Last year, holiday sales were down 3.4%. This year, even more Americans are dealing with job loss, fear of job loss, wage cuts, a drop in home prices and a rise in credit card interest rates.

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So what will consumers do? What's a retailer to do?

Working twice as hard but not making anymore
Let’s start with retailers. Dropping prices to push out inventory has become the norm since last year. Offering extreme discounts is a tactic many will use to try to get customers in their doors. Here's what that means:

Let’s say you have a product that costs you $10. You normally sell it for $20, leaving you with a $10 profit. You decide to cut your price by 25% to $15.

So now you make $5 every time you sell a product. You have to sell twice as much of this item just to make the same amount of money!

In this example, we used a product sale to keep it simple. However, many small businesses sell a service. So think about it this way:

Carrying forward the numbers above – if you cut your hourly rate by 25% – you would have to work twice as much but you wouldn’t make anymore.

Is it worth it? Would you be better served pursuing another strategy?

Consumers are more price-sensitive, but value is still king
Now, let's look at those customers. Experts cited in the article say consumers will shop for good value on items they want and need. Note the term “value”, not price.

Consumers are more price sensitive than ever. However, because they have been bombarded with super-low prices, they are beginning to think that those products are worthless.

Furthermore, they will pass up an offer – even if the price seems too good to be true – if they think they just don’t need the item. If you cut prices too much, you may kill your business by killing your customer with kindness!

3 strategies for a tight-belt economy:

• Divide your product or service offerings into three categories – must have, need and want. In this economy, focus on the must haves. Which customers must have your must have product? Focus most of your efforts here.

• Is there a way to bundle a “need” with a “must have” or a “want” with a “need”? Offer a special deal on the bundle rather than the individual product or service. You may find that you can sell more without having to work a lot harder.

• Think about your customer’s bottom line. How can you add value to your product or service and boost your customer’s bottom line at the same time?

For example, is there some essential knowledge that you could impart to help your customer use your product or service to save money? If so, they’ll be much more likely to buy – even now.

How are you compelling your customers to buy your products or services?

Share that with us by leaving a comment, e-mailing us at bigginfo@biggsuccess.com or leaving a voice message at 888.455.BIGG (2444).

We think you’re too kind for checking in with us today. Thanks so much!

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There’s a popular celebrity who says it took him 26 years to get one mile down the road. Please join us next time and we’ll fill you in on his story of bigg success. Until then, here’s to your bigg success!

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Engaged employees are more productive. Productive employees help us grow sales faster than costs. Therefore, engaged employees are key to increasing your bottom line.

How’s that for a logic exercise?

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Let’s discuss four words – which all begin with the letter “C” – that will help you engage your employees in ten syllables:

First, a one syllable word: Care
Really and truly care about your employees – not as workers, as people.

Throw the old adage about mixing business and friendship out the door. That’s yesterday’s mindset. For every time it bites you in the butt, there will be many times when it serves you well.

Let your people get to know you. Get to know your people individually, personally and professionally.

We work harder for people we like. We like people who care about us.

So genuinely caring creates a competitive advantage. Isn’t that something? It happens spontaneously, though. It’s not something that can be forced.

Second, a two syllable word: Converse
Talk with your employees. Find out what is going well and what isn’t. Discover what would help them do their jobs better.

We believe in open book management. However we don’t believe that you have to tell all of your employees all the details. Be positively real.

Leaders have more on their plate than ever. Everybody is trying to do more with less. But don’t neglect your people.

Get out from behind your desk a few times a day. Walk around. Spend some time chatting with your people. It’s probably the most productive thing you can do.

Conversation creates concord. Listening is one way to show your people you care. Many people assume the worst. Keeping them informed tames the beast.

Third, a three syllable word: Celebrate!
Our news media thrives on bad news. Do the opposite. Make a bigg deal of good news. Celebrate! Whenever your team does something spectacular, pause and enjoy the moment.

There’s an old management technique called management by exception. Try this instead – manage for exceptional. Highlight people on your team who have done something outstanding.

Share the credit liberally. It’s a rookie mistake to do otherwise. There’s almost nothing you can do to engage your employees that goes as far as a genuine “atta boy” or “atta girl”.

Celebration encourages continuation. It’s fun to play for a winning team. We can’t wait for the next game, for the next opportunity to show what we can do. We look forward to the next victory. So we can celebrate again!

Fourth, a four syllable word: Collaborate
Michael Jordan said it best: “Talent wins games; teamwork wins championships.”

