The Christmas rush is well and truly upon us and everywhere we turn prices are being slashed by business large and small. But could Christmas sales be the beginning of the end for small business owners?
The coming week is expected to be the busiest of the year for retailers large and small. But, there is growing evidence that slashing prices in desperation to attract buyers is a big mistake. For many small business owners it could be the final 'nail in the coffin'.
Cutting prices is a proven way to attract extra customers. But doing so has an inevitable effect profits. Even worse, it often leads to a weak market position, attraction off lower 'quality' customers and demonstrates a distinct lack of understanding of where best to focus in recession Dorset based marketing expert Henry Baker suggest three reasons why Christmas sales can be a big mistake for small business owners. "Firstly, anyone can cut prices. No special skills are required. That means you are instantly putting yourself at risk of your competitors doing the same and instigating a 'price war'." Henry says. "Secondly, what is your differentiation? Endless High Street red 'Sale' posters means you are almost forcing customers to choose where they spend based on price rather than value. That's a 'horrid' place to be." "Thirdly, time and money is much better spent strategically switching your business focus to attract the people affected least and last be recession. A good place to start is to look at the 50,000 odd additional monthly boomers who hold 80% of the country's wealth. That demographic makes purchasing decision based on a whole different set of criteria to the 'bargain hunter.' Who would you rather have as a customer? A price sensitive consumer hit hard by the economic downturn or an affluent boomer who buys based on value and experience and will continue to buy through recession given those two things?" "Price cutting is easy, can give quick cash-flow boosts but is not a good strategy for prospering in recession. It simply cannot be sustained."
Mr.Baker is available for interview, articles and the right speaking engagements and can be contacted on 01929 427744 or via fax on 0208 181 7632.
Mr. Baker has over 10 years of sales and marketing experience with some of the World's leading corporate sales organizations, as an entrepreneur, business owner, real estate investor and internationally respected trainer and educator. He has directly helped over 800 small business owners grow their businesses and tens of thousands more via his business growth tips and secrets.