In other cases, entrepreneurs convince consumers they are providing value by actually charging more for their products. "Small businesses need to find niches to survive, and often one of the best ways to survive is to move into higher-end versions of what you have been doing," says Klein. "In the higher-end market, it is easier to compete with large companies, and since people have a 'you get what you pay for' mentality, becoming more expensive and specialized creates an idea of value to your consumers."
In the mid-1990s, when it was struggling to break even, Seghesio Family Vineyards, a wine grower in Healdsburg, California, decided it could convince customers of its wines' value and boost revenues by reducing production and raising prices. Seghesio slashed output by nearly 75 percent, abandoned some of its lower-end wines, and boosted its average price to $20 per bottle. Sales have rebounded, and Seghesio has once again become one of the most popular California producers. Similarly, Sanow notes, one of his clients, a travel agency, gave up its general business and focused on making bookings for a few specific Hollywood production companies. In so doing, it became established as a higher-end company that offered more attention and value to its clients. Of course, while taking their business upscale, entrepreneurs must remember to avoid big chains' core products or services.
|Entrepreneurs at a loss for how to add value to their businesses can draw on a range of resources for ideas and assistance.
Many marketing and branding consultants have Web sites full of free information and advice about competing on value. Some of the best sites include Helios Consultingand business and marketing strategist Arnold Sanow's site. And don't forget Entrepreneur.com.
Consultants are also happy to provide more extensive (paid) advice. Try smaller consulting firms for more reasonable prices. Other potential sources of assistance include Small Business Development Centers and university marketing departments.
Though a range of experts have written books on adding value to your business, very few are readable and useful. Paco Underhill's Why We Buy: The Science of Shopping(Touchstone Books), which gives some suggestions about offering value to consumers, is an exception. Well-reported and lively, it mixes readable prose and useful tips. Other useful books include Al and Laura Reis' The 22 Immutable Laws of Branding(HarperCollins) and Jack Trout's Differentiate or Die(John Wiley & Sons).
Joshua Kurlantzick is a writer in Washington, DC.