Archive for April, 2009

An Expert’s Guide to Discounting

Posted by ArcherTC on April 27, 2009  |   No Comments »

Cutting prices without cheapening your image or losing full-paying customers is an art. Timing and flexibility are crucial

Think before you slash. That’s the advice John Quelch, a professor of marketing at Harvard Business School, gives to business owners tempted to cut prices. “You don’t want to give away your profit margin to customers who still would have paid full price,” he says.

Whether they’re following Quelch’s advice or acting impulsively, nearly 30% of small business owners say they have lowered their prices, according to a February survey by the National Federation of Independent Business. “They’re struggling and asking, ‘What can I do to save my business?’” says Martin Lehman, an adviser with the New York offices of SCORE, a nonprofit business counseling group.

If sales are hemorrhaging or customers are flocking to dealmaking competitors, discounting might be necessary. That’s especially true if you’ve already exhausted other options, such as offering consumers extra perks or improved service. But chopping prices is not without risks, including a cheapened brand image and customers who will never pay full price again. And if there’s no demand, even signs that scream “Lowest Price Ever!” won’t draw customers. “The primary factor that determines the price you’re going to get is what the demand is,” says Roland Rust, chairman of the marketing department at the University of Maryland’s Robert H. Smith School of Business. “In a situation where people want things less, the price has to be right.”

To discount successfully, you need to take a look at what your competitors are up to, then analyze your company’s previous experience with promotions. If discounting is uncharted territory, you might experiment with a short-term sale to test the waters or, if you can afford it, bring in a research firm to gauge customer responses to proposed price cuts.

You’ll also need to avoid the common blunder of sacrificing quality or customer service so that you can lower your prices. “Once a company gets a reputation for poor quality, it’s hard to turn that around,” says Rust. Another mistake is discounting too heavily. Depending on your industry, a 10% discount may actually be quite attractive, Quelch suggests. And avoid the sledgehammer approach of slashing prices across the board. Instead, trim prices on specific products or services—those that are slow-moving or have higher margins.

The key is to dish out deals without purging your profits. Here are six survival-mode strategies from pricing experts and the entrepreneurs who are making them work. …read more at An Expert’s Guide to Discounting – BusinessWeek (http://www NULL.businessweek NULL.com/magazine/content/09_64/s0904059715961 NULL.htm), published 3 April 2009.

Flickr photo credit: quinn.anya (http://www NULL.flickr NULL.com/photos/quinnanya/2186149267/)

Sweet Returns

Posted by ArcherTC on April 27, 2009  |   No Comments »

An upscale pastry store thrives by finding new markets

As the economy began to deteriorate in early 2008, a few things became clear to Gary Gottenbusch, owner of Servatii Pastry Shop & Deli Inc. in Cincinnati: Customers were purchasing smaller items in an effort to be frugal, and soaring prices for flour and other commodities were threatening to eat into his profits.

A trained baker whose family has been in the bakery business for decades, Mr. Gottenbusch knew the danger the situation posed to his small business, which sells upscale European cakes like Vienna tortes, along with more common fare such as cinnamon bread, at 10 retail locations in and around Cincinnati.

“My overhead was totally fixed, and I knew if I lost my sales, I would lose the profitability,” says the 44-year-old Mr. Gottenbusch. “It was time to be aggressive in getting more volume.”

Chef David Burke is known for his creative cuisine. Now he’s using that same creative approach to weather a downturn in dining out. He talks with WSJ’s Beckey Bright about his strategy.

So, instead of hunkering down and hoping the economic downturn would be short-lived, Mr. Gottenbusch reinvented his business. With the help of the Manufacturing Extension Partnership, a program partially funded by the Department of Commerce and designed to give small firms access to manufacturing specialists and other advisers, Mr. Gottenbusch looked for new customers in unusual places, created unique products to drive store traffic, joined a purchasing association to keep costs in check and took advantage of the real-estate slump to scoop up a new store location on the cheap.

The result: Servatii not only survived last year, it thrived, with sales rising 15% to $8.5 million. …read more at Sweet Returns – Wall Street Journal (http://online NULL.wsj NULL.com/article/SB124025312325335983 NULL.html), published 23 April 2009.

