Tag Archive for: Small Business

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Pricing Strategy: 5 Signs You’re Not Charging Enough And Why You Should Raise Your Prices

Pricing Strategy: 5 Signs You're Not Charging Enough And Why You Should Raise Your PricesDone Digital

As a small business owner, one of the biggest challenges you face is pricing your products or services. You want to be competitive, but at the same time, you need to make a profit. Having the right pricing strategy can be a delicate balance, and many entrepreneurs end up charging too little for fear of losing customers. However, underpricing can be just as damaging to your business as overpricing.

In this article, we’ll discuss five signs that you’re not charging enough for your products or services and why you should consider raising your prices.

1. You’re Struggling to Make a Profit

If you’re working hard and putting in long hours but still struggling to make a profit, it’s a sign that you’re not charging enough. Your costs and expenses are likely exceeding your revenue, leaving you with little to no profit. Raising your prices can help you increase your profit margin and keep your business sustainable.

2. Your Customers Are Surprised by Your Prices

If your customers are constantly surprised by your prices and commenting on how affordable they are, it’s a sign that you’re not charging enough. While it may seem like a good thing that your prices are lower than your competitors, it can actually be a red flag to customers. They may question the quality of your products or services and wonder why you’re charging so little. Being the cheapest isn’t always a great idea. Rather than offering the lowest prices, try to add more value instead to differentiate yourself from your competition.

3. You’re Attracting Price-Sensitive Customers

If you find that your customers are very price-sensitive and are always looking for discounts or negotiating prices, it’s a sign that you’re not charging enough. Price-sensitive customers are often the hardest to please and may not be the best fit for your business. By raising your prices, you can attract customers who are willing to pay for quality products or services.

4. You’re Struggling to Keep Up with Demand

If you’re struggling to keep up with demand for your products or services, it’s a sign that you’re not charging enough. High demand for your business is a good thing, but it can also be a signal that you’re not charging what your products or services are worth. Raising your prices can help you control demand and ensure that you’re providing quality products or services.

5. You’re Not Keeping Up with Inflation

If you haven’t raised your prices in years and haven’t taken inflation into account, it’s a sign that you’re not charging enough. Inflation causes prices to rise over time, and if you’re not adjusting your prices accordingly, you’re essentially losing money. Raising your prices to keep up with inflation is essential to maintaining your profit margins. Make sure to keep an eye on your competitors and the prices they charge. Then adjust your pricing strategy accordingly.

Pricing Strategy: Frequently updating your pricing to reflect the market is an important part to sustainable business growth.

Why You Should Reconsider Your Pricing Strategy And Frequently Raise Your Prices

We get it. As a small business owner, it can be nerve-wracking to consider raising your prices. You might worry about losing customers, or you might not feel confident in the value you provide. However, it’s important to remember that having the right pricing strategy is vital to keeping your business sustainable and profitable in the long term. Here are a few reasons why you should consider raising your prices every now and again:

Increased Profit Margin

Raising your prices means you can increase your profit margin, which is essential to keeping your business sustainable. A higher profit margin means you’ll have more money to invest in your business, such as improving your products or services, hiring more staff, or expanding your marketing efforts

Improved Perceived Value

Raising your prices can improve the perceived value of your products or services. Customers often associate higher prices with higher quality, and by raising your prices, you can position yourself as a premium provider in your market. This can help attract customers who are willing to pay more for quality products or services.

Better Customer Fit

By raising your prices, you can attract customers who are willing to pay for quality products or services. These customers are often more loyal, less price-sensitive, and more likely to refer others to your business. Raising your prices can help you attract the right type of customer and build long-lasting relationships.

Increased Confidence

Raising your prices can also increase your confidence in your products or services. When you charge what your products or services are worth, it shows that you have confidence in your business and believe in the value you provide. This confidence can be contagious and can help attract more customers to your business.

Better Positioning

Raising your prices can help position you as a leader in your market. By charging more than your competitors, you can differentiate yourself and stand out in a crowded market. This can help you attract customers who are looking for the best products or services in your industry. Charging more also allows you to add more value to your products or services. Try adding something that nobody else is offering.

To bring it all together, charging too little for your products or services can be just as damaging to your business as overpricing. If you’re experiencing any of the five signs we discussed, it’s time to reconsider your pricing strategy. By doing so, you can increase your profit margin, improve your perceived value, attract better customers, increase your confidence, and better position yourself in your market. So don’t be afraid to charge what your products or services are worth – it’s a necessary step to keep your business sustainable and profitable.

