introductory offer.

Matt helps small business owners get better organized and get more done.

He had a three-step “what to do next” offer:

1. Download an excerpt from a book he published—people who downloaded would also automatically be subscribed to Matt’s free monthly ezine
2. Complete an online assessment about their time management habits
3. Buy his book

I liked the first step and told Matt. But I wasn’t so sure about the other two. I wondered whether clients were getting what they really needed.

Matt was disappointed. People loved his book, he told me. Why wouldn’t that be the a natural next step?

Revisiting the Marketing Funnel

What my client and I were discussing—what to offer and when to make the offers— is often called the “Marketing Funnel.”

The Marketing Funnel is a very useful concept and can be summed up like this:

When people first learn about your business and products, most won’t be ready to make a purchase and if they do buy, they will buy something very inexpensive.

As they learn you deliver what you promise, a percentage of prospects will trust you enough to purchase from you.

And an even smaller percentage of folks who buy will fall in love with your products and services. They will buy your most expensive items and they’ll come back time and time again.

The funnel shape makes sense. At the lip of the funnel you have lots of folks checking you out and trying free products. As the funnel narrows you have fewer and fewer people but those smaller numbers are spending a lot and buying a lot.

The key lesson of the marketing funnel is this:

As a business you want to offer products at different price points so that you can serve customers who are at different levels of commitment in terms of the time and money they’re willing to spend.

I’d Prefer a Walk in the Garden Myself

Useful as the metaphor is, a “funnel” isn’t the friendliest image. As customer it’s not exactly appealing to picture yourself pushed into a funnel.

Nor does the marketing funnel reinforce the notion that our profit is based on effective service. When someone says they’re “trying to upsell customers” they coming from the mindset that we somehow have to push our customers to buy more of something that they otherwise wouldn’t buy.

Which is why I’d prefer to use the concept of a walk in the garden to explain how to think about serving your customers at higher levels.

Designing a Profitable Walk through the Garden

I imagine you’re familiar with gardens and know there’s quite a variety of gardens: big, formal gardens; small, semi-wild gardens; vegetable gardens; flower gardens, and so on.

Since we’re talking about your small business, we’ll assume a small, simple garden. And your business garden has the following features:

• a gate to enter
• a path that takes people through the garden
• a few point of interest analogous a water fountain, or a pond, or an apple tree

I did use the word “profitable” and here’s how you design a profitable walk:

• To enter the garden, people need to do something so they know about your business and solutions. Some examples: they download a free white paper or they sign up for your weekly ezine, or they sign up for a free teleclass.
• A profitable path means that you have designed points of interest that are appropriate to visitor’s level of interest and commitment.
• As they use introductory products and services some visitors will want to journey further into the garden. Not everyone will; some will get so far and then stop; some will rest awhile then proceed.

So far so good.

Now, here’s the trick to designing a path that continues drawing visitors into and through your garden: knowing what products and services are most relevant to your customers at different points of their journey.

To explain how this works, let’s go back to the client I mentioned at the very beginning.

Example: Designing a Profitable Path for a Time Management Consultant

Doing this requires you understand what your customers need at different points in solving their  problems. Here’s how Matt, explained a typical sequence to me:

“When people first contact me, they’re usually overwhelmed to the point that they’re not thinking very clearly. They just want relief.

“The excerpt they read from my book is actually an exercise that helps them see it’s usually a few key areas that need organizing; not their entire life. Just doing this calms people down so they can take more thoughtful action.

So the first step in Matt’s offer makes sense.

“After they read the excerpt which includes a subscription to my monthly ezine, 4 out of 10        people want something more. They like my approach and my style and they’re willing to spend more time and energy to get help.”

“These people aren’t ready to hire me to come in and set up businesses processes but they definitely want some support and guidance.

“I’m thinking an economical way for me to provide more support would be to offer a low-cost teleclass; maybe 3 or 4 on different topics. Then people can pick and choose ones that fit their particular situation.”

“Once people take the class, hmm, what would they want? Some may be ready to hire me to do a customized consult but maybe others don’t need such an intensive service.

“Maybe I could offer a one-day workshop in which I teach them how to assess and improve how they do their work. And I could include a free copy of my book as part of the workshop materials.”

Can you see how Matt has created a garden path with three points, each offering a higher level of support and service?

