LA Times
IN BOX
By Karen E. Klein, Special to The Times
March 13, 2008
Don’t cut prices to increase sales
Dear Karen: I want to increase sales. Should I cut my prices, given the economy?
Answer: It’s natural for you to consider lowering prices now, but it’s not the wisest choice, said Duncan MacPherson, co-founder of Pareto Systems, a business development firm. “Such an approach can come off as projecting a reactive — and even desperate — vibe to the marketplace,” he said
If you cut prices, prospective clients may focus on cost, not value. “The best way to convince new prospects is to spend more time with the people who are already convinced,” MacPherson said. “Now is a great time to convert your existing clients into referral-generating advocates. Many of your competitors may be neglecting their clients as they attempt to recruit new business, and those clients could be friends of your clients.”
Call the top 20% of your clients and ask how they are doing. “You aren’t trying to sell anything or be the bearer of any profound news, just placing a courtesy call. As the conversation is winding down, remind them that as a value-added service, you make yourself available to answer any questions that their friends or family members might have regarding your type of services,” MacPherson said. “Simply planting the seed gets the concept of referrals embedded in your clients’ minds so that they may respond when the opportunity presents itself, without making you appear needy or putting them on the spot.”