NFIB

Pricing Incentives for Service Providers
07/ 30/ 2002

Retailers often stimulate sales through price incentives. While small service providers usually can't make a buy-one-get-one-free offer, there are plenty of deals they can use to generate business. Jeffrey Moses explains in today's Workshop.

The most common incentive used by small service-based companies is a free consultation for new customers. Always state the length and monetary value of the free consultation (example: One hour free consultation, a $125 value). At the end of the consultation, customers will know enough about your abilities to consider continuing with your services--at your normal hourly rate.

You could also offer free extras after a certain level of service has been achieved. For example, an Internet Service Provider could offer a free month of service after a year. A typing service could run an ad saying, "Pay for 12 pages, get the 13th free."

An innovative price incentive can attract customers away from your competitors. Simply state in your ad, "For one month only, we're offering half-off to all our competitors' customers." With such an approach, you'll find people calling who are dissatisfied with the services your competitors offer.

Seasonal price incentives can also be highly effective. Gardening services can attract new customers by offering free fertilizing in May, with a six-month service contract. Web site designers can offer twenty percent savings through January and February, which is traditionally a slow time for businesses.

The key to attracting new customers through pricing incentives is to use the incentives as the main thrust of your marketing. Let people know about your offers in all your ads, and they'll respond. And don't overlook the opportunity to create customer loyalty by giving unexpected and unannounced price incentives to existing customers. Occasionally throw in thoughtful extras with purchases or offer an unexpected free service for regular customers.

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