Entry: Book excerpt download & ezine subscription

Point 1: Low-cost teleclasses

Point 2: Mid-priced one-day workshop

Point 3: High-priced custom consult

Compared to his initial offer this new progression enables Matt to:

• Provide customers with meaningful, relevant options
• Earn more revenue by including low- and mid-priced services

Bottom Line

If you are a small business owner and are struggling with the question “how do I best serve customers who want more from me?” Use the idea of designing a path to develop additional offers to serve customers at higher levels of commitment.

Many small business owners I talk to always seem to be playing catch up when it comes to their marketing.

Last week when I told a small business owner that she was doing a good job with her marketing, she replied “Oh, but I have so much to do!” in an apologetic tone.

So I asked her, “What is it that you have to do?”

“Well,” she said, “I need to redo my website, write a new brochure, update my Facebook page, and call clients whom I haven’t seen for a while. I’m also wondering, do I need to get a Twitter account and do I need to have a blog AND a website?”

Listening to her I felt sad. I mean who the heck laid down these requirements that a small business has to have so much in place so fast?

It Wasn’t Always This Way

100 years ago: before there were computers or radio or TV or desktop publishing, the requirements for being ready for business were simple and concrete.

For example, let’s say you’re newly arrived in Denver, CO around 1890. At this time, the American West is still pretty wild and there are thousands of people traveling west who need to supplies and gear for their trek through the mountains

You decide you’re going to open a dry goods store and sell supplies to all these aspiring miners and ranchers.

To have your business up and running you need:

• a physical location for your shop and a place to store supplies
• to build your store
• a source of fresh water
• fuel to keep the place warm when it gets cold out
• a dependable source of goods to sell to customers
• customers

Assuming you had the above along with a strong work ethic, some organization skills, and a grasp of accounting and inventory management, you had a good chance of succeeding.

I’m not saying this was easy. However the steps and the order in which you took the steps was clear cut.

Nowadays

In our brave new world of the Internet and the ability to connect with buyers around the world, it has become possible to start a business with little more than a good idea, a computer, and an Internet connection.

The promise is that anyone can set up everything they need for a successful business in a matter of weeks.

And that’s the problem.

Because on the one hand, it’s true: within a week you could have your

• website
• social network accounts (like Twitter and Facebook)
• Blog
• and online store

set up and ready for business.

And this is what is so horribly overwhelming for small business owners. It seems like you should have all these things set up and if you’re not, you’re somehow doing it wrong.

The Answer: Four Foundational Marketing Elements

This brings us back to the original topic: what marketing tools and structures do you really need in place so that your business grows at a healthy pace?

Here are  four foundational marketing elements that every business needs to have in place:

1. You need a clear definition of who you’re serving and the problem you’re helping them with.

2. You need a way for strangers to find out who you are and how you help. For example, attending networking events, publishing articles, blogging and contributing to discussion forums are all ways to introduce yourself

3. You need a way to stay in touch with people who are interested but not ready to buy. For example, postcard mailings, newsletters, and ezines are all ways to keep in touch.

4. You need at least one offer so that when people are ready to buy, you’ll know what customer problems your offer addresses, what questions to ask to find out if your offer is right for a prospect, and how to answer prospect questions.

Once you have a good definition of who your ideal customer is, you choose one, maybe two at the most activities for each element.

Example: Applying the Four Marketing Elements

Marianne is a nutritionist who, until recently, worked for a large university hospital. She’s now in the process of setting up a private practice with the intention to split her time between seeing private patients and teaching classes.

Here is what Marianne has in place for her marketing:

1. Marianne has defined her ideal client as adults who were recently diagnosed with Type II diabetes and want to find ways to control their blood sugar without using insulin injections.

Marianne specializes in helping her patients plan and carry out diet and exercise programs that make them less insulin dependent.

2. To meet people who might need her help, Marianne, keeps in contact with local doctors who are likely to make the initial diagnosis. She also writes tips and how to articles that she publishes on online article submission sites like Associated Content and Bukisa.

Marianne makes sure that when someone she meets wants to know more, they have the URL to a page on her website so they can subscribe to her newsletter.

3. To keep in touch with people who are interested in what she does but are not yet ready to make an appointment, Marianne writes a bi-monthly newsletter she emails to prospects.  In each newsletter she has a useful tip or how to.

She often uses what she’s written in a newsletter as an submission to article publishing sites.

In this way she gets the most from the articles she writes.

4. Marianne’s practice is relatively new and she has only one offer: individual counseling sessions with patients to help them create and follow diet/exercise plans.

