How Does Deflation (Negative Inflation) Affect Your Pricing Policy?

The potential of deflation has been talked about for what seems an age.  Now it has hit home with a rate of -0.4% as inflation has not dropped below zero since the 1960s (nearly 50 years).

Low mortgage interest rates have helped to take us into negative inflation.  As a consumer, you will have personally been affected by fluctuating prices – food and fuel in particular.  Likewise, your consumers and clients will also be affected, not just by the amount of money that they have in their pocket, but also by how confident and secure they feel about the future.

The Retail Price Index (RPI) measures prices of over 1400 items that includes transport, mortgage interest, food, fuel, leisure, catering, alcohol, services, clothes and shoes.  See National Statistics - http://www.statistics.gov.uk/instantfigures.asp for further details. 

Pricing as a Marketing Tool

Pricing is a crucial marketing tool and can either win or lose customers.  Pricing can help you to position your products and services in a particular market aiming it at a specific target group.  Whatever you are selling, the end user/consumer must feel that it offers value, solves a problem and that they can afford it.  If not, you will lose the sale. 

Impact of Continuously Lowering Your Prices

If you keep lowering your prices, then your potential customers and clients might put off buying from you thinking that your prices will fall again at some point in the very near future.  There is nothing wrong in lowering your prices to a level that you feel the market will tolerate.  However, you need to be aware that you can devalue your offering, and feed into the downbeat news that feeds into negative inflation. 

Add Value with Pricing Options

1. Consider putting promotional packages together (consisting of your products/ services) for set time periods and sell at a discount. 
2. In a downturn, consider maintaining your prices but offer more for the same cost.  Keeping your prices the same can demonstrate your confidence in what you do as long as you are completely in tune with what your target audience needs and wants.

The Pirate Bay Business Model

You have probably seen a tremendous amount of coverage for this Swedish based file sharing website recently.

Pirate Bay provides links for users to download videos, music, audio files, games, video and applications. The problem is that the materials that they provide access to are copyrighted and the big movie studios and record labels are not playing ball.

Even though the Pirate Bay do not host the items (save on their servers), they provide access to it. This, according to a Swedish court, has been deemed to be unacceptable – well illegal to be more accurate. The founders have been sentenced to jail time with a huge fine. Whilst the courts work through the appeals process, it’s fair to ask what has this got to do with marketing for entrepreneurs?

Apart from the obvious point of making sure that the products/services that you provide are not illegal, a few issues sprung to mind.

Copyright

The Pirate Bay quite clearly infringed the copyright of lots of companies who have substantial legal clout. In your endeavours, make sure that if you use material that does not belong to you, you correctly reference it. Don’t fall into the trap of just copying what someone else has written, take the time to interpret it and put it into your own words if need be.

Delivering What the Customer/Client Wants

The Pirate Bay team clearly found a gap in the market and delivered what people wanted at a price that they can afford. In order to succeed, you must take the time to find out what your target market wants and then deliver it in the format that they want at a price that they can afford.

Driving Traffic to Your Site with Freebies

The Pirate Bay business model is difficult to compete with as items that would normally have a price attached to them, do not cost anything at all. Aim to offer something free to potential/actual customers or clients in return for them to provide their email address or respond to research questions for example.

Free Online Tools

The web is a resource that is under utilised by many businesses.  It is fair to assume that many businesses in general could make more use of the web to grow their businesses. 

Technology is at the heart of guerrilla marketing as it creates a level playing field and allows entrepreneurs to flourish by defining a niche, automating processes and offering products to a targeted and segmented audience. 

21st Century OnlineIn the twenty first century there are so many cost effective or free options available.  Apart from an online brochure, the web allows you to create a relationship with customers/clients, to communicate with them on a regular basis, build a bond of trust and emphasise your expertise. 

 

The advent blogs, podcasts, forums, multi-media and social networking for business purposes and despite the size of your business, you can demonstrate your business acumen to a worldwide audience if you wish. 

Cost of entry is low – at minimum you need an internet connection and then you can either learn how to create your own website using various tools yourself or outsource the tasks to someone else.  If an ecommerce website is needed, then companies such as BT Tradespace and free online classifieds offer free web space to sell products online. 

