START A T-SHIRT BUSINESS CHAPTER 4

HOW TO START A T-SHIRT BUSINESS-SMALL BUSINESS MARKETING BIBLE

Starting a t-shirt is not as hard as it seems. Certain things need to be taken into consideration before you start a t-shirt business. One must also realize that a t-shirt business is like any other business and adequate planning must be done in order to be successful. Things that must be taken into account are what type of printing method to use. Available methods include screen printing, DTG( direct to garment) t-shirt printing method, heat transfer t-shirt printing method, Plastisol t-shirt printing. One must also consider the available cash on hand, or if one can obtain credit, and how much. Then one will have to consider your competitors. Another suggestion in t-shirt business is for one to carve out a niche. By this I mean picking a particular aspect of t-shirt business and build it up. There are various options such as biker t-shirts, funny t-shirts, political t-shirts such as Obama t-shirts, Christian and religious t-shirts and more. The next step is business planning, determine how you will sell your t-shirts, where you will buy your blank t-shirts from as well as other supplies.

I have outlined a few steps that will be helpful in guiding you through starting your business on the right foot such as

How to right a business plan
Small business marketing bible
Small business start-up kit
Business blogging tool set
Ten commandments of small business
TABLE OF CONTENTS
Introduction
Chapter 1 — Your Seven-Step One-Day Marketing Plan 11
Chapter 2 — The Lifetime Value of Your Customer 17
Chapter 3 — Differentiate or Die: Your Unique Selling Proposition 20
Chapter 4 — The Five-Step Formula To Creating Your Marketing Message 24
Chapter 5 — How to Make it Rain Referrals 29
Chapter 6 — Tapping Into Your Most Valuable Small Business Asset…Your
Current Customers 39
Chapter 7 — Joint Ventures: Using Other People’s Customers to Get New
Business 47
Chapter 8 — What Business Are You In? 54
Chapter 9 — How Free Giveaways Can Boost Your Small Business Revenues 58
Chapter 10 — Guarantee Marketing: How to Turn Your Guarantee Into A
Competitive Weapon 63
Chapter 11 — Niche Marketing: Expand Your Customer Base By Narrowing Your
Marketing Focus 74
Chapter 12 — Using Consumer Research To Develop Powerful Small Business
Marketing Strategies 92
Chapter 13 — 13 Elements Of A Winning Small Business Advertisement 97
Chapter 14 — 12-Step Foolproof Sales Letter Template 103
Chapter 15 — Telephone Success Strategies for Small Businesses 112
Chapter 16 — How to Price Your Product or Service for Maximum Profit 117
Chapter 17 — How To Use the Power of Packaging to Double Your Sales 132
Chapter 18 — Membership Marketing: Turning Occasional Buyers Into
Loyal Customers 139
Chapter 19 — Street Marketing for Small Businesses 145
Chapter 20 — Using Customer Testimonials in Your Marketing Message to
Break Down Fear and Skepticism 151
Chapter 21 — The Key To Guaranteed Repeat Sales 158
Chapter 22 — Lead Generation: How to Flood Your Small Business With
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Hot Qualified Prospects 165
Chapter 23 — Charity Marketing: Growing Your Business Through
Charitable Giving 172
Chapter 24 — Bumps, Up-sells, Cross-sells, and Down-sells 177
Chapter 25 — How to Create an Offer that Your Prospects Can’t Resist 183
Chapter 26 — How to Radically Reduce Refunds and Returns 194
Chapter 27 — Internet Marketing Strategies for Local Small Businesses 201
Chapter 28 — 16 Small Business Website Mistakes (and how to fix them) 205
Chapter 29 — How to Start Your Own Online Newsletter 229
Chapter 30 — Measure Your Marketing Efforts 251
Special Report # 1 — How to Make Yellow Pages Ads Work for Your
Small Business! 255
Special Report # 2 — Secrets to Direct Mail Success for Small Businesses 272
Special Report # 3 — How to Get Free Publicity for Your Small Business 297
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Introduction
The small business world is evolving. Competition, the emergence of the Internet, and
mergers and acquisitions (not to mention the recession) have forced small businesses to
rethink their marketing strategies.
Competition Is For Real… Are You Ready?
With the recession, small businesses are finding it harder and harder to compete. Many
small business owners are asking themselves, “How do I ‘recession-proof” my business?”
