A statistic research to evaluate the impact of COVID-19 on businesses condition was made by the government indicated that 32.0% of businesses with 500 or more employees reported declines in revenue of 20% or more. This figure almost doubles for smaller businesses where nearly 60% of those with 1 to 4 employees and nearly 56% of those with 5 to 19 employees reported declines in revenue 20% or more.
In order to survive, a lot of businesses have chosen to increase their prices during the pandemic to generate more revenue but is it really the right strategy to use?
To start, the price of the product is the first thing that almost 80% of the customers look at before buying a product. Only increasing your price is not a marketing strategy and if you want to generate more revenue quickly, here’s what you can do: 1)Understand your niche and your ideal client: There is multiple types of customers and in order to attract more of your potential clients, you have to understand their consumer behavior. The most common ones are the need-based customers, impulsive buyers and the discounted buyers.
However, if we only focus on the pricing strategy, realistically a lot of customers don't mind paying more because they pay for the quality, the prestige and the experience. If a service/product is priced at a lower price point, they won’t value it, they will automatically think it’s cheap and not necessarily beneficial. If you have established brand authority and your products/services are perceived as luxurious, increasing your prices will serve you.
However, a discounted buyer would think that your product/service is not affordable and will prefer going somewhere else with more affordable prices. Your prices should reflect your ideal clients' needs and consumer behavior.
2)Upsells and funnels: You don’t need to increase your prices in order to generate higher revenues. Funnels are a game changer and the goal is to make sure you are offering something of value to your target audience to generate a basic interest in your brand, products and services. Once you craft a conversion funnel, upsells will also help you with your sales and even if you are a service provider, upsells are literally everywhere.
For example, when you go to the nail salon, they ask you if you would like a pedicure too? that’s an upsell
Or when you go to the post office, they ask you if you want to purchase tracking that’s also an upsell
Or when you get a mortgage, the insurance is an upsell
3)Create an offer suite: When you have an offer suite, you can serve more people, which means you can potentially make more. If you increase your prices and someone can’t afford your top service/product, create something similar with a lower price and lower value. Depending of the person budget, they can pick and choose, and you will still be making profits. Eventually these clients can convert to your highest paying clients.
4)Innovation: The more you invest in your business, the more valuable it becomes. I am also talking about knowledge, new procedures, new products and new fabrics. Follow the trend and your business will be more in demand.