She has one page on her website that covers the main points of her offer and suggest clients either send in a form or call her to set up some time to talk by phone.

Because many of her clients are 65+ Marianne has a printed one-page flyer that has the same information as her website page in case a prospective client is uncomfortable with using the Internet.

To summarize, Marianne has set up the following elements to market her practice:

• a simple website
• a bi-monthly newsletter
• scheduled calls to primary care physicians
• articles (which come mostly from her newsletter) submitted to online publication sites

Marianne does not have a Twitter account or a Facebook page or a shopping cart or a blog. She doesn’t do podcasts or make videos to show on YouTube. She could have these things but right now she doesn’t need to.

Bottom Line

There is a perception among small business owners that they have to set up and implement hundreds of available marketing activities in order to be “doing it right.”

This is because there are so many different technologies that allow business owners to connect with prospective customers, because business owners are always hearing buzz about these technologies, and because the technologies are often free and easy to implement.

The key is to know what you and your business need to connect effectively with perspective customers. Generally you need to set up only one or two activities to get in touch, keep in touch, and sell in order to keep a healthy stream of new customers and revenue coming into your small business.

(Note: Actually I was going to title this article, “How to use numbers in marketing without turning into the Robot from Planet X” but that was way too long for an email subject line.)

I typically write a lot more about the “human side of marketing,” because I think topics like trust, sincerity, and emotions get overlooked in most marketing advice discussions.

And no matter how clever your copy and fail safe your system, neglect trust building and you will have to work twice as hard at your marketing for half the results.

But that doesn’t mean you can ignore the numbers side of marketing. In this article I talk about why numbers are important and how to make them work in your marketing.

True Story

Last year I was promoting a new teleclass that I was very excited about. I had done the class as a live workshop twice and participants got great results.

It seemed to me that live success should easily translate into teleclass success, right?

I followed all the guidelines for successful online promotions, wrote a strong message, etc. And didn’t get a single sign up.

Someone suggested that I offer a couple scholarships so that we at least made or minimum enrollment of 8 participants. So I wrote another offer and posted it in a small business discussion forum in which I was well known and trusted by members.

Three days went by, then a week, and still, no one was signing up even to take the class for free!!!

Boy did that knock me off my center.

Lucky for me, I felt safe enough in this forum to post a second message telling folks that I was baffled and disappointed no one had taken advantage of my free offer.

Even luckier for me, other forum members responded with honesty and empathy. Of the ten people who responded:

• 2 said they were really excited about the class but they had other commitments on the class dates.
• 3 said they were focused on other parts of their business and weren’t ready to learn the subject I was teaching but to let them know if I gave it later in the year.
• 1 said they were on vacation when I posted the offer
• 1 said they didn’t feel they needed to take my class because they had already mastered the subject matter but they thought the class sounded great for those new to the topic.

The other three people didn’t mention the class specifically but said they appreciated my willingness to ask for help and encouraged me not to give up.

Here’s what I took away from the experience:

In marketing, especially in online marketing in which there’s not much opportunity to establish trust, you must put your message in front of a lot of people and repeat your message over and over again over a period of time.

Understanding the Odds

For your marketing to work (for an audience member to act on your offer’s Call to Action) all of these things need to happen. Your prospect:

• Actually needs what you’re offering
• Is aware that they need what you offer
• Trusts you and believes you’ll deliver what you promise
• Actually reads or listens to your message when it goes out
• has the time and money to take you up on your offer

The odds I use are 10 out of 100 in the case of responses to online marketing.

In other words, for every 1,000 emails you send to readers who have opted in to your e-mail list:

• 100 will act on your call to action (click through to your sales page)
• 10 will actually make a purchase

These odds are guidelines. Factors that affect your response rate include:

• Familiarity with your offer. The more often someone sees your offer, the more likely they’ll take the next step assuming they want and need what you offer
• Marketing message that is personalized to the problem and your prospect experiences the problem
• How well-defined your niche is and the likelihood that everyone receiving your message has the problem you’re addressing
• Your message avoids words and phrases that trigger spam filters, etc.

How These Numbers Apply to Your Marketing

If you’re a small business owner and use online marketing, here are the main points to take away:

Take Away Point #1 You Need a Large Email List

When someone tells me they’re disappointed with the low number of response they received from a promotion. The first question I ask them is, “How big is your list?”

And

How large is “large”? At least 500 subscribers, preferably 1,000.