The answer is: Make marketing your first priority!
Is customer service important? Absolutely. Are keeping your finances important?
Absolutely. Is developing your employee important? Absolutely. All those processes are
very important, but during a recession NONE are more important than your marketing
efforts.
Marketing is what drives your business. During a recession, it will mean the difference
between going out of business or weathering the storm and being a super success. Your
best business years could be during this recession!
It’s during the difficult times that you learn how to stretch your marketing dollar, to make
the most of your marketing investment. It’s during times like these that you learn new
and innovative marketing techniques that help your business thrive.
In “The Small Business Marketing Bible,” you will learn new and different techniques to
market your business that will make it immune to economic fluctuations and will increase
your top and bottom line no matter what the economy is doing.
You Must Hunt Down and Capture Your Prospects
I truly believe there will be fewer and fewer consumers that are out there just waiting to
buy. You will need to learn how to search out those prospects that may want to buy and
convince them that they need to buy — today. To do this you will need to discover new
and different ways to do prospecting and marketing.
Flashing ads with the words “sale, sale, sale” all over them won’t work. All these types of
ads do is skim the cream-of-the-crop prospects. (i.e. Those prospects who are ready to
buy today.) However, during the recession you will have to employ stealth marketing
techniques that will quietly hunt down and capture those prospects who are secretly
waiting to buy, but are too concerned about other things to make a move.
The only way to survive and thrive during competitive times is to re-focus your attention
on marketing. It’s time to tune up your marketing — to make sure you’re getting new
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customers in, inactive customers coming back, and your active customers purchasing
more.
It’s Time to Re-Double Your Marketing Efforts and Make
Them Your First Priority
Now is not the time to pull back on your marketing efforts but to re-double your efforts
and your commitment to be the smartest and savviest marketer in the your industry. I
honestly believe that marketing is what drives successful businesses. Good marketing can
overcome a multitude of business sins. They don’t excuse the business sins but they can
make up for them.
I have spent many years consulting in different areas of business, in both Fortune 500
companies and in small businesses. I’ve “reengineered” finance departments, logistics
and supply chain systems, human resources functions, and even product development
areas. As successful as those consulting engagements were, none had as much impact on
the business then when I helped companies re-focus their efforts on marketing.
This is exactly why I left the world of big company consulting and turned my attention to
helping small businesses thrive using common sense marketing techniques.
Establish Effective Marketing Systems and Put Your
Small Business On Autopilot
A few of the marketing techniques I introduce to you in this manual will be completely
new and somewhat unusual. But they work. They are proven. You may already be
practicing some of these techniques but haven’t figured out how to fully implement them
so that they become a “system.”
I like “systems.” Systems are reliable and predictable. You can “turn on” an effective
system and know what the results will be the next day. If they are done right they allow
you to put your marketing efforts on autopilot and move on to implementing the next
marketing strategy.
Effective marketing systems also allow you to leverage the assets that you already have.
These assets can very well be the knowledge that you have stored in your brain but aren’t
taking advantage of because you don’t know how. You will understand this more when
you read the sections on “Education-Based Marketing” or “Guaranteed Marketing.”
Putting these marketing techniques to work for you will put you head and shoulders
above your competitors. Why? Because very few (if any) small business owners know
the dynamic marketing techniques I’m about to show you — ideas that can literally
double your current business within six months and have customers practically line up
and beg to buy from you.
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Four Growth Areas — The Key To Your Ultimate
Marketing Plan
The secret lies in learning how to grow your business effectively. There are several
strategies you can use to grow your business, but they all fall under four general
categories.
1. Attract more new customers.
2. Increase the average sales amount.
3. Make your customers buy from you more often.
4. Hold on to your customers for life.
Every technique that I will talk about in this manual will fall under one or more of these
growth categories.
I believe small businesses focus too much of their efforts on number 1 and number 4.
You may disagree with me, but if a small business is receiving 40% of its new business
from referrals, it may be an indication that they are not spending enough time on
attracting new customers from the marketplace.
Don’t get me wrong. Referrals are the best kind of customers. But if you spend the
majority of your time and money trying to get them you may be neglecting a whole slew
of new customers that are waiting to buy from you.
In the same vein, if a small business spends all its time marketing to new customers and
ignoring existing customers, you may be missing out on a lot of low-hanging fruit.
