Why Your Small Business Advertising is Being Slaughtered by Competing on Price
Thursday, March 4th, 2010A key factor in any business is its advertising. While big corporations can afford to pay out a lot towards their advertising, small business advertising must be cost effective. Small businesses depend heavily on marketing techniques to draw more shoppers.
Thanks to the current recession, small businesses have been suffering. There’s an ever growing amount of competition, and a shrinking amount of resources. Without backup plans and the funds to undertake those plans like big businesses have, small businesses are closing their doors for good. Many new small business owners drop their prices hoping to increase customer volume and grow their business. But they don’t understand that a small 5% of customers decide on what to buy based on price. Small businesses end up with less wages, cut back marketing costs, and often throw away quality as a result of lowering prices. The other 95% of chopers that decide what to buy based on quality, service, and what they get out of advertising are ignored by taking the price route. Because small businesses usually don’t handle the vast amount of customer flow that large corporations do, they can’t benefit from a price drop in the same way.
If you’re cutting back on your small business advertising, then you’ll end up losing customers, because it’s effective advertising that attracts the price concerned customers. To make sure that a small business gets steady profit, it must focus on making a specialty of itself, rather than simply dropping prices. This in turn calls for effective small business advertising. First off you have to show your creative niche, and prove that you offer more than your competition with offers like unique service, better customer support, error free order, etc. After you’ve proven that you’re above and beyond the rest, you can then begin to actually raise prices and still attract more customers. Your small business advertising plays probably the biggest role in gaining your customer’s trust and loyalty. It should be able to convince the shoppers why you are the ideal choice for them. Small business advertising should focus on advocating your uniqueness and specialty; hence drawing in more customers.
When a small retailer decides to compete on price, he is on risky grounds. There can only be one price leader, and this position is usually taken by large chain stores that operate on wholesale rates like Wal-Mart. They can’t be beat when it comes to prices, so instead of hoplessly throwing a price out there and praying someone bites, you should instead focus on promoting brand loyalty. small business advertising should never sacrifice pricing, because in the end it’s the value you put into your advertising that builds consumer loyalty and keeps them coming back.