Photo credit: servatiipastryshop.com (http://www NULL.servatiipastryshop NULL.com)

Building a Charismatic Nonprofit

Posted by ArcherTC on April 27, 2009  |   No Comments »

“What distinguishes a good nonprofit from a great nonprofit? At the end of the day, the great, charismatic nonprofits are not necessarily those that have charismatic leaders, but those that can create strong social capital,” said Deborah Jospin at a Center for American Progress event about the book she co-authored with Shirley Sagawa, The Charismatic Organization: Eight Ways to Grow a Nonprofit that Builds Buzz, Delights Donors, and Energizes Employees. Nina Easton, Washington Bureau Chief of Fortune Magazine, moderated the discussion with Sagawa and Jospin.

The danger of basing an organization around one person with charismatic leadership qualities is that the focus can quickly become the leader rather than the organization. A leader can always leave an organization. This is why Sagawa and Jospin argue that building a fundamentally strong, team based nonprofit will be a more effective method in the long run than relying on individual leadership.

“There are two kinds of social capital,” explained Sagawa. “One kind brings people together and unites them in a cause so that they want to be part of that community.” This is especially valuable because it means that, in hard economic times, an organization’s donors and supporters will still be there and feel a connection to that cause. The other type of social capital is “bridging social capital.” This means that an organization is able to reach beyond its immediate network, which allows it to expand their donor base or political influence. …read more and see the video at Building a Charismatic Nonprofit – Center for American Progress (http://www NULL.americanprogress NULL.org/issues/2009/04/nonprofit_event NULL.html), published 21 April 2009.

Flickr photo credit: an untrained eye (http://www NULL.flickr NULL.com/photos/an_untrained_eye/1185704829/)

How to Finance a Business Start-Up

Posted by ArcherTC on April 20, 2009  |   No Comments »

Q: My son has a sure-fire business idea that’s gonna make us rich. Who do we see to get $100,000?

A: I was asked this question by a very serious forty-something father with his teen-something son in tow at a business opportunity fair not all that long ago.

I was tempted say that if I knew someone with that kind of money burning holes in his or her pockets, would I be standing there talking to them? However, my answer was the one any prospective entrepreneur will hear when asking for money: “Let’s see your business plan.”

Even if your business is to be an in-home affair and you’re the only employee, you need to be able to answer two questions before any lender or investor will write you a check:

  1. What will it cost?
  2. Who’s going to buy it?

These are the questions that a business plan answers. Step one is …read more at How to finance a business start-up – Examiner.com (http://www NULL.examiner NULL.com/x-8145-Portland-Starting-a-Business-Examiner~y2009m4d19-How-to-finance-a-business-startup), published 19 April 2009.

Flickr photo credit: YTK23 (http://www NULL.flickr NULL.com/photos/ytk23/2185074558/)

Small Business SEO: How to Launch That Web Site

Posted by ArcherTC on April 20, 2009  |   No Comments »

It’s hard when you’re small. Everything seems bigger and more intimidating. Puppies get toppled by bigger dogs, middle schoolers are stuffed in lockers and small business owners back away in fear of this whole “Internet” thing. But like the chess player who grew up to be accepted by the Homecoming Queen, you, too, can overcome! The trick is to never let your fear stop you from your plans of World domination.

Though you may be smaller, there’s no shortage of opportunities for small and medium-sized businesses to compete in search. And that statement is made even more true when you consider that nearly 40 percent of searches include local intent and that the search engines are now using local results even when a user doesn’t implicitly ask for them. If you’re a small business, that’s an opportunity.

Okay, so say you’re a small business looking for search on a dime. You have your domain, your hosting is squared away, you have a few pages of content up and you’re finally ready to attract the world (or at least your city) to your Web site. Being small means you need to be smarter. It’s about doing all the little things that will pack the big rewards. Where do you start? …read more at Small Business SEO: How to Launch That Web Site – outspoken media (http://outspokenmedia NULL.com/small-business-marketing/launch-your-small-business-website/), published 15 April 2009.

