Optimize your business simply by offering packagesOptimize your business simply by offering packages
As small business owners we often do not spend enough time on how we should be pricing and collecting payments. I have had many conversations with business owners where the time spent on the logo or the colors is an order of magnitude more than on how the services will be priced. While the presentation of your services is important the impact of pricing is far bigger. This is one thing that growing businesses are more deliberately considering.
One often overlooked strategy is offering packages to your customers. Bundling services to offer packages is not a new concept. It is an age-old concept that we’ve seen exist in every industry.
While the presentation of your services is important the impact of pricing is far bigger.
What are packages?
A package is a collection of specific count of a service. For instance, if you have a service 15-minute Solo Dog Walk, you can have a pack of 10 offered at a discounted rate than the individual purchased services.
Why you should consider packages?
There are several reasons that you should consider if this is the right strategy for your business.
- Better Cash Flow - Upfront payment will increase your cash flow. Cash flow is the bloodline of your business. Better cash flow means able to pay your staff on time and keeping them happy. You will be able to put money back to grow your business and not forgo an opportunity due to lack of funds. You will be able to enjoy your work and be less stressed to cover the expenses.
- Demand Forecast – Planning and scheduling your workforce become much simpler with your regular customers. You can utilize your workforce more efficiently and help to keep your business cost low and their morale high. You have better clarity of future demand and can even help you plan marketing or other investments. A better ability to predict means that you can be available to provide service when the client wants them. This means happier clients and who are more willing to pay upfront.
- Increase customer loyalty - Discounted offerings can even upgrade your happy customers to become loyal customers. There’s research on the psychology behind how customers perceive prices. Volume discount pricing by using packages will create customer interest and they will feel like getting a better deal and feel more valued. You will also attract the right kind of the customers who are interested in using the services offered frequently and or regularly. These are valuable customers providing stable revenue flow. We as customers are highly influenced by the perception of the amount we are saving, you should not miss out on this pricing opportunity.
- Efficient payment collection – Selling packages and collecting large transactions have many benefits. You are hitting up the customers for payment less often. This also means you are creating fewer invoices and so it’s more time efficient for you. You will be spending less time chasing your customer for payments if you invoice your customers less frequently. If you use credit card than potentially with single one-time charge you can even shrink your transaction charges. It is win-win for you and your customers.
- Remove chance of withholding payments – When you are collecting payments after delivering the services customers have more leverage on you if they will make the payment. You still have obligations to your staff and vendors. Customers withholding payments leads to wasted time, effort and increases your anxiety.
Managing packages can be cumbersome.
It is obvious that packages have a lot of benefits, so why do very few companies offer packaged services? We enquired around the answer was simple.
If you are not using the right tools to manage packages than there is administrative overhead. We have talked to several pet businesses who were maintaining this information on paper and realized that there was a risk of losing money if the math goes wrong.
This was also taking a lot of time for them to manage the whole process. Their customers were also asking them constantly where they were in the package usage and some were painfully maintaining this process on their end. Reconciling the information, you and your customers have can be a big-time sink. Now imagine, if a customer cancels the service and reschedules it. That will mess up all your math for the future dates.
A lot of the benefits listed above do not look attractive if you are not able to implement an efficient process for managing and tracking packages.
Use a software to track packages
As a business owner you need to be easily able to create packages, track their progress and make any changes that are required. You can use a pet sitting software that makes this process simpler and efficient for you and your customers. Leverage the tools available to unlock the benefits for your business, consider packages.
Written by Jasmine Mann
Founder of DoTimely – Pet Sitting/ Dog Walking Software