Work With Our Team of Brisbane Marketing Experts

At Done Digital, we help small business owners implement an automated marketing strategy that is designed for sustainable long-term growth. Our approach typically involves a combination of website optimisation, SEO, lead capture strategy, email marketing, and content strategy. By automating these processes, we can help you save time, increase efficiency, and generate consistent leads for your business.

We understand that every business is unique, which is why we tailor our strategies to meet your specific needs and goals. To learn more about how we can help your business grow, book a free strategy call with one of our marketing consultants today. We’ll work with you to develop a customised plan that fits your business and drives sustainable long-term growth.

 

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Will You be Using The Power of AI in Your Business and What Happens if Your Don’t?

Will You be Using the Power of AI in Your Business and What Happens if Your Don't? - By David Lee-Schneider, CEO of Done DigitalDone Digital

Written by David Lee-Schneider, CEO of Done Digital

As the world of artificial intelligence (AI) continues to develop at breakneck speed, it’s becoming increasingly clear that small businesses will have to adapt or risk being left behind. Embracing AI is no longer an option but a necessity for staying competitive in today’s fast-paced digital landscape.

While for many business owners, these latest advancements may be scary, for those who are willing to invest time and resources into understanding and implementing AI technologies, an ocean of new opportunities awaits. By incorporating AI-driven tools and strategies into their marketing and operations, small business owners can make data-driven decisions, better understand customer preferences, and create more targeted campaigns, ultimately increasing sales and growing their businesses.

The rise of AI has made it more important than ever for small businesses to prioritise their marketing efforts. By leveraging AI-powered tools, businesses can automate repetitive tasks, freeing up valuable time and resources to focus on more strategic initiatives. Moreover, AI-driven marketing platforms allow for more precise targeting, enabling businesses to reach their ideal audience and maximise return on investment (ROI).

One of the key benefits of AI for small businesses is the ability to analyse large amounts of data quickly and accurately. This allows businesses to uncover patterns and trends that can inform marketing strategies, optimise pricing, and improve customer experiences. By harnessing AI-driven analytics, small businesses can gain insights that were previously reserved for large corporations with access to more resources. Now, businesses of any size can benefit from highly intelligent tools and software.

Another powerful advantage of AI is personalisation. Today’s consumers expect highly personalised experiences, and AI enables small businesses to deliver just that. By analysing user behavior and preferences, AI can help businesses tailor their content and offers to individual customers, resulting in higher engagement and conversion rates.

Of course, adopting AI is not without its challenges. Small businesses need to be proactive in learning about the various AI tools and technologies available, and understanding which ones are best suited for their specific needs. Additionally, small business owners must be prepared to invest in training and upskilling their teams to ensure they are equipped to make the most of these new technologies. The output we get from AI tools is only as good as the input we provide. So, understanding how to effectively use these tools is crucial to successful implementation.

Ultimately, the decision to embrace AI comes down to choice. As Charles Darwin once said,

“It is not the strongest of the species that survives, nor the most intelligent; it is the one most responsive to change.”

Small businesses that choose to adapt and leverage AI will be better positioned for growth, to win customers, and to increase sales, while those that resist change may find themselves struggling to stay afloat in the rapidly evolving digital landscape.

Embracing AI and making marketing a priority will not only help small businesses stay ahead of the game but also enable them to reach new heights. The future is in our hands – let’s choose wisely, and let the power of AI propel our businesses to success.

What are your thoughts on the impact of AI on small businesses? Let me know in the comments below!

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Empowering Entrepreneurs Around the Globe: Done Digital Partners with Kiva to Create Sustainable Change

Done Digital Partners with Kiva to Support Small Businesses GloballyDone Digital

At Done Digital, we believe that business can be a powerful force for positive change in local communities. By supporting small business owners, we have the opportunity to help improve their lives and strengthen their communities. That’s why we’re proud to partner with Kiva, an organisation that provides financial assistance to entrepreneurs in need.

Kiva’s mission is to connect people through lending to alleviate poverty. By providing loans to business owners in developing countries, Kiva helps these entrepreneurs achieve their goals and grow their businesses. Whether it’s purchasing equipment, hiring employees, or expanding to new markets, Kiva’s loans give business owners the resources they need to succeed.