Flickr photo credit: Artelier Teee (http://www NULL.flickr NULL.com/photos/atelier_tee/2478897483/)

Show Me Your Price List

Posted by ArcherTC on April 20, 2009  |   No Comments »

Pricing… you can’t be a professional photographer for very long without becoming embroiled in the subject of how to price your work (well, you could, I suppose, but you would never make any money). Then there is the question of, not only what prices to charge, but also how to make your clients aware of your price list without them either running away or thinking you are trying to pressure-sell them.

Price Lists! Get ‘em Here!

In the time that I’ve been working as a professional photographer, I’ve personally tried different methods of communicating my prices to clients and potential clients, with varying degrees of success. These include the usual suspects:

  • Printed pamphlet
  • Combined price list and brochure
  • Web site page
  • By email

However, the problem I found with these methods was that sales just didn’t seem to be where I wanted them to be. I would hand out price lists to prospects who requested them, count the number of web hits to my price list page, or email my list to anyone who asked for it – yet the prospects disappeared as quickly as they came, like ghosts. Unless these people were simply professional price list collectors, it was a complete mystery to me, and it doesn’t take too much of that to think to yourself, “my prices must be too high.“

The (Second) Guessing Game

Looking at my price list, and thinking about the lack of returning prospects, I really did start to imagine that my prices were too high – so I made the terrible mistake of lowering them and trying again. Yes, you guessed it – I got just the same result. So, we get caught up in a terrible cycle of continually fiddling with the prices. Up and down like yo-yo’s they go!

Does any of this sound familiar to you? Are you stuck in that no-man’s land of trying to second-guess your prospects to discover what you think they would pay, rather than what you think they should pay?

Well, you’re not alone – just about every photographer I know has been through this painful process. But, there is an answer… read more at Show Me Your Price List – Zenologue (http://www NULL.zenologue NULL.com/blog/2009/01/show-me-your-price-list/), published 22 January 2009.

Flickr photo credit: Burnt Pixel (http://www NULL.flickr NULL.com/photos/keithwj/365098384/)

Customer Strategy Tips from an Indie Rocker

Posted by ArcherTC on April 20, 2009  |   No Comments »

In August 2005, Jonathan Coulton quit his job as a software developer, with the goal of conducting an experiment: over the next year, could he figure out a way to earn a living as a full-time musician, leveraging the Web and his small-but-passionate fan base?

Coulton isn’t the only artist who is trying to come up with new ways of cultivating an audience and making a living in a post-label, post-studio, post-publisher world, where big advances and development deals are essentially a thing of the past for emerging talent. For my new book Fans, Friends & Followers, I spoke with thirty filmmakers, musicians, writers and comedians who’ve been developing new strategies for building a fan base that can support the work they want to do. Many of their strategies would be equally effective for businesses trying to generate buzz and attract loyal customers – without an enormous marketing budget.

Coulton, for instance, has discovered that by giving his fans an opportunity to collaborate with him, they’re more likely to feel like active, engaged supporters – more likely to purchase CDs, merchandise, downloads, and concert tickets.

Here are just three of the ways Coulton has invited his followers to get involved with his career, each of which could be applied by many kinds of businesses. …read more at Customer Strategy Tips from an Indie Rocker – Harvard Business Publishing (http://blogs NULL.harvardbusiness NULL.org/cs/2009/04/customer_engagement_tips_from NULL.html), published 17 April 2009.

Photo credit: Dale May Photography (http://www NULL.dalemayphotography NULL.com/)

Making Small Business of Big Breasts

Posted by ArcherTC on April 6, 2009  |   2 Comments »

On the far edge of a bustling new city center, a neighborhood boutique sells intimate apparel to a dwindling, but dedicated customer base. As part of its efforts to keep customers aware of their signature advantages over the chain stores, the shop works closely with each client to ensure a custom fit, a service for which they charge a nominal fee. One day, two new potential customers arrive: young friends, one of whom is bringing the other to the shop to select undergarments for her wedding day. The visit ends in disaster, the subject of the following letter.

As a fellow small business owner, what would you advise the shopkeeper to do?

Dear Madame:

I am writing to express my distress about the encounter my friend and I experienced in your shop on Saturday, July 9. I am also writing to suggest a remedy.

