You already have in place the tools to survive the recession. Learn the psychological factors behind offering incentives. And then enjoy the 8 Practical Strategies listed for precisely how to offer incentives.
Offering incentives is a powerful tool to survive a recession by keeping existing customers with you. Plus, incentives will allow you to reach new clients who will grow your business even in a down-economic cycle.
What businesses, especially small businesses, want to avoid is discounting the cost of their products or services to the point that it hurts the bottom line.
However, if your incentives are designed to attract customers to your business because they want what you have to offer, price will be less important than value.
For example, many of the major U.S. makers of large cars and vans have offered discounts and incentives on top of ever more generous rebates. Yet, the small fuel-efficient cars that come with fewer incentives are selling more, because more consumers consider them a better value in the wake of rapidly-rising gas prices.
In a recession, there are three practical and psychological factors at play that can be your cue to how you want to use incentives.
Hundreds of studies point to: - The practical issue of consumers having less disposable income,
- The practical issue of our over-stressed, time-starved society, and,
- The psychological issue of general worries about the future because of the uncertainties created by a weak economy.
So first ask yourself: What incentives can I provide that will address money, time and general consumer worries?
- Can you offer "money-saving" values versus price cuts?
- Is it time to focus on how your services or products can save time?
- How can you solve a problem? Can you promote your products or services as the answer to one or more consumer concerns, including general economic worries? Can you position your business as the trustworthy choice?
Here are practical incentives strategies for businesses of any size:
- Bundle up to create money-saving values as incentives. Cell phone and cable companies profited greatly by bundling their services. Revisit your products or services and ask: How can I re-package two or more and promote this new package as a "new, money-saving value" that will save consumers time?
- Use "value" language. The focus should be on the words "value," "money-saving" and "time-saving" versus the words "cheap," "discount," and "bargain basement." If you are faster, more reliable and more comprehensive than your competitors, you are a "money-saving" value. Why? Because time is money, and you save clients time.
- Offer a gift. Who doesn't like presents? Gift cards have been one of the fastest growing sectors in the incentives category. A "gift" doesn't have to come in the form of a gift card. A business can offer a gift of a special white paper or article that will be useful to the client, or a free hour of your services for "x" number of hours billed.
- Focus on free as an incentive. "Free" is a powerful calling card. Instead of slashing prices that you can't afford to slash, focus on what you can "add" that is free. Offering free subscriptions to online e-newsletters that offer valuable, practical information. In this Information Age, information is money, so offer information free.
- Reward your true-blue clients. When money is tight, consumers go comparison-shopping. Firms that don't pay attention to their true-blue clients can become vulnerable if they take these clients for granted. High-end retailers offer their high-spending customers special values such as by-invitation-only events or gift certificates. What by-invitation-only information or event can you provide to your true-blue clients?
- Reward your first-time customers. You also want to make your first-time customers your future true-blue clients. Offer incentives geared toward first-time customers.
- Partner up to offer perks. Another way to offer incentives without slashing your fees or incurring extra costs is to partner up. This is also a smart way to expand your client base. A financial services firm can partner up with a law firm to offer a free online or on-site seminar on law and money. Hotels partner with wholesalers to offer wine or cheese tastings. Choose a partner with a compatible client demographic.
- Don't forget your employees. In a recession, don't forget that your employees are cash-strapped, time-starved, worried consumers, too. Offering internal incentives, like setting aside a perk being offered to customers as an employee incentive works well. Offer a day off, which can enhance your bottom line by allowing employees to relax and re-energize. Then, they too, can survive the recession.
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ABOUT THE AUTHOR
Ruth Klein is a branding, marketing, publicity and time management consultant to law firms and business professionals ranging from solo entrepreneurs to the Fortune 500. As an award-winning business owner with a master's degree in clinical psychology, Klein brings her unique, results-driven insights, expertise and practical solutions to her law firm clients. For more information, visit http://www.ruthklein.com .