At Done Digital, we’re committed to making a difference in the world. That’s why we’ve pledged to donate 1% of our revenue to Kiva. This pledge is just the beginning. We also encourage our employees to get involved by allowing them to make personal loans to business owners through the organisation. This allows our team to have a direct impact on the lives of entrepreneurs around the world and be a part of their success story.

How Kiva Works

Kiva is unique among charity organisations due to its innovative relending process. This process allows loan funds to be recycled and reused multiple times, allowing our contributions to make a lasting impact. With each repayment of a loan, the funds are available for another small business in need to access, meaning that every dollar we donate can make a difference multiple times.

Done Digital partners with Kiva to make a difference in the world

The fact that Kiva has funded over $1.5 billion in loans is a testament to the effectiveness of this re-lending process, and demonstrates how even small contributions can have a major impact in a sustainable, long-lasting way.

We know that small business owners have the potential to make a big impact in their communities, and by supporting them through Kiva, we’re helping make that a reality. By donating to Kiva, we’re helping to create a better future for local communities around the globe and improving the lives of business owners in need.

 

 

At Done Digital, we believe that supporting small businesses is one of the best ways to make a difference in the world. Our partnership with Kiva is just one way that we’re working to create a brighter future for communities in need. By growing businesses, we are able to create sustainable, lasting change, and we’re proud to be a part of that effort.

Learn more about Done Digital’s 1% Pledge.

Learn more about Kiva.

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3 Simple Metrics With The Power To Transform Your Business (And How To Track Them)

Today, it’s easier than ever to collect vast amounts of data in our business. There are many low-cost POS (point of sale) systems out there with some fantastic reporting features that you can take advantage of to help you grow your business and make better management decisions.

And if you think data and metrics are boring, I want to encourage you to reconsider. Because once we know what to look for, these numbers can become very exciting!

For small business owners, every dollar counts, which is why it’s so important to track our progress and keep an eye on various metrics. Of course, there are countless metrics we can measure, some more important than others depending on the type of business you are operating.

But let’s keep it simple for now with these three metrics that have the power to completely transform your business. If you know you could do better when it comes to numbers, they will provide a great starting point.

Average Transaction Value (ATV)

The average transaction value (ATV) is pretty self-explanatory. It gives you the average of how much your customers spent per transaction on average. Simply by focusing on increasing our ATV, we can change the entire course of our business. 

How to calculate Average Transaction Value

Simply divide your total sales on any given day by the total number of transactions on the same day.

Example:
$5000 turnover / 100 Transactions = $50 ATV

We can increase our ATV through:

  • Upsells (“Would you like to make that a large?”) and
  • Cross-sells (“Would you like a camera bag to protect your new camera?”

No matter what business you’re in, there is always something extra you can offer your customers. Let’s take the above example and assume we trade for 340 days per year. If we increased our ATV by just 5% (i.e. by $2.50), our daily turnover would go from $5000 to $5250.

Doesn’t sound like much, right? Well, by the end of 340 trading days, we would have increased our turnover by $85,000. Not a bad result with a few upsells. 

What upsells, cross-sells and package deals could you offer in your business?

Customer Lifetime Value (CLV)

The Customer Lifetime Value indicates how much the average customer is worth to our business over the course of their patronage. It’s a simple metric with big implications and one that’s often overlooked by small business owners.

Knowing the lifetime value of a customer is a crucial part of understanding how much is reasonable to spend on acquiring a new customer. Measuring CLV is also a good way to determine whether your business is taking full advantage of its customer relationships.

In many, if not most cases, it costs less money to increase revenue from existing customers than it does to acquire new ones. Still, most business owners are more focused on acquisition than retention.

How to calculate Customer Lifetime Value

CLV = Average Transaction Value * Customer Frequency * Average Customer Lifespan

Example:
$50 Average Transaction Value * 1 purchase per month * 12 months average retention = $600 CLV

Your CLV will determine how much we can afford to spend on acquiring a new customer and subsequently, which marketing channels make sense for our business.

How much is a customer worth to you? How much do they spend each time? How often do they visit? And how long do they stay your customer? Improving each of these 3 variables will have a huge impact on your bottom line.

Cost of Customer Acquisition (CAC)

What does it cost you to acquire a new customer? While the importance of knowing the cost of acquiring a new customer is obvious, surprisingly a lot of business owners don’t pay as much attention to this metric as you’d expect them to. Keeping customer acquisition costs top of mind can benefit your business in numerous ways.