As I mentioned, there are many ways to leverage your marketing efforts in these four
categories. Here are just a few ways to improve each of your areas of growth:
Attract more new customers…
• Select a niche market that you can easily contact and dominate it.
• Develop an Education-Based Marketing program that compels your prospects to
contact you to learn more about how you can help them.
• Establish a proactive referral program with centers of influence that can open new
channels of growth for you and your business.
Increase the average sales amount…
• Up-sell your customers to high quality products and services.
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• Suggest accessories and add-on items and services that compliment your
customer’s purchase.
• Combine several items into a package that would cost less if sold separately.
Make your customers buy from you more often…
• Establish ongoing communications that present compelling offers that can’t be
turned down.
• Follow up with your customers to see how they’re enjoying the benefits of the
new product or service you sold them, and suggest products or services that would
increase their satisfaction.
• Track your customer’s usage and buying patterns to suggest purchases right
before they actually need them (this also helps keep the competition away).
Hold on to your customers for life…
• Deliver uncommon customer service by going the extra mile.
• Give your customers the opportunity to “go on record” by giving you testimonials
about your great customer service.
• Perform stealth surveys with your customers from time to time to gauge their
level of satisfaction.
Your goal is to design systems and programs that surround these four categories of
growth strategies. In this manual I will give you specific marketing techniques for each of
these areas to grow your small business.
After reading and studying this manual you will have the weapons you need to create the
ultimate small business marketing plan that will help you flourish during any down
economy.
You May Have to Completely Re-Think Your Marketing
Strategy
As you read, think about how each strategy or method could be applied to your small
business. Throw away your ego and ponder how you can customize these powerful
tactics to fit into your current business model. While you’re reading this manual, have a
notepad handy to take notes and write down To-Do’s.
Perhaps you will have to step back and take a whole new look at how you’re marketing
today. After reading this manual you may want to re-evaluate your entire marketing plan.
Some of these ideas may be so new to you that it will compel you to re-examine your goto-
market strategy.
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Don’t believe for one second that many of these techniques are obvious to everyone —
they’re not. Only a very few know and understand them. As one of those few, you’ll not
only learn how to make your small business stay alive and thrive, but you’ll learn how to
dominate your marketplace. That’s what you want isn’t it?
Then dive right into “The Small Business Marketing Bible.”
Your Seven-Step One-Day Marketing
Plan
In my small business consulting experience, I have noticed a similar attribute that is
common in most entrepreneurs and business owners. Most are “doers”, not “planners.”
In reality, being a doer is perhaps the ultimate mark of a successful person. It’s what
makes entrepreneurs a rare breed. Rather than thinking or wishing, they get out there and
make something happen.
But I have encountered many small business owners who get into trouble “doing” the
wrong marketing activities the right way or “doing” the right marketing activities the
wrong way. If you want to “do” the right marketing activities the right way you must start
with a marketing plan.
You don’t have to kill a tree to create an effective marketing plan. In fact, you can create
a successful plan for your small business in just one day. To begin, don’t worry about
writing style or making your plan fancy. Just go get a pencil and paper and let’s get
started.
Step 1 — Understand Your Market and Competition
A big mistake that many small business owners make is to latch on to a cool product or
service without first understanding the market and what it wants (not what it needs). If
you try to sell something that people don’t want, they won’t buy it.
It’s that simple.
A profitable market consists of people who have dire wants that are being unmet, so
much so that they will jump to buy your solution (product or service). A profitable
market can be compared to a lake with thousands of starving fish. All you need to do is
throw in the bait and it turns into a feeding frenzy.
To get an understanding of your market you should ask yourself questions like:
• Are there segments in my market that are being underserved?
• Are the segments of my market for my product or service big enough to make
money?
• How much of a share of that market do I need to capture, to just break even?
• Is there too much competition in the segment of my market to be competitive?
• What are the weaknesses in my competition’s offering that I can capitalize on?
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• Does my market want or value my unique competitive offering?
Step 2 — Understand Your Customer
Knowing your customer intimately is the first step to easy sales. Until you know (1) who
your customers are, (2) what they want, and (3) what motivates them to buy, you can’t
prepare an effective marketing plan.
** Sidebar **
Don’t confuse “wants” with “needs.” People don’t necessarily buy what they need, but
they’ll most always buy what they want. For instance, have you ever known someone that
went to the store to buy a pair of pants that they needed and came back with a new shirt,
sweater, and shoes? Or how about the everyday shopper who goes into the supermarket
to buy some milk and eggs, and comes out with a frozen pizza, cheesecake, and other
goodies?