It’s perfectly ok if you have a smaller list but you will need to supplement your online marketing with activities that are more personal: local networking, free presentations, etc.

Take Away Point #2 Repeated Offers Over Time are a Must

People don’t see every email you send

• They’re out of the office
• They’re reading their email on their phone and only look at the most urgent ones
• They accidentally delete your email

etc.

And even if they open your email they may not pay much attention because

• Your event is six weeks away and they just can’t think that far into the future
• They aren’t ready yet to take a class on the subject matter because other priorities take precedence

Which is why it’s so important to repeat your offers to your prospects over a period of time; such as six to eight weeks.

Because eventually, the people who want to enroll in your class or buy your DVD or hire you as a coach will actually see your offer, read it, and take action.

Take Away Point #3 Relevance is Important

The main resistance to point #2 is “if I send too many emails, everyone will unsubscribe.”

Which is why there’s point #3; they won’t subscribe if the offer is relevant to something they need now or are likely to need soon.

You can email an offer for discounted tire inspections to your heart’s content but there won’t be many takers if most of the people to whom you’re promoting don’t own cars.

Take Away Point #4 Don’t Forget Those Annoying but Important Details

Once I sent out an offer and had no idea why people weren’t registering until someone emailed me saying “uh, I think the link is broken.”

Sure enough, I hadn’t tested the link people were supposed to click to view the sales page on my website.

Doh!

So, don’t assume everything works. Make sure the links in your message take people where you want them to go, check to make sure your message isn’t peppered with words that will send your email right into spam oblivion, use the right dates and times, and check for typos.

Every one of those annoying little things can ruin an otherwise well done promotion and make it look like no one is interested.

Bottom Line

Numbers in marketing are every bit as important as your sincere intentions to serve. In particular:

• Remember you will lose about 9 out of every 10 prospects for each step they must take in the process to becoming customers.
• The more you depend on online marketing the more important it is to have a large list of subscribers.
• There are specific actions you can take to improve the odds so that you lose fewer people along the way such as repeating your offers, making sure your offers are relevant to prospects, and testing for technical problems.

You need to set objectives before you can tell whether Twitter is actually helping your marketing. More here:

MarketingProfs Articles : Better Than a Magic 8 Ball.

When Bob Dylan changed his style from accoustic folk to electric rock it caused an uproar among his loyal “folky” fans. Followers from his folk music days were stunned and upset, feeling betrayed and abandoned.

If you have a successful brand with a loyal following shifting your focus to a new customer segment may not have people wailing in the streets but there’s bound to be some angry muttering and loss of business.

One strategy you can use is to create a “sub-brand.” An interesting article in Marketing Profs gives details and an example.

A lot of small business owners are interested in blogging to connect with prospects and customers but are worried about the time commitment. 

I can relate I appreciate the opportunities blogging, social networks, and other web 2.0 strategies offer to cultivate business relationships. But no way do I want to have yet one more “to do” on my list.

Mack Collier of MarketingProfs suggests posting twice a week in the middle of the week (Tues., Wed., Thurs.). 

For more tips, read the article Ten Elements Every Company Blog Should Have.

You don’t need a PhD in Economics to understand supply and demand. If you want to increase sales you lower prices. If you’re getting more business than you can handle, raise your prices.

Even a six-year old running a lemonade stand knows this.

And from the current financial news no doubt you’re worried about sales and wondering if perhaps you should lower your prices to give people a little extra incentive to buy.

But there are some good reasons not to do this

The obvious reason is the hit your bottom line will take. Unless you have financial reserves, lowering your price is, at best, a short-term strategy.

The less obvious reason is lack of perceived value and it is this issue that holds the greatest opportunity as well as the greatest threat.

The Importance of Perceived Value

Take a few moments and think back to a purchase you made for which the value was so big and obvious that the price seemed more than justified.

An example from my own life was many years ago when I decided I wanted to make a career change and pursue desktop publishing. At the time, if you wanted to do anything serious with graphics you used a Macintosh and the Mac I wanted was way more than I could afford. But I wanted that computer with all my heart and I proceeded to do something which would seem to many people the height of foolishness. I cashed my savings bonds (the ones my grandparents had been giving me since I was born) so I could buy the Mac and an Apple Laser printer.

I had to pay some hefty tax penalties for cashing out the bonds and I was living pretty lean for a while but I loved having that computer and I loved learning about desktop publishing. As far as I was concerned the value I got from having a computer and some good desktop publishing software far outweighed the cost.

