Small Business Marketing Techniques That Work The Netflix Way

So let’s dig into raising price.  One way to do it without worry is to unbundle items you’ve previously had bundled.

Let’s say you have a current offering that combines two products and the price is $10.  You can unbundle those two products and charge $10 for each if the value can stand on it’s own.  You should support the unbundle with the reason why you’re doing it.

Most people worry about what their customers will think and they also think they’ll lose customers.  But there’s nothing to worry about.

Why?

Because now you’re charging $10 for both items.  You would have to lose 50% of the business who were buying those products to get to where you are now.  Chances are you will lose some but the price increase will ultimately make you more money.

Let’s look at the example of Netflix. They just announced they are unbundling their offering and charging more for each of them. Here’s an excerpt from the Wall Street Journal…

Netflix Inc. boosted by 60% the price of its cheapest movie-rental plan that includes streaming and DVD rentals, triggering an outcry among customers who still use the disc format despite the growing popularity of online movies.

The Los Gatos, Calif., company said it will no longer offer a $9.99-a-month plan that allows members to stream an unlimited number of movies over the Internet and to rent one DVD at a time. In its place, Netflix subscribers will have to pay $15.98 a month for a plan that combines an existing $7.99-a-month streaming-only movie service with a new $7.99-a-month DVD-only rental plan that lets them check out one disc at a time.

Dan Rayburn, an analyst at research firm Frost & Sullivan who follows digital media, said the move “makes no sense,” predicting it will push people like him who pay $9.99 a month for Netflix streaming and DVD services—often leaving a red DVD envelope from the company unopened for months—to switch to the company’s $7.99 streaming-only plan. Mr. Rayburn said customers that make such a switch can rent DVDs from kiosks run by Coinstar Inc.’s Redbox and others for $1 a night when they can’t find a title on Netflix’s streaming service.

 

Subscribers will soon pay $15.98 a month to rent DVDs and stream.

Netflix spokesman Steve Swasey acknowledged some members will be upset over the price increase. He declined to say whether Netflix expects most customers to switch to the streaming-only plan. “We still believe it’s a terrific value,” he said of the new $15.98 plan.

In its blog post, Netflix said the price change was prompted by the continuing popularity of the DVD format among consumers. “Given the long life we think DVDs by mail will have, treating DVDs as a $2 add on to our unlimited streaming plan neither makes great financial sense nor satisfies people who just want DVDs,” it said in the post.

It also has more expensive streaming-and-DVD plans that allow customers to have more than one disc out at a time.

Netflix CEO Reed Hastings has made it clear he sees Netflix’s streaming service as the future of the company. Netflix isn’t even bothering to launch DVD-rental services as it expands its streaming service into new territories outside the U.S., such as Canada and Latin America.

Source: Wall Street Journal

Essentially what they’ve done is unbundled their service. They have just increased the amount they are going to get from their customers by 60%.  I can’t imagine one bit that Netflix didn’t think this through. If they thought they were going to lose more customers than they would gain from the price hike then they wouldn’t be doing it.

I’m certain they will lose some customers but I firmly believe the company will come out ahead in the long run.  Eventually the consumer will forget this happen and gladly pay the price without even thinking about.

For goodness sake, it’s their movies we’re talking about.  They can’t live without their movies, can they.

The same philosophy holds true for your product or service.  Identify areas that you can unbundle in order to effectively raise your price.  Have a reason for it and justify it with a reason why.  Engage your customers often and keep them coming back for more.  You may just notice an increase in profit this year.

Enjoy and prosper,

Jay

PS: Let’s take a look at where you can increase prices.  Get your Profit Leak Audit now.

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It’s the folks on main street that are suffering.  They’re having difficulty growing and don’t have a plan to grow.

Here’s an excerpt from The Wall Street Journal…

Many big public companies are likely to report strong second-quarter profits, but that isn’t the story on Main Street, where small businesses are grappling with jittery customers, rising costs and tight credit.

Small business owners are struggling to get enough loans to grow their businesses or hire people, even as they face rising commodity prices, WSJ’s Sarah Needleman reports. (Photo: AP Photo.)

The owners of many small businesses say economic uncertainty and inflationary pressures have led them to delay hiring and capital expenditures. Seventy percent have no plans to expand their staffs over the next 12 months, according to a recent U.S. Bancorp survey of 1,004 U.S. companies with annual revenue of $10 million or less.