People will buy what they want (even if they don’t have the money!), not what they need.
And yes, this even applies to those “sophisticated” corporate honchos (I should know. I
used to be one.).
** Sidebar End **
To really get to know your customers you’ll need to ask yourself questions such as:
• How does my potential customer normally buy similar products? (e.g. in a store,
on the Web, door-to-door)
• Who is the primary buyer and the primary buying influencer in the purchasing
process? (e.g. husband or wife, purchasing agent, project leader, secretary)
• What kind of habits does my customer have? For instance, where do they get their
information? (e.g. television, newspapers, magazines)
• What are my target customer’s primary motivations for buying? (e.g. looking
good, avoiding pain, getting rich, being healthy, being popular, etc.)
Step 3 — Pick a Niche
If you say that your target customer is “everybody” then nobody will be your customer.
The marketplace is jam-packed with competition. You’ll have more success jumping up
and down in a small puddle than a big ocean.
Carve out a specific niche and dominate that niche; then you might consider moving on
to a second niche (but not before you’ve dominated the first one!).
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You could be a “lawyer that specializes in child accident liability” or a “CPA for used car
dealers” or a “dry cleaner for the Heritage Park subdivision in West Oaks, CA.” You get
the picture. Make sure to choose a niche that interests you and that is easy to contact. I
can’t stress this point enough.
There’s nothing more destructive than to pick a niche that you can’t communicate with or
that costs you a ton of money to contact.
Step 4 — Develop Your Marketing Message
Your marketing message not only tells your prospect what you do, but persuades them to
become your customer. You should develop two types of marketing messages. Your first
marketing message should be short and to the point. Some may call this your elevator
speech or your audio logo. It’s your response to someone who asks you, “So, what do
you do?”
The second type is your complete marketing message that will be included in all your
marketing materials and promotions. To make your marketing message compelling and
persuasive it should include the following elements:
• An explanation of your target prospect’s problem.
• Proof that the problem is so important that it should be solved now, without delay.
• An explanation about why you are the only person / business that can solve your
prospects problem.
• An explanation of the benefits people will receive from using your solution.
• Examples and testimonials from customers you have helped with similar
problems.
• An explanation about prices, fees, and payment terms.
• Your unconditional guarantee.
Step 5 — Determine Your Marketing Medium(s)
Remember, when I said that it’s critical to choose a niche that you can easily contact?
When you go to choose your marketing medium(s) you’ll understand why that was sound
advice.
Your marketing medium is the communication vehicle you use to deliver your marketing
message. It’s important to choose a marketing medium that gives you the highest return
on your marketing dollar (ROMD). This means that you want to choose the medium that
delivers your marketing message to the most niche prospects at the lowest possible cost.
The following is a smattering of tools you have at your disposal to get your message out:
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• Newspaper ads
• Posters
• Contests
• Card decks
• Seminars
• Television ads
• Signs
• Sweepstakes
• Door-to-door
• Teleclasses
• Radio ads
• Banners
• Trade shows
• Yellow Pages
• Articles
• Classified ads
• Newsletter
• Charity events
• Networking
• Infomercials
• Billboards
• Take-one box
• Telemarketing
• Magazine ads
• Special events
• Sales letters
• Flyers
• Email
• Movie ads
• Ezine ads
• Postcards
• Door hangers
• Agents
• Media releases
• Fax broadcasts
• Brochures
• Gift certificates
• Word-of-mouth
• Website
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• Sign picketing
• Business cards
• Catalogs
• Air Blimps
• Public speaking
• Window display
The trick is to match your message to your market using the right medium. It would do
you no good to advertise your retirement community using a fast paced, loud radio spot
on a hip-hop radio station. This is a complete mismatch of the market, message, and
medium.
Success will come when there is a good match of these three elements.
Step 6 — Set Sales and Marketing Goals
Goals are critical to your success. A “wish” is a goal that hasn’t been written down. If
you haven’t written your goals, you’re still just wishing for success. When creating your
goals use the SMART formula. Ensure that your goals are, (1) Sensible, (2) Measurable,
(3) Achievable, (4) Realistic, and (5) Time-specific.
