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How to create a marketing plan for your small business - build a brand, target customers and set prices that will maximise sales.

The internet has transformed business marketing. No matter what you do, the internet is likely to be at the heart of your marketing strategy.

Social media is firmly established as a marketing tool. Having a presence opens up new lines of communication with existing and potential customers.

Good advertising puts the right marketing message in front of the right people at the right time, raising awareness of your business.

Customer care is at the heart of all successful companies. It can help you develop customer loyalty and improve relationships with your customers.

Sales bring in the money that enables your business to survive and grow. Your sales strategy will be driven by your sales objectives.

Market research exists to guide your business decisions by giving you insight into your market, competitors, products, marketing and your customers.

Exhibitions and events are valuable for businesses because they allow face-to-face communication and offer opportunities for networking.

How to price your service

Pricing a service can be trickier than pricing a product. Getting it right means valuing your time and expertise and accurately weighing up customer perceptions

There are many reasons why you might want to review your service prices - perhaps you have received an official accreditation, maybe your overheads have increased or you want to fund expansion of your business. Whatever the reason, you'll need to plan carefully before you fix a new price for your offering.

You should start by identifying the benefits your service offers customers and attribute a value to each of those benefits.

Research your market

The next step is to conduct some simple market research. Look online to find out who you are competing with, what they offer and for how much.

If you find your current or projected prices are higher than those charged by your competitors, you risk losing custom to your rivals. This does not mean you should slash your prices, however - set them too low and customers might think your service is inferior.

 

Calculate your costs

Next, you need to understand what it costs to provide your service to customers. Calculate your direct and indirect costs when supplying your services, including labour, training, overheads including stock and supplies and marketing. You will need to decide to what extent these costs should be reflected in your pricing.

There are two basic pricing models to work from: cost-plus pricing, which involves adding a mark-up to your break-even costs; and value-based pricing, which takes into account the value of your service to your customers.

A value-based price reflects what a customer is willing to pay. You can charge more if you have built up loyal custom, offer a higher quality service or are seen as better than your rivals.

Gather feedback on your prices

To get a sense of the value of the service you provide, ask your customers what they are willing to pay and why. Who provides the best service in your area? What do customers expect for their money? How much do they value qualifications and experience?

Get feedback on your own service standards, too, to see how you compare with the market.

The best time to gather feedback on your service is immediately after you've provided it, while it is fresh in peoples' minds. A simple questionnaire works well. You can also carry out simple surveys online. Customers may be more inclined to respond in an honest and open way to an online survey because of the anonymity it offers.

Set a price

Once you have assessed the value of your offer, you can put a price on it. Customers are less likely to tolerate a price rise if it seems to come out of the blue and has no justification.

Consider whether it's worth offering extra value at the time of a price increase, so customers don't like they are being conned. You could also trial price changes to see how they are received.

You should aim to review your pricing every six months. That way you can keep on top of market changes and amend prices to reflect your costs and changes within your marketplace. This will help avoid the need to make sudden, large price hikes because your prices haven't been reviewed for ages - which will be off-putting to customers.

It's also important to have some kind of pricing plan and strategy - your pricing should be consistent with this.

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