While about half projected higher revenue a year from now, 78% said the U.S. economy is still in a recession, and many expected it to remain there next year. In May, for the third month in a row, the optimism index of the National Federation of Independent Business declined.

Source: The Wall Street Journal

In that article it goes on to describe how some small businesses have been able to get lines of credit to continue operations and maintain inventory but the funds were not enough to expand hiring.

While I can understand this situation I firmly believe that many of these businesses are looking over massive opportunities sitting dormant within their company.  And they don’t have to spend thousands of dollars to leverage them.

They should be able to start directly with their current customers.  Then they can move to past customers who haven’t done business with them in a while. They could even optimize their current marketing to improve their overall ROI.

All these things cost pennies compared to traditional advertising.

Knowing this should put some small business owner’s minds at ease.  You see, they talk about taking it slow and not making big jumps and that’s fine because when they realize that they’re sitting on a gold mine of opportunity inside their own business they will see that increased growth doesn’t have to happen because you’ve invested tens of thousands of dollars into advertising. And as they grow they will in turn have the cash flow and ability to begin hiring again.

My other criticism of this WSJ article is that they offer no solutions.  They only focus on a negative slant, which does grab eyeballs but never gives a viable solution to the problem.  I understand they can’t offer every business one solution in one article but how about talking about the options that are out there.

Stop feeding the negative machine and begin giving hope with an eye to the future for the small business owner’s who are reading this.

Enjoy and prosper,

Jay SImcic

PS: If you’re one of those small business owners who wants to market through this recession without feeling a punch in the gut then you should consider getting a Profit Leak Audit.

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The owner seems nice and has a unique approach toward her products. It also seems she is focused on giving her customers a HUGE experience when they come in. Giving that experience is a big thing and will probably contribute in a huge way to her success. That will be one of the reasons people remember her business.

The only problem that I found is the idea that having a unique idea or store will bring people in. You see, I live in the area and haven’t heard one peep about this store opening. I know my wife would have loved to go check it out. The problem is I just heard about it because I was skimming the local news on Google.

Here’s a small clip that I totally disagree with…

“I think for success in downtown, a retailer has to have a distinct product that doesn’t directly compete with large, big-box retail stores,” Thiel said. “You really want something that is unique and is likely to be seen as a specialty shopping opportunity for someone.”

Source: Journalnow.com

First, I do agree that having a distinct product is important. That is what will set you apart from every other store that commoditizes their products. But the idea that having a unique product will directly correlate to success is ludicrous. That’s because you can have the most unique, perfect, best product out there and if no one knows about you then you won’t sell a single piece.

In this case I would have recommended that this unique store mail post cards, send invitations, and get the buzz going in the local community. I know several people that would have wanted to participate and check out this store that have no clue it’s there.

Marketing is a key component in any business, small and large, that should not be overlooked. It’s important to generate leads, bring in prospects, and get people in your door. Marketing will do that for you.

Will this store fail. I don’t know, I hope not. Winston Salem has a lot of foot traffic during the week due to all the companies in town. But I believe this store could have gotten a lot more buzz and attention for their grand opening.

Learn a lesson from this. Get the word out. Create buzz for your store, product or service. There are tons of ways to do it. Be creative.

Enjoy and prosper,

Jay

PS- If you want to plug the profit leaks in your business (every business has them) then click the link and get your Profit Leak Audit.

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Here are 4 ways to get traffic from twitter…

1. Get Traffic To Your Blog – Simply making one post to twitter about your new blog post isn’t going to cut it.  Grab attention with a good headline.  Make the post on twitter a few times but don’t overdo it.  You want to keep a happy medium and not do a ton of self promotion. 

2. Connect With Your Audience – When you blog, you’re speaking to your target market. You’re holding a conversation with your target market.  Twitter should be no different.  The people who follow you are following for a reason.  They might find you interesting and enjoy your posts.  Don’t blow it.  Keep them involved.  Ask them questions and answer them.

Neither Twitter or Blogs follow the “Build it and they will come” routine.  It’s a social atmosphere.  Treat it that way.  Communicate as if you would at a cocktail party or gathering.

3. Building Your Brand – Twitter is where you can create or ruin a reputation.  Yes you can generate a new account but if you do like many people and use your name or company name you want to be careful on how you’re perceived.  Brand yourself the way you want people to see you.  With twitter you can do it.