Your goals should include financial elements, such as annual sales revenue, gross profit,
sales per salesperson, and so on. However, they should also include non-financial
elements such as units sold, contracts signed, clients acquired, and articles published.
Once you’ve set your goals, implement processes to internalize them with all team
members, such as reviewing them in sales meetings, displaying thermometer posters, and
awarding achievement prizes.
Step 7 — Develop Your Marketing Budget
Your marketing budget can be developed several ways, depending on whether you want
to be more exact or to develop just a quick-and-dirty number. It’s good to start out with a
quick-and-dirty calculation and then to support it with further details.
First, if you have been in business for over a year and tracked your marketing-related
expenditures, you could easily calculate your “cost to acquire one customer” or “cost to
sell one product” by dividing your annual sales and marketing costs by the number of
units sold (or customers acquired).
The next step is to take your cost to sell one unit or acquire one customer and simply
multiply it by your unit sales or customer acquisition goal. The result of this simple
computation will give you a rough estimate of what you need to invest to meet your sales
goals for the next year.
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Conclusion
There you have it: The Seven-Step, One-Day Marketing Plan. It’s simple really. Of
course you’ll need to study up a bit more about your marketing medium(s) of choice, its
appropriateness for your message, and its associated costs. But try not to make the
development of your plan a laborious, drawn-out task. Remember the 80 / 20 rule: 80%
of your results will come from 20% of your effort.
My final word of advice is to make sure you set aside uninterrupted time to develop your
marketing plan. It could very well be the most important document to which you and
your team members will ever refer.
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The Lifetime Value of Your Customer
Knowing the lifetime value of a customer is the first step in creating your marketing
budget. Lifetime customer value has two components: (1) new customer acquisition cost
and (2) lifetime revenue generated by a new customer. To properly develop your
marketing budget you absolutely have to know these two figures.
For many small businesses these figures are a mystery, yet they are the key ingredients to
making decisions concerning marketing expenditures. Questions such as, “What should I
give away as a free bonus?” or “How much should I spend on ads for the last quarter?”
are answered based on the understanding of the lifetime value of a customer.
How to Calculate New Customer Acquisition Costs
To calculate new customer acquisitions costs, first research what total marketing costs
were for the previous year. Next, count how many new customers you did business with
last year. Finally, divide your marketing costs by the number of new customers to
determine your cost per customer.
Of course, this is not entirely accurate, but it’s a pretty good guideline. Many of your
customers came as a result of word-of-mouth or referrals. Perhaps some of your old
customers purchased your product or service from you as well. These things can
incorrectly inflate the cost per new customer.
Let’s do a hypothetical calculation for a new customer acquisition cost for a hot tub
dealer. We’ll assume that we sold $1,000,000 worth of spas and our marketing expense
was 5% of revenue.
New Customer Acquisition Cost
Total marketing cost from previous year $50,000
Number of spas sold 166
Average cost of new customer acquisition $301
You’ve Got to Start Somewhere
Although your new customer acquisition cost may not be entirely correct, at least it’s a
start. By the way, you should start to collect some important information from your
customers at the time of the sales. For example, you should be tracking how your
customers came to you and what motivated them to buy from you.
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Calculating the Lifetime Revenue of a Customer
Now that you have a yardstick to use for your new customer acquisition costs, you need
to look at your “lifetime revenue of a customer.” Before we do that though, you need to
answer some basic questions about your business. Supposing you own a hot tub
dealership, these are the questions you should ask yourself:
• How much is the average hot tub sale?
• What is the average chemicals sale?
• How often does a customer make a chemical purchase?
• What is the average spa cover sale?
• How often is the average spa cover sale made over the life of a hot tub?
• What is the average parts sale over the life of a spa?
• How often does a customer make a parts purchase over the life of the spa?
• On the average, how many referrals does one of your customers make that results
in a sale?
So let’s do a hypothetical calculation with the answers to these questions. To be
conservative, this calculation is based on the assumption that a family will only purchase
one spa from you throughout your relationship and that spa lasts for seven years.
Lifetime Revenue / Gross Margin Calculation
Average hot tub sale $5,000
Total chemical sales (avg. $15/month) $1,260
Total spa cover sales ($160 every 3-5 years) $320
Average parts sale over the life of the spa $300
Sub-Total $6,880
Word-of-mouth referral 1 referral for every one customer
Total Lifetime Revenues $13,760
Average Gross Margin 30%
Lifetime Gross Margin $4,128
In our hypothetical examples the cost of a new customer acquisition is around $300 and
the lifetime gross margin of a customer is $4,128.
