Some small-business experts are offering advice that may sound counterintuitive in this slowing economy. Now, they argue, may be the perfect time to increase your marketing budget – and even your prices.
Here is the rationale, and some tips, for doing so, if you agree.
Zig when they zag “If your competition is busy nursing their recessionary wounds, then you should become aggressive in marketing yourself and your products,” argues Morebusiness.com, a Web site that describes itself as a “one-stop resource Web site for entrepreneurs.”
By increasing spending when your competitors are cutting back on theirs, you will have a chance to increase market share and be much better positioned to be profitable when the downturn ends.
Higher prices On her blog, smallbusinessboomers.com, Jean Murray, a small-business consultant, discusses the arguments on whether it is a good time to raise prices.
“There are two schools of thought on this one: One, it’s a recession. No one is buying. So in order to get new customers and keep current customers happy, you lower your prices.”
On the other hand, she writes, despite the talk that deflation – a period of declining prices – may occur sometime in the near future, most business are facing rising costs, especially if they purchase commodities. That, she says, gives them “every right to pass along these increases” to their customers.
Given recessionary pressure on one hand, and rising operating expenses on the other, Ms. Murray says she chooses raising prices. “If people see the value in your product or service, they will keep buying.”
Photo by svilen001.