Top five free online tool categories:

1. Sell online (free) – BT Tradespace, Free Classifieds
2. Social Networking – Facebook, LinkedIn, Twitter
3. Non Hosted Blogs – Blogger.com, Wordpress.com
4. Online Video/User Generated Content (UGC) – YouTube
5. Podcasts – Audacity Recording Software

Overcoming Barriers to Business Growth

As an entrepreneur, I am sure that you have already realised that success is not a given and that consistent ‘action’ is essential to drive your business forward. It takes more than good luck to acquire new customers, sell more to existing customers, increase your profits or successfully introduce new products or services to the market. 

Growing in a Competitive Economy

There are many businesses relish the challenge of growing businesses in a competitive economy and will capitalise on opportunities that come their way.  However, it stands to reason that a large proportion of entrepreneurs have found the current economy difficult (and in some cases impossible) to trade in.  Some businesses have found the issue of change very unsettling as the rules of the game have changed completely. 

Change can ultimately erode confidence especially with continuing stories of doom and gloom in the media.  You have a choice as a business owner of whether to stand still and hope that everything will be OK or to take action to change your situation.  The key issue is not that challenges are there but really that we have knowledge, strategies and tools to overcome them. 

Free Tutorial Video Series

Sign up for the ‘Overcoming Barriers to Business Growth’  tutorial series which highlights key issues that can prevent you from achieving your business goals. This is an interactive process where remedies will be provided in the form of action points.  You will be able to see how each issue affects your business.  You will also be given prompts to make immediate changes as they apply to your business today.

The five part tutorial video presentation series is divided as follows:

1. Overcome Fears of Change
2. The importance of having a vision and being open to new ideas
3. Time Management & Planning
4. Customers & Clients as the lifeblood of your business
5. Marketing your products & services

The Web - A First Point of Call

If you have a particular need that you think can be fulfilled by a product or service, the web will most likely be your first port of call.  Where else can you quickly and easily get the information that you need?

Be Visible Online

Even if you provide a local service, your potential customers and clients will often search on the web to find a product or service that provides a solution to a problem.  They will spend time reading up about the services/products that you provide and compare it to other companies using their own specific criteria.  More importantly, they will get an impression of your business and brand that will fill them with confidence and trust to convince them that you are someone to work with.

For retailers, an ecommerce website clearly offers the opportunity to be open 24 hours a day, provide detailed product information and attract an audience that is much larger than a typical bricks and mortar establishment. 

A good example is when a consumer considers buying an electrical item and researches the technical information online before visiting a retail outlet to help with a purchasing decision.   Unfortunately some retailers still manage to lose the sale at the point of purchase but that is beyond the realm of a website. 

Online Retailers

For potential customers, your website might be their only point of contact with your brand so first impressions are important.  Include your contact details such as a telephone number and/or email address and adhere to the Distance Selling Regulations for those retailers based in the UK. 

For businesses that only exist online, a website is the sole outlet for selling products/services so it is even more important.  If you have a generic web address e.g. Abc Enterprises, consider purchasing a new domain (web address) that is explains what you do and is more memorable for potential buyers.  In addition to this, search engines will use the keywords in your domain name as another way to target your website.

Guerrilla Marketing Philosophy

The main obstacles to successful marketing include a lack of commitment, a poor understanding of the benefits associated with what is being sold and poor brand positioning.

All entrepreneurs need to know why someone should buy from them and understand the benefits attached to what they are selling.  A business should also have an identity that is aligned with the prospect’s ideals to encourage a sale. 

Guerrilla Marketing Mindset

Guerrilla marketing philosophy emphasises the need to have a plan to get you from where you are now to where you want to be in the most efficient way.  Many of us have encountered a speculative sales call and bought advertising space that produced no results.  The aim is that you do not waste time by following the well worn path of many entrepreneurs i.e. pay for advertising without really having a strategy in mind. 

Guerrilla Marketing Manfesto System

I have created the Guerrilla Marketing Manifesto ‘Breakthrough Planning System’, to allow you to review your marketing, create an efficient guerrilla marketing plan and then implement it – it is all about taking action.  The guerrilla marketing plan model will give you the chance to hit the ground running and not waste money on aimless marketing activity. 
 