Now ask yourself how much are you willing to invest, per customer, to grow your
business. If you are grossing $4,128 per customer would you be willing to spend more
than $300 to acquire a new customer?
I hope so!
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Don’t Skimp When It Comes to Investing Your Marketing
Dollars
Time and time again I see most small business owners, in general, under-invest in
marketing. Why? Because, invariably they don’t understand the lifetime value of a
customer!
This is a big mistake that many owners make. I understand that the percentage of
marketing dollars spent varies from industry to industry; however, did you know that the
majority of best practice small businesses invest up to 10% or more of the total revenue
on marketing?
These are the most successful small businesses. Why? Because they have taken the time
to compute the lifetime value of their customers and realize that its one of the best
investments they can make with their money.
A Customer Service Breakthrough
Determining the lifetime value of a customer for the first time usually shocks many small
business owners. If the value of one customer is so high, do you think this would change
how you treat each customer?
Would you be willing to go the extra mile to make that customer happy? I suggest you
put the lifetime value of a customer figure on your wall for you and your employees to
see. Let it be a constant reminder of how important each and every customer is to your
business.
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Differentiate or Die: Your Unique
Selling Proposition
Avis Rent a Car “We’re number two. We try harder.”
Federal Express “When it absolutely, positively has to be there.”
Domino’s Pizza “Fresh, hot pizza in 30 minutes or less”
What do all three of these slogans have in common? They are powerful statements of
uniqueness that helped to propel their respective companies to success.
Avis Car Rental knew that Hertz, the number one car rental company, was so much
bigger than them that they couldn’t compete head on so they positioned themselves as the
number two car company that worked harder for the customer.
Federal Express based their slogan on a promise of delivery reliability. Domino’s based
their slogan on the fact that most pizza eaters don’t care how much stuff is on their pizza,
but that it is hot, fresh, and delivered quickly.
Your Unique Selling Proposition
Each of these slogans is their respective company’s unique selling proposition (USP). A
USP is something that differentiates you from all your competitors both local and
industry-wide. It’s what makes you so unique that people will choose to do business with
you over any of your competitors. Your USP states your distinct advantage.
One of the deadliest mistakes small businesses make is not being unique. Now more than
ever you must differentiate your small business. Today there is an explosion of choices
for consumers. During slow times, the same number of small businesses will be vying for
a diminishing number of prospects. When this happens the competitive landscape gets
tougher and choices for consumers get more difficult.
If you want to survive during the slow economy you must differentiate yourself in the
eyes of your prospect. Your USP is what states to the world why you are different.
*Factoid*: The origin of USP comes from a man named Rosser Reeves who was
considered the “high priest of hard sell.” He was an advertising agency chairman back in
the 60’s. He wrote a book titled, “Reality in Advertising” that became very popular. It
was translated into 28 languages. He introduced and defined the concept called Unique
Selling Proposition.
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Why is Your USP so Important
To be successful in small business you don’t have to be the best, you just have to be
unique. Identifying, developing, and incorporating your USP into everything you do is
challenging. But the reward is worth every effort. It will differentiate you, distinguish
you, and give you advantage over everyone in your marketplace.
“Me too” businesses rarely survive. They usually end up in price wars because they don’t
have anything unique about them to establish value in the minds of their prospects. They
are left with only one weapon with which to compete — price. And unless you have a
significant cost advantage over your other small business competitors, you will lose.
Make Your USP Crystal Clear
The more clearly you announce your USP, the more often customers will choose you
over your competition. You must use your USP to dominate your local market. When a
consumer thinks of your product or service, your name must be the first one that pops
into her mind.
Your USP must create a real and perceived advantage in your prospect’s mind. For
example, Domino’s made a very bold guarantee that if they didn’t deliver your pizza
within 30 minutes of ordering, it would be free of charge. Domino’s put their USP into
action.
Be Specific
How many small businesses do you hear saying, “The Best Selection in Town” or
“Service with a Smile.” I have to tell you that these phrases are worn-out, tired renditions
of a “me too” business. Be specific with your USP. When Domino’s stated that your
pizza would be, (1) fresh, (2) hot, and (3) delivered within 30 minutes, it was specific and
measurable. “Buy it today and install it tonight” — that’s specific and measurable.