For starters, many companies spend more than they estimate on customer acquisition, and in many cases, they continue to invest in marketing channels that make little sense given the lifetime value of their customers.

How to calculate Cost of Customer Acquisition

CAC = Total Ad Spend / Number of New Customers

Example:
$500 Facebook Ad Spend / 50 New Customers = $10

If our Customer Lifetime Value is $600, it makes sense to spend $10 to acquire a new customer. However, if our CLV would only be $20 we might need to look for a new strategy to acquire new customers or first focus on increasing your Average Transaction Value, Purchase Frequency and Retention Rate.

What metrics have you tracked that have helped you grow your business and make better decisions in your marketing?

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7 Reasons Why Your Business Is Going To Fail Within Your First Year

In Australia, more than 60 per cent of small businesses fail and cease operating within the first three years of starting out.[1]

This fact is too often ignored by enthusiastic entrepreneurs who all believe they have what it takes to build a successful business.

When I started my first business at the age of 21, I had all the right reasons for why I would succeed. Well, guess what? I lost thousands of dollars because I was overly confident and naive.

In other words, I didn’t know what I didn’t know.

Looking back, I now know that the main reason I failed was because of a lack of marketing skills at the time. I had a good product that people were actually buying, however, I wasn’t able to reach enough of the right audience to make it profitable.

7 reasons why your business is (probably) going to fail within your first year

In this article, I’m sharing common mistakes in the hope that you can learn from them.

1. You are not testing the market

It’s easy to assume that your product will sell and that everyone is going to love it. All your friends and family are probably telling you how great your idea is. What would they say though, if you asked them to pre-purchase your product and actually hand their cash over? Test it out. If out of 10 people no one buys it, it’s probably a bad idea.

2. Your numbers simply don’t add up

Chances are, the profit margins for your awesome product are just not high enough. Did you really think if you bought these cool t-shirts for $10 and resell them for $20 you made a $10 profit? If you are serious about building a business, here are just a few things to consider: Taxes, accounting & bookkeeping fees, advertising costs, Marketing and promotional budget, rent, utility bills, shipping & returns, plus all the time required to build a profitable business.

3. You give up too early

It’s all exciting when starting out as an entrepreneur. Until you hit a brick wall. There will be many obstacles along the way and sadly most people simply give up as soon as the first challenge arises. It’s all too hard and staying in your job is just too comfortable.

4. You waste your time working on the wrong things

Yeah, no. Your logo and letterhead can wait. Start selling first. If it works you can start worrying about the cosmetics. You don’t need to spend hundreds or thousands on a fancy website either. Keep it simple and prove that your idea works on a small scale before you start going global.

5. You are lacking focus or simply focus on the wrong things

It takes focus to get a new business off the ground. Lots of focus. You need to have a plan of what your business is going to look like in a few months, as well as in a few years from now. Then, break your plan into smaller chunks and focus on staying on track. If you are like most young entrepreneurs you are probably working on the next project, even before you’ve seen any results. Stay focused. Also, instead of focusing on money, focus on adding value to your customers’ lives. If you can add enough value, the sales will come naturally. Steve Jobs, the founder of Apple, was a genius at creating things that people want. The sales were a by-product of Apple’s early success.

6. You don’t have the right toolbox (or no toolbox at all)

If you are a mechanic and want to build a car from scratch, you are going to require some serious tools. You’ll also need to know exactly what tools you require to get the job done. Your toolbox as an entrepreneur might look a little different, but there is no doubt that you will need one. Do your research on what you really need in order to achieve your goals work hard on getting smart.

7. Did someone say goals?

A shiny new product in a pretty box is not a very good goal. After all, you didn’t go into business because you wanted to sell pretty boxes. You went into business to live your passion, make money, and enjoy the freedoms of a successful entrepreneur. Be very specific and clear about what freedom means to you personally. Then work on those things that truly make an impact and help you achieve your goals faster. Read this post about the principle of leverage and how you can use it to grow your business twice as fast by doing half the work.

Why do you think your business will be different? Have you experienced other challenges in your business or seen new businesses fail? What’s the biggest lesson you have learned thus far? Leave me a comment below!

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1. According to the Australian Bureau of Statistics: http://www.abs.gov.au/
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