You will be able to create an individualised long term marketing strategy and short term marketing plan to suit your needs and budget.  As you well know, in a competitive environment, ‘business’ enemies are out there of all shapes and sizes trying to sell more, advertise more, and take a bigger share of the market.  You need to step up to the plate.

‘ . . .   the two most important things you should know if you‘re to succeed with guerrilla marketing:  (1) Start with a plan and (2) commit to that plan.  If you do those two things, you’re off to the right start, and you’re primed for success.’ by Jay Conrad Levinson

Guerrilla Marketing Intro

Guerrilla marketing, aimed at small businesses and entrepreneurs, was introduced to the world in the early 70’s by the now legendary Jay Conrad Levinson.

In his international best-selling book, not surprisingly called ‘Guerrilla Marketing’, he outlines how to clearly define a seven step guerrilla marketing plan.  He also lists hundreds of low/no cost marketing ‘weapons’ (tools) which can be used to promote your business.

 
Guerrilla Marketing for SMEs
           
The term ‘Guerrilla’ in this context is a marketing methodology well suited for creative small businesses (SMEs) with smaller budgets.  This is in contrast to ‘traditional’ brand marketing used by big businesses with money to burn.  The Guerrilla marketer has a ‘can-do’ attitude and knows that building trusting relationships and rapport with prospects and customers is at the cornerstone of any successful marketing strategy. 

Using a warfare analogy, the ‘guerrilla’ uses non-traditional techniques to outwit the opposition i.e. by combining a selection of marketing ‘weapons’ to grow profits with a unique array of ideas.  The guerrilla knows that the best battles include surprise attacks so marketing campaign ideas must be ‘out of the box’ – subterfuge at its best! 

Low or No Cost High Impact Marketing Techniques

The guerrilla marketer also knows that marketing must also have a high impact even if it is cost effective.  With technology at the core, the guerrilla marketer understands the psychology of target audiences and knows that communicating with prospects on a regular basis produces more meaningful results over the lifetime of the relationship. 

As a guerrilla marketer you must:

• Have a plan and stick to it.
• Know your market and create a relationship with your target audience.
• Promote the benefits of what you are offering and demonstrate value.
• Use a variety of low or no cost high impact marketing techniques knowing that online tools are essential.
• Operate within a niche - be a big fish in a small pond.
   

Marketing Defined - A Dark Art?

Believe it or not, marketing is not a dark art only perpetrated by ‘those in the know’.   Marketing is often thought to be public relations (PR), sales or advertising – the kind that can be heard on the radio, seen on the TV or read in newspapers and magazines.  Furthermore, many businesses treat sales and marketing as two separate disciplines where the two sides can be in conflict with each other working towards different goals. 

The Marketing Process
In reality, marketing is a process that includes reviewing current trading conditions, setting business growth goals with a marketing strategy and implementing a tactical plan to achieve chosen objectives.  The marketing ‘umbrella’ includes a variety of disciplines where specific tactics or tools are used to promote brand benefits attached to your products and services to a chosen target audience. 

Marketing in the Past
For many entrepreneurs, the foray into the world of marketing is an uncertain one.  In the past, it wasn’t unusual to have a business that was running for some time to generate revenue relatively easily using basic marketing techniques. 

Perhaps the marketing activity was called sales or lead generation but either way revenue is generated.  However, as the economy becomes more competitive and it becomes more difficult to make a sale, you need to establish a strategy and plan to stay in business and a halt potential decline in your revenue.   

Marketing for the Future

It should be said that a marketing plan will not, in its own right, guarantee that your business will be successful.  In the first instance, you must have a pretty good business idea along with a thorough understanding of your market/sector.  Your challenge is then to know how to position yourself in the market to distinguish yourself from your competitors, promote the benefits you offer, fulfil the wants and needs your customers/clients and track the results of what you do. 

Whatever you do to grow your business doesn’t have to cost an arm and a leg, but you do need to creatively target the right people with the right information at the right time.Most importantly, you must implement your plan – without putting your ideas in practice you will be dead in the water.