GENE SICILIANO: BETTER BUSINESS APPROACHES
MANY BUSINESS OWNERS are pressured to cut
prices when their customers are looking for ways to
reduce their costs. A better solution, however,
would be to creatively reposition your products and
services to give your customers more options. Here
are four suggestions for doing that—without sinking
your gross-profit margins.
Offer less-expensive products. If your customers want to pay less for your products, consider
carrying a lower-cost line that provides the most
desired benefits without the bells and whistles. A
high-end skin-care business did just that, offering a
basic line to spa customers without the more esoteric benefits. It was marketed under the company’s
label, but with a new name that didn’t depreciate
the value of their premier line.
Offer more basic services. Add a slimmed-
down service option to your offerings. For example,
a firm providing a comprehensive restructuring ser-
vice for finance departments could add a more
basic review and written report that includes rec-
ommendations clients can implement themselves.
Use less-costly materials. Whether you build
houses or manufacture consumer products, a close
look at your bill of materials will likely reveal oppor-
tunities to use less-expensive ones without sacrific-
ing the basic desirability or durability of the end
product. When customers want to save money, low-
ering your material and production costs and pass-
ing the savings on to them might salvage some lost
sales with minimal damage to your margins.
Implement performance-based pricing. This
can act as a powerful incentive to your customers.
For example, a sales consultant could charge a
lower flat fee but add a percentage of increased
sales derived from implementing his recommenda-
tions. Or a supplier of components to an original
equipment manufacturer could base some of its
pricing on reduced failure rates or improved perfor-
mance factors. Important note: Don’t consider this
approach for an industry that you don’t know well.
In a difficult economy—or, frankly, any time you
want to strengthen your market position—being
creative in what you offer and how you price it can
pay big dividends. C
Gene Siciliano, CMC,
com), is a financial
consultant, speaker and
author of Finance for
Use your Braın MANY LEADERS believe that they are in charge of
their greatest resource—
their brain. A new book
challenges that assessment.
The Brain Advantage
(Prometheus Books, 2009;
by Costco member Brad
Kolar, Madeleine L. Van
Hecke, Lisa P. Callahan and
Ken A. Paller, shows that “the
more we understand about
how the brain works, the
clearer it becomes that
often our brain kicks in
before we get a chance to
decide for ourselves.”
They assert, for example:
1. The more expert we
become, the less we “think.”
2. Our brains can con us
into being sure we are right,
even when we’re wrong.
3. Our brain decides
whom to trust.
The good news, they say,
is that leaders can use insights from this research to
manage their own brains,
and other people, more
effectively. Insights include:
• Your brain spurs you
to act fast—sometimes too
fast. Leaders who understand this can intentionally
slow down the pace during
• You are not as objective
as you think. If you understand what gets in the way
of objectivity you can compensate and make better
• You and your brain
might not be paying attention to the same things.
Understanding how the
brain chooses what is important helps leaders create better focus for themselves and
their teams. C
CHRIS A RUSNAK
LAST MONTH IN Fresh Views, Lourdes
Martin-Rosa, an adviser to Give Me 5
www.giveme5.com)—a national education program launched by American
Express OPEN and Women Impacting
Public Policy—offered some don’ts for
small businesses looking for public-sector contracts. Here are her do’s.
Do your homework and scope out
the competition. Check out contracting
www.fbo.gov to see
what contracts would be a good fit.
www.usaspending.gov for information on contracts already awarded,
where the money is going, what agency
gave them and other useful information.
Get contract-ready. To register for
government contracts, a business’s federal tax ID
number (also known as an employer identification
number) is needed, along with a Data Universal
Numbering System code, North American Industry
Classification System codes and the details of the
business checking account.
Get necessary classifications. The government
sets contracting goals for doing business with
women-owned, veteran-owned, small and disadvantaged firms, so it pays to get classified as such.
Being identified as a small business means having
an edge in contracting.
“Do”-ing business with Uncle Sam
Build a Central Contractor
Registration (CCR) profile.
FEBRUARY 2010 ;e Costco Connection 11