How to Identify and Develop Your USP
You shouldn’t rush or hurry the decision of your USP. You will spend thousands of
dollars on advertising and promoting your USP. Once you’ve made your impression and
then decide to change it, you begin to confuse your prospects, and it will cost you even
more money to re-implement a different USP.
If your USP is a promise or guarantee, you must make sure that you can fulfill your USP
promise. Domino’s had a very bold USP. To get a pizza to anyone’s house in Domino’s
marketplace within 30 minutes was sometimes a difficult feat to consistently accomplish.
But the rewards were fantastic.
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How do you pick a USP? You need to first identify which needs are going unfulfilled
within either your industry or your local market. These are called “performance gaps.”
Many businesses that base their USP on industry performance gaps are successful.
Here are some examples in different small business industries:
Example #1 — Auto Repair Industry
Performance Gap (problem) = Auto repair establishments have a reputation of being
dishonest.
Potential USP (solution) = “If It Ain’t Broke, We Won’t Fix It!”
Example #2 — Dental Industry
Performance Gap (problem) = No one likes to go to the dentist because its such a
painful experience.
Potential USP (solution) = “Sedation Dentistry: The Safe, Pain-Free Way to Healthy
Teeth”
Example #3 — Real Estate Industry
Performance Gap (problem) = People are wary of letting real estate agents sell their
homes because they don’t believe the agents will aggressively try to sell them fast
enough.
Potential USP (solution) = “Our 20-Point Power Marketing Plan Gets Your House Sold
in 30 Days or Less”
You can see how a performance gap can lead to a powerful USP. You can also have local
performance gaps that will give you a great USP as well. For instance, if you are an
electronics outlet and you have more inventory than anyone else in town you might your
USP could be,
“We Have 10 Times the Selection of Any Other Electronics Store In Town. Go Visit the
Rest, Then Come Shop at the Best.”
Your USP Doesn’t Have to be Unique
Although a USP is a statement of your uniqueness it doesn’t always have to be something
that is only unique to you… if you proclaim it first!
For instance, if you were a furniture retailer, you could proclaim your USP to be “Buy
today, we’ll deliver it tonight.” Most other competitors can do that too, but because you
were the first to proclaim it, it is yours exclusively.
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This is sometimes called “preemptive marketing.” You can preempt your competitors if
you take a strong benefit, whether or not it’s unique, and put your stamp on it first. All
others who come after you will just be strengthening an advantage that you have already
placed in the minds of your prospects.
Live Up To Your USP
Be bold when developing your USP, but be careful to ensure that you can live up to your
USP. Your USP should have promises, guarantees, policies and procedures, employee
evaluations and other reinforcing processes to make each USP come alive.
Having a strong USP can make your business super successful; on the other hand, having
a USP that you can’t live up to is suicide. I’m sure that Domino’s had to eat the cost of a
lot of pizzas when they didn’t arrive within 30 minutes, but they developed a system that
allowed them to deliver on their promise consistently.
Integrate Your USP into Everything You Do
Once you have put some careful thought to your USP and have developed it, you need to
integrate it into everything you do. Your USP should be found somewhere in your
headlines, body copy of ads, direct mail, and Yellow Pages. You should repeat it clearly
and consistently in every one of your radio and television commercials.
You should include it in your sales presentation, on the walls of your business and even
on your business card. You can’t over-do or wear out your USP, especially if it’s
powerful.
The nation’s most successful furniture dealer is based here in Houston, Texas. You can’t
turn on a radio or television without hearing the furniture store’s USP, “Saves You
Money!” across the airwaves. It’s everywhere.
If you stopped someone on the street here in Houston and said two words, “Gallery
Furniture” and asked them to finish the sentence, nine out of ten people would say,
“Saves You Money!” That’s why it’s the most successful furniture store in the United
States.
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The Five Step Formula To Creating
Your Marketing Message
As I was visiting with a friend of mine in the funeral business not long ago I asked him
what his marketing message was and he replied “We sell peace of mind.” I said, “Yes,
but explain to me what your message is to your prospects. What do you say in your
brochures and advertising?” He had a puzzled look on his face as if I was from another
planet.