Encourage your people to share their ideas. It will make your life as a leader much easier.

Great leaders make decisions but the best answers often come from their people. Your employees will be more engaged when they see their ideas being adopted. That leads to bigg success!

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Thanks so much for the gift of your time today. Please join us next time when we ask, “Are you a volcano waiting to erupt?” Until then, here’s to your bigg success!

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Cash to a business is like blood to our bodies. It has to continue flowing or we won’t survive. As a small business owner, the bottom line is that you can’t run out of cash. So you have to know how to diagnose and treat the source of the ailment before it spreads. With that in mind, here are ten signs that your business may be heading for trouble:

#1 – Lost market share

Your sales may be growing, but your share of the market may be falling. Are they up because you’ve increased prices? Is the growth of your sales keeping pace with the growth of the markets you serve?

Market share is precious – among other things, it provides leverage to raise prices as your costs increase. As competitors enter your market, you have to work even harder to maintain (and hopefully increase) your share.

#2 – Declining customer counts

Your sales may be holding steady, but fewer and fewer people are making purchases. Your remaining customers are spending more, possibly because of price increases. There’s nothing wrong with that, but you have to find a way to attract new customers because a certain amount of customer attrition is natural.

We don’t want our customers to leave because they’re unhappy. But you can’t make everyone happy all the time so even that will happen. We’ll also have customers move away, pass away, grow out of our product or service, and the like.

#3 – Low repeat and referral business

Many businesses actually lose money to get a customer for the first-time. If they break-even, they’re very happy. It’s the follow-up purchases that make a difference to our bottom line.

A healthy percentage of repeat and referral business also shows that your product or service is still meeting the needs of a core base of people. And these people are the ones who will refer other people to you, which is much less expensive than depending totally on advertising to grow your business.

#4 – Declining sales

Right now, a lot of businesses are experiencing this. It may have nothing to do with you – it may be your industry that is experiencing trouble. So you have to ask yourself … is this a long-term trend or is it cyclical? That’s the first thing you have to determine.

Next, ask yourself, will my industry recover? Some industries were facing challenges even before this recession. It’s only accelerating the long-term trend. Other industries will do just fine coming out of it. You have to know which one applies to you.

Once you’re satisfied that your industry will survive, you have to look at your own business. A lot of shake-out is happening even in healthy industries. Isolate whether it’s a problem with your business or the industry as a whole to know your best strategy.

#5 – Disproportionate sales to a small group of customers

Picture this extreme situation – all of your sales come from one customer. You’re totally at the mercy of that customer. It’s like being an employee without the safeguards that go with employment!

Generally speaking, if more than ten percent of your sales are to one customer, you may face trouble at some point. Five percent is even better. Bigg customers are great. But serving a bigg number of customers leads to bigg success.

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Thank you for reading our post today. Join us next time when we talk about five more early warning signs of trouble ahead in your business. Until then, here’s to your bigg success!

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Take some time for yourself

As we said last time, you will most likely go through a grieving process. Accept it. It’s okay to be a little selfish for a couple of days. Get outside if the weather will permit. Enjoy nature. Go for some walks. Take a drive. Read that book you never had time for. Workout.

Reconnect with yourself. There is really important right now.

Reach out to the right people

Some people have a tendency to broadcast their woes. They think it makes people sympathetic. Unfortunately, it often creates a bad image in the minds of the people who are reading it or hearing it.

But it’s important not to bottle up your feelings. So reach out to a family member, a close friend, or a trusted advisor. Talk with them about your feelings. Go ahead, get it out – vent!

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Sign up for unemployment insurance

This is the one thing to put on your to-do list as soon as possible. It usually takes a couple of weeks for benefits to kick in so the sooner you do this, the better.

You may want to have federal taxes withheld so you don’t get bit at tax time. However, if you know you have the discipline to set the money aside yourself, then you might as well earn a little interest on that money. But if you aren’t absolutely certain, it’s better to just have the money withheld.

The Department of Labor is a great place to get information on unemployment insurance. If you don’t know where your state office is, you can find it there as well.

The right frame of mind

The bottom line is to give yourself a little time to unwind. If your financial situation isn’t dire, you don’t have to begin your search for a new job just yet. It’s more important to get yourself in the right frame of mind.

Next in this series, we’ll discuss getting to work on getting back to work. Thanks so much for reading our post today. Until next time, here’s to your bigg success!

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Direct link to The Bigg Success Show audio file:
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