4. Target Market Research – Twitter is another great resource out there that allows you to search and find information about your target market.  You can find out what people are asking, what information they want, and how they like it delivered. 

Twitter is not just for an online community.  It’s for offline stores and service based business too.  Twitter is a powerful tool and should be leveraged as such.

Till next time…

Jay Simcic
Profit Convergence, Inc.

P.S.  Get on my e-mail list right away.  There’s going to be some really good stuff coming out.  You’ll get great information for marketing your business online and off.

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What I’ve done is I pulled together a few resources I’ve found that might help you get some ideas for putting a referral system in place for your business.

Here they are…

• Entrepreneur.com – Referral Offers Your Customers Can’t Refuse
  A great product or service and inviting customer experience is essential to building a stead stream of referrals to your business.
• How To Get Referrals
  There’s been thousands of pages written about the topic, but still, no luck. It’s too hard.
• New Business From Old Customers
  Want to boost your business without spending a cent on advertising? Think referrals.

That’s about it for now.

That should get your creative juices flowing on your own referral system.

Remember, don’t be shy.  Get a system in place that works and then work the system.  You’ll begin getting more business and ultimately improve your profits.

Till next time,

Jay Simcic
Profit Convergence, Inc.

P.S.  I’d like to invite you to get on my list.  Very soon I’ll be holding a FREE profit boosting teleseminar and you’ve got to be on my list to get the invitation.  You can sign up on the top right of this page.

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I think 80% of this article was all wrong.

They argued that if your testing your pricing that you should start higher and work your way down.  I disagree with that.

I believe you can provide more reasons why you’re increasing your price than just flat out lowering it. 

You see, when you raise your price you can give a real reason why you’re doing it.  It gives your customer what they need to accept the price change.  You’re building value and trust when you do that.

If you start your prices high and start dropping them you have two problems in play. 

One you could have a problem with previous customers who received their product or service at a higher price and now they want a refund or feel like they were mistreated in some way. 

When you start low and raise prices you won’t have a customer who wants to give you the difference.

Another reason I think going from high to low is a bad idea is because you’re lowing the value of your product or service.  What I’m talking about here excludes special pricing for events and things like that.

What I’m referring to is permanent pricing. 

Consider the impact when you begin testing your prices.  I suggest you start low and go high from there.  You can build value and add reasons where you need to in order to justify large price changes.  It’s better than dropping prices and lowering the value of your goods or services.

Look at the car companies for goodness sake.  Here they are, they’re in a bad place and have had to slash prices substantially.  They have a huge reason to lower prices.  They need to move volume.  In the end it does lower the value of the vehicles they’re selling. 

Think about what it would do to the value of your car for trade in…

You don’t want the same thing for you product or service.

Till next time…

Jay Simcic
Profit Convergence, Inc.

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You probably have a day of the week that is your “slow day”.  The day you dread the most because you don’t know what to do with yourself. 

There are a few ways to fix that almost instantly.

Let’s assume for a moment your slow days are Wednesdays.

First, figure out what your high value, high margin products are.  You know, the one’s that are big sellers. 

Next, contact your current list of customers and let them know that you’re running a special every Wednesday. Offer a great discount on this product with any purchase over a certain amount.

Maybe you offer this highly discounted item with a hair cut or maybe added to an additional product.  There are multiple combinations you can use that could produce a bump in customers coming in. 

Another method you could try is make your slow days some sort of customer appreciation day. I’m sure you speak with your clients while they get their hair done.  You know what they like. 

Maybe you can offer a Starbucks day.  So you give out free Starbucks coffee certificates or cards to any customer who comes in to get their hair done.  You can get these cards from Starbucks and put as much money on them as you like. It doesn’t have to be much and the gesture could make a huge difference.

Staying along the same line of thought you could even offer a give-away for anyone who comes in on Wednesday.  You then collect their names and pick one who wins a decent size prize at the end of the day.  You might have to get creative to make this work but you have many options to generate tons of clients on your slow day.

Like I said in the beginning, having a proper hair salon marketing plan in place could turn your slow day inside out.

Start trying new things and you might start seeing a huge change in profits for your business.

Till next time…

Jay Simcic
Profit Convergence, Inc.

P.S.  If you like this post remember to tweet it and when you’re ready to improve your business give me a call and setup a FREE consultation at 336-775-6606.

