NFIB

One Size Doesn't Fit All
04/ 02/ 2002

Has it ever seemed strange to you that a particular brand and style of shoe costs the same no matter what the size? And what about clothing? A size 2 skirt costs the same as a size 14, even though nearly double the cloth is used in the larger size.

People accept this in shoes and clothing, but no one would pay the same for a small pizza as a large, for a single-size mattress compared to a queen or king, or for a small versus a large can of house paint. When it comes to providing a service, however, many small businesses simply charge customers a standard fee, either per hour or for the job as a whole. You can chalk up tremendous customer appreciation, however, and win customer loyalty, when you base your charges on specific customer needs. Jeffrey Moses explains in today's Workshop.

Some customers need a lot of extra care and some hardly need any. When you offer discounts to customers who need less, you'll find them coming back to you again and again. Examples are, among many others:

Distributors who merely drop off products to customers, rather than also stock their shelves, offer to pick up and give credit for unused items or set up displays. Some customers might appreciate being charged less for simple delivery of items, feeling that their own staff can handle set-up more efficiently and less expensively.

Home and business-delivery services. Why charge all customers the same delivery fee when some live 20 miles away and some live around the block? The ones who live 20 miles away will understand the fee, while the ones near you will feel that they received extra value because you didn't charge them.

Services that offer varying types of services. Home-maintenance operations, car mechanics and janitorial services could charge less per hour for customers who have simple tasks, more per hour for complex or "dirtier" tasks. Writers and graphic designers could charge reduced hourly rates for work that is repetitive or requires less expertise, such as typesetting a newsletter in the same format from month to month.

This principle extends to retail. For example: Why can't pizza restaurants that offer pizza-by-the-slice have two sizes, and charge less for the smaller? Not all slices are created equal, after all.

Be a little creative and see how this idea can apply to your business. If it seems appropriate, try reducing prices for specific services or products. You might find that customers appreciate the reductions more than you would suspect.

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