What’s important to remember is this: when perceived value is strong enough, people will go to great lengths to buy. The implication here is that when someone decides “it’s really important to me to have this,” they often find the resources.

Does this mean price isn’t important? Of course not. The term “great lengths” is relative. But in my experience if you don’t do a good job communicating the value of what you sell to customers, you make it easy for them to say they can’t afford it, don’t have the time, etc. etc.

So this bring up the question, how do you improve the perceived value of your products and services?

Increasing Perceived Value

One of the best ways to increase perceived value is by changing your focus from product to solution.

Great example, one of my clients recently wrote a book on small business loans. Initially he priced the book at $29 and was discouraged when he realized he’d have to sell an awful lot of books to even pay for the printing. So I suggested he rethink what he was really offering and consider creating a program around helping small business owners optimize their chances of getting loans. The book would be one component of the program which would include teleclasses, one-on-one coaching, a quick start guide, forms, and templates. Shifting the focus from product (book) to solution (getting the loan you want) increased the perceived value of his offer and enabled him to increase his price significantly.

This is different from a tactic I often see where you buy the book and get a gazillion free guides, audio recordings, ebooks, etc. Doing this does NOT improve perceived value. The main reason is the add ons are rarely part of an integrated solution and it is the time and effort you’ve taken to synthesize the materials that creates the real value.

Even worse, when I see offers that include a ridiculous amount of extras, it can feel overwhelming to try to figure out what’s useful and what’s not. It feels to like the owner is saying, “I can’t be bothered to figure out what is useful or not so I’m going to send you everything and you can figure it out.”

Confusion and overwhelm is not something most people value. In fact it usually has the opposite effect and cheapens the perception of what you’re offering.

Bottom Line

When times are tough and money seems scarce it’s very tempting to lower prices as a temporary measure. Before you do, take a moment to see if you can, instead, improve the perceived value of your products and services. It’s possible to avoid price cuts…even actually increase your price if you understand the value your customers are getting and what it is really worth.

Words like “exceptional,” “superior,” and “best” are thrown around so often in marketing copy most of us have become immune to their meaning. I think it’s worth stopping to think and ask “what does this really mean to me and my business?”

“Do not think a man has done his full duty when he has performed the work assigned him. A man will never rise if he does only this. Promotion comes from exceptional work.”

Andrew Carnegie (1835-1919)
Scottish industrialist & philanthropist
founder, Carnegie Steel Company

This quote landed in my mail box this morning courtesy of the JustSell folks who publish Sales Quote of the Day. If I like the quote I save it to a “Good Quotes” file I keep (as a writer, I find good quotes often come in handy). This particular quote however, almost ended up in Outlook’s Delete file.

Why? I’ve developed an aversion to quotes and sayings that advise “working hard, going the extra 10%, and perseverance.” I’ve been hearing quotes like this since I was in Kindergarten and while they sound good “work really hard; get rewarded” the words now strike me as empty and overly simplistic. Yet so many of us read them and accept the mantra without asking what does this “really mean?”

In this case, it means more when viewed in the context of Carnegie’s life. Although Carnegie is remembered primarily for making a fortune from the new steel industry in the U.S., his real genius was in looking for better ways to accomplish whatever he set his sights on.

At the age of 16, Carnegie began working as a messenger for the Ohio Telegraph Company. He quickly distinguished himself by learning to translate Morse code by ear. This meant he could get messages simply by listening to them which was faster than writing the messages down.

During the Civil War Carnegie was appointed supervisor of military railways.  Building and repairing the rails and trains required large supplies of iron as well as steel which was used for the rail ties. Carnegie quickly grasped the potential of integrating iron works with steel production and set about creating what would later become U.S. Steel.

Carnegie’s philanthropy was also rooted in a desire to find a better way. Growing up poor in Scotland, Carnegie saw the English Monarchy as an impediment to social progress. He became an outspoken advocate of the Republican ideal in which the wealthiest and best educated citizens provided the means for those below to improve their situation through education and jobs which provided fair wages.

Although from today’s perspective, Carnegie’s social intentions seem naive and elitist, this was radical at a time when poverty was viewed as the fault of the individual and the result of laziness, poor discipline and other personal defects of character.

So, put in context, this quote is about pushing past mediocrity and complacently and finding ways to make a real difference. From my own perspective, this means creating a business that stands for what I value regardless of making some folks uncomfortable.