When I recently wrote this article for Inside Small Business it went viral, obviously resonating with many small business owners. What it highlighted to me is that you can learn a lot by listening to others and avoiding their mistakes. Start by realizing your true value.
Like most small business owners in a rural community, you try to please your customers by offering a reasonable price for your goods and services. Often, we drop that reasonable price even lower for a ‘nice’ local who says he or she is doing it tough. They work for a set salary while struggling to raise a family. You know them well because your kids go to school with theirs.
Over the years this ‘nice’ local becomes a loyal customer as they work hard to improve their situation and, true to form, each time they cite tough times as they send their children to university, renovate their family home, and then move to a new location and build a new home. In return for their loyalty and in sympathy, you continue to cut a bit off your invoice.
Fast forward 25 years and that ‘nice’ local has retired with their healthy superannuation, to enjoy that new holiday home and top model four-wheel drive they have just purchased with ‘their’ hard earned savings.
You look at your books and wonder how you’re ever going to retire let alone trade in that old work vehicle that should have been replaced five years ago.
Two questions came to mind when I recently heard this sadly true and all too common story. How highly do your customers respect your business? More importantly, how highly do you value yourself?
While you provide a high-quality service or product to maintain your integrity and reputation in a small community, dropping your price doesn’t necessarily increase customer satisfaction. They will still complain just as heartily; probably more because their respect for you is already low. And they will continue to expect low prices EVERY time.
And, let’s be clear; YOU gave them permission to think and behave this way.
So what can we do differently as a small business owner?
Understand your worth and respect your right to earn a decent living.
Be clear on your product or service’s true value. If compared with a cheaper alternate make sure that customers understand the differences in quality, transport costs, and access to follow up service.
Only discount when it is strategic and it doesn’t impact on your bottom line.
Offer alternatives such as lay-by and part payments when a customer cites difficulty.
Walk away when you need to.
Look after yourself first so you can then look after others.
I’d love to hear any other tips you may also have.
KERRY ANDERSON: Author of ‘Entrepreneurship: It’s Everybody’s Business,’ Kerry works with small businesses and rural communities to help them embrace new opportunities. READ MORE