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You’ve got a hidden asset staring you square in the face…

Your customers.

That’s right!  Ask them to do business with you again.

You’ve got a list of people who’ve bought from you. Contact them and ask them to do more business with you.

For retail shops that could mean running an event sale.  There are tons of holidays and reasons why you can run a sale.  In fact, here is a great site you can check out to give you some ideas for an everyday holiday.

I’m sure you could think of something that could give your customers a reason why to come out and do business with you.  Just make sure you tie it into what you’re selling and make it appropriate. 

If you sell services, you could find a reason to offer a your services at a discount, or a bundle.  Just come up with something and put a story around it.

Be creative and your customers will love it.

One of your other hidden assets is a referral program.  Do you have one in place now?  If you don’t you should get on it.  The best people to solicit your product or services are the people who have done business with you before.

Make them an offer they can’t refuse.  Run a contest.  Give them real reasons why they should tell everyone they can about your store, your services, or your event.

All it takes is a little thought, some planning, and you could have yourself a truck load of business after setting up a good referral program.

Another area you can focus on that is often overlooked (Hidden Business Asset) are your past customers.  Yes, the people who haven’t done much business with you recently.  Often times they’ve just forgotten about you. 

Make contact with them again, make them an offer to come back, apologize for anything you’ve done wrong and get them back through your door.  These are people that have done business with you that left for one reason or another.  The point is you may have not asked them to buy anything.  This is one great quick way to increase your cash flow.

That sums up the recession marketing strategies for today.  If you look at your customers and evaluate what you could be doing to increase the frequency of sales or the amount of each sale you could be looking at a huge windfall in profits within the month.

Go ahead and find a reason for your customers to come back and do business with you.  It doesn’t matter if you’re selling products online or offline, or if you’re selling a service… these are great ways to increase your cash flow.

Till next time…

Jay Simcic
Profit Convergence, Inc.

P.S.  If you want to get updates about the blog, new videos, and upcoming teleseminars just click the link and fill out the form.  Marketing Strategies

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I have to wonder what they’re doing to improve their marketing during a recession.  I couldn’t figure it out just by reading the short articles but I bet they weren’t doing the unthinkable.

What am I talking about?

Well, what if you went to a competitor of yours.  Someone who is in the same industry but has a slightly different product or service but would compliment what you offer.

What if you took their flyers, marketing information, etc. and put it in the bag as people checked out.  Include their info on your thank you page.  Or just offered the info at the time of purchase about your competitor.

You’re probably thinking I’m crazy.  The point is JV deals are done everyday.  If you can find a competitor that complements what you offer your customers there’s no reason you can’t make some money off of them too. 

Go meet up with your competition, see if you can strike a JV deal, and start making part of their profits too.  You see, they might just do the same for you and you’ll be adding an additional lead stream in place. 

Not to mention a little more cashola!

Till next time,

Jay Simcic
Profit Convergence, Inc.

P.S.  If you want to get some marketing ideas, strategies, and tactics, you should get on my list.  Here’s the link:  www.profitconvergenceinc.com

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Think about the costs associated to marketing to your current customer versus the cost associated to pulling in new customers.

The difference is substantial.

Your current customers are easier and more cost effective to market to because you’ve already created a relationship with them. They’ve bought from you once before at a minimum and unless your product or service is trash they trust you. And that’s one of the biggest reasons it’s more efficient to market to these folks.

So what does that mean…

Does it mean making an offer daily, weekly, or monthly to your customers and never adding an additional value?

Absolutely NOT!

You’ve got to continue building trust with your customers. Communicate with them, give them more of what they want, then every so often make them an offer… something that will compliment their original purchase, something that will fit their goal of doing business with you.

Many businesses focus on new customers and forget about current customers.

The biggest area I can think of that does this are retail shops. Retail shops fail to gather customer information before, during, or after that first purchase. They leave the control 100% up to the customer. There is nothing keeping you on the front of your customers mind, it’s up to them if they want to try something different.

On the other hand, if you collect their information, communicate with them, give them more of what they want, they’ll be more likely to do more business with you in the long run. Especially when you make offers they can’t refuse.

Try collecting your current customers e-mail or physical address and start communicating with them regularly. You might just see a bump in profits because of it.

Till next time…

Jay Simcic
Profit Convergence, Inc.

P.S. When you’re ready to discuss opportunities for your customer retention strategy give me a call at 336-775-6606.

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