My friend and I were first-time visitors to your store, but eager to shop there. I had seen your shop a number of times on my way to the city center, and a co-worker and neighboring resident had expressed her enthusiasm for it. In any case, my friend is soon to be married in September and, because she wears an usually large size, I thought this would be the perfect place to take her for a wedding gift.

As first-time visitors, we were very taken with the intimate-wear on the racks. I was pleased when a shopwoman approached us regarding a fitting, and my friend readily agreed. Not surprisingly, my friend had been too consumed with checking out your impressive selection rather than reading any wall signs. So was I. That means she received an unpleasant shock when she was told that the fitting would cost her $5.

Although my friend apologized for her ignorance and the shopwoman agreed to waive the fee, the situation still escalated unpleasantly. Indeed, both the shopwoman and you, the owner, insisted that a couple of signs stated the $5 policy. What was troubling, however, was your insistence that we should have noticed the signs, which we inferred as either (1) “any dummy could have seen it” or (2) “you deliberately chose to ignore it so you could misuse our services.” Not surprisingly, we left without shopping further or expressing an interest to return for a later purchase.

Because I have worked in customer service positions, I am not so foolish as to assert “the customer is always right.” But I do believe that customers should be given the benefit of the doubt and that deferring to misunderstanding more often than not serves to shore up good feeling and repeat business. Why did we not hear “we’re sorry for the misunderstanding, please come back again” from you or your staff?

Well, there is still opportunity for that. I would like to support a boutique shop such as yours and would like to recommend your business to my similarly-busty peers. I am enclosing the address of my friend below and I am requesting that you send a note of apology to her for yesterday’s incident and an invitation to her to return. I am certain that she would receive it well, and that she would signal to me a willingness to shop at your store again. Her name is Name Withheld and her address is 3200 Nameless Avenue, Apt. 301, Anycity, VA 12345.

Thank you for your prompt action. I look forward to hearing from you.

Sincerely,

Your Customer?

Readers, your advice for the shopkeeper?

Flickr photo credit: James@mannequindisplay.com (http://www NULL.flickr NULL.com/photos/mannequindisplay/264680725/)

Boost Your Brand

Posted by ArcherTC on April 6, 2009  |   No Comments »

How to find the perfect pitch person to get your message out

Inventor Michael Boehm’s instincts told him the concept he had been shopping to various manufacturers—-a portable contact grill that cooks food items faster and more healthfully-—had great promise. So why couldn’t he find a corporate partner to help take the product to market?

It was 1993, and Boehm had spent a year fruitlessly searching for someone to buy into his idea. Rather than back-burner the grill, he decided what the concept needed–not only to land corporate backing but to resonate with consumers–was some star power.

The rest, as they say, is history. Boehm targeted boxer George Foreman to be the spokesperson for the concept. “I knew he ate two burgers before every fight and that he and his sons were all burger freaks,” he says. “To me, he was a perfect fit to represent the product.”

After checking out a prototype of the grill, the Foreman camp agreed it was a good match, and the heavyweight signed on to represent the product. Soon thereafter, with Foreman’s muscle behind the grill, Boehm found a company, Salton, to take it to market. Now, 14 years after Salton rolled out the George Foreman Grill, it has sold a whopping 100 million units.

The Foreman grill has become a textbook example of how enduringly valuable a high-profile spokesperson can be when that person is carefully selected and wisely deployed in the scheme of a marketing strategy. …more at Boost Your Brand – Entrepreneur.com (http://www NULL.entrepreneur NULL.com/marketing/marketingideas/article201036 NULL.html), published 2 April 2009.

Flickr photo credit: pdicko (http://www NULL.flickr NULL.com/photos/60778210 null@null N00/515365087/)

Business Answers: Finding Grants & Investors

Posted by ArcherTC on April 6, 2009  |   No Comments »

In this video segment, Ken Yancey, the CEO of SCORE, and investment advisor Phil Town answer questions from MSNBC viewers on funding for their small businesses. The two debunk the myth of federal grants, caution viewers on accepting investment dollars from friends, and clarify the full credit risks of bank loans.

Author Peter Johnson offers some advice on what to do before you seek investors (http://money NULL.cnn NULL.com/video/fsb/2008/12/11/fsb NULL.urg NULL.johnston2 NULL.smb/) in this December 2008 video interview with CNN Money.

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