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The power to set prices is one of the most influential roles you have a SME manager. It’s explosive! You can maximize your competitive edge and your profit, or you can turn off your customers in a heart-beat. It’s your most powerful business development tool, and it’s back in the news again!
Last month we published, as one of our ‘Clues from the News’, an excerpt from the Commonwealth Bank’s Retail insights report. Now, the National Retail Association (NRA) describes it as a wake-up call for retailers when developing pricing strategies, particularly as the industry heads into the busy Christmas and New Year period.
The report demonstrates that there is no “one-size-fits all approach” when it comes to pricing strategies for retailers.
NRA noted that it’s important for retailers to understand the shopping behaviours of their consumers when they set their pricing strategies. “It is quite clear from the Retail Insights report that different consumers are influenced by different motivations when it comes to factoring in price to their shopping habits,” said NRA CEO Dominique Lamb.
The CommBank report suggests that some shoppers are enticed by price promotions, while other consumers may be turned off by discounted prices due to a belief that higher priced products are of a higher quality.
These results were focussed on the retail sector, but it applies in every kind of business - service businesses like lawyers and accountants, as well as air-conditioning service, blind and shutter installation, and so on.
This is not an ‘easy-ask’ for many small businesses rushing down to Christmas, with a cacophony of customers calling out loud for satisfaction before the holidays.
In a whole range of different industries and markets, the quickest, easiest, way is to take the suppliers’ recommended price ad use that.
When you know that RRP won’t work, you usually know what will, and you can always ‘price-match’ if you have to.
Taking this line is quick, and it does save time. It doesn’t maximize profit though, and isn’t That what you really want?
It is really important that everyone who deals with the retail public considers both the short-term and long-term impacts that a pricing strategy may have on sales, and the way in which consumers view the product, the service, and indeed the whole company.
While all this free advice is flying about, it’s worth noting that it is all general, and for most SME operators, it doesn’t get down to ‘tin-tacks’.
That’s because every case is different. Each case needs to be considered in the confines of its own business environment.
Organisations come in all shapes and sizes, but every company wants to grow. So what sets apart successful companies with high-performance teams from the rest?
The answer? Positive leadership. Strong leadership motivates employees to work towards a common purpose and vision. It builds an organisational culture that everyone wants to be a part of.It creates stronger personal relationships.
By prioritising employees, SMEs actually enable themselves to compete with larger competitors.
Leadership is about uplifting and inspiring others, so it is vital that employees start with the right attitude. After all, attitude affects behaviour, both on a personal and interpersonal level, so the attitude of one person can ripple through to the entire company.
Employees also need to understand what is expected of them when working in teams, which puts them in a better position to make decisions both individually and collectively. This doesn’t mean that employees undertake a personality makeover, but rather they must find the best way for a diverse team to collaborate in order to yield the best results for their company.
Most SME companies naturally focus on the mechanics of their company. This includes managing technical skills and fixating solely on operational aspects of a company. However, the dynamics are equally important.
They have a direct and positive impact on creating high performing teams. This entails building strong professional relationships, building mutual trust, and agreeing on expected behaviours.
By fine-tuning the dynamics of high-performance teams, you create a safe environment for candid communication, which boosts productivity by removing the possibility of bottled resentment. Creating a safe environment for frank opinions to be shared can only be achieved through putting just as much emphasis on relationships.
For example, a Priceline Pharmacy franchise business owner witnessed a 20 per cent average increase in mystery shopper scores, and cost savings of 10 per cent from staffing and roster efficiencies due to higher productivity levels. These positive changes solely derived from improving team communication and setting clearer work expectations.
A high-performance culture is a powerful source of competitive advantage that drives smaller businesses into sustainable, successful larger ones. This starts with a strong emphasis on shaping up a resilient team, creating your own organisational culture, building a foundation of trust, and celebrating team diversity to allow for creative problem-solving. With a well-knitted team striving towards the same goal, an SME can be ready to face the toughest of challenges.
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Any advice, information or comment contained in this document is general in nature, and should not be relied on as the basis for any specific commercial, business, employment, or financial decision. Specific advice should always be obtained for each individual circumstance. Accordingly any advice, information or comment contained herein is for general guidance only.
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