This is not uncommon. Most small businesses are confused about their marketing
message. Some think it’s their slogan and others think it’s a regurgitation of all their
awards and how long they’ve been in business. Still others think it’s their vision and
mission statement or their company slogan. It’s none of the above.
Why is Your Marketing Message Important?
Your marketing message is critical to everything you do in your marketing efforts. If you
have a great marketing message and combine that with effective promotion, you’ll never
have to worry about getting customers again. You’ll have more than you’ll ever want.
Once you have developed an effective marketing message you can (and should) start to
use it in all areas of your marketing such as:
• Flyers
• Advertisements (print, radio, T.V.)
• Business cards
• Selling presentations
• Website
• Speeches and workshops
• Daily correspondence
• Proposals
• Brochures
Basically, any form of external communication will include parts or even your entire
marketing message. Even outgoing faxes and your telephone answering service will use
parts of your marketing message.
What is Your Marketing Message?
Your marketing message is what grabs your prospect’s attention, tells them how you can
solve their problem, why they should trust you, and why they should choose to do
business with you over and above any and all other choices they might have.
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Most of you have already developed a marketing message and just don’t know it. Some
of you think you have developed a marketing message but really haven’t.
For example, I was visiting with a mold remediation company here in Houston the other
day and picked up one of their tri-fold brochures. Inside the tri-fold were the company’s
vision and mission statement and a bunch of stuff about how long they’ve been in
business, including small bios about the owning partners and managers.
The brochure gave me no compelling reason about why I should have done business with
them or how they could have helped solve my problem. This is typical. Most small
business owners have this erroneous idea that prospects want to know all about their
business rather than their own problems.
The Key to Creating a Winning Marketing Message
The term “message” in itself denotes a communication that is received and understood.
The key to creating a winning marketing message is to make sure that it matches the
wants and needs of those who receive it.
Your marketing message should “speak” to your prospect. This is done by appealing to
your prospect’s “hot buttons” — those sensitivities that trigger an emotional reaction.
For instance, if you found out yesterday that you were suffering from Polycystic Kidney
Disease (a disease that I have, and the disease which killed my mother when I was seven
years old) and you received a typical piece of “junk mail” that had the phrase, “How to
Survive Polycystic Kidney Disease” on the outside of the envelope, what type of
emotional response do you think you’d have?
Would you open the letter? Of course!
Why? The message matched the market (you, a PKD sufferer).
However, that was only the first step in the marketing message. It got you to open the
envelope and read the headline of the letter. Now let’s suppose the headline read, “New
Hope for PKD sufferers — Recent Tests Point to Potential Cure to PKD.”
Do you think you would continue reading the letter? Yes!
Suppose as you continued reading, you saw charts, pictures, and testimonials that
provided positive reassurance that their claim to cure PKD is true. Do you think you
would get excited after reading this information? You bet!
Now imagine as you got to the bottom of the letter you were given a list of other research
companies that were working to find a cure for PKD, but were told that only one (the
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author of the letter) had unraveled the gene sequence that held the key to a cure. Do you
think you would call their toll-free number to get their free report? Absolutely!
You have just witnessed a complete marketing message in action.
5 Steps to Creating Your Marketing Message
Now that I have demonstrated the power of an effective marketing message, let’s review
the simple five-step formula for creating your own powerful and complete marketing
message.
STEP 1 — Identify your target market.
Every successful small business has a target market, whether they know it or not. Even
the local dry cleaner has a target market, which is probably all the professional people
living within a five mile radius of their store. Their target market is geographic.
So the first step you want to ask yourself is, “Who is my target market?” Once you have
narrowed this down then it’s easier to craft a message to that market.
STEP 2 — Identify the problems that your target market experiences.
Each market experiences its frustrations and pains. The secret to crafting a marketing
message that will make your market sit up and listen is to identify their problem and the
pain and suffering they feel as a result of that problem.
Remember the old saying that goes, “People don’t care about you, until they know you
care.” Identifying your market’s pain and suffering tells them that you understand and
empathize with them.
You’ll also find that identifying the problems that your market faces will, in turn, help
you narrow down your target market. For instance, perhaps you only want to target stayat-
home Moms that want to earn some extra money without leaving their homes.
So the second step you want to ask yourself is, “What is the problem they have and how
does it make them feel?”
STEP 3 — Present your solution to your market’s problem.
The next step is to present your solution as a simple cure for all the pain and suffering
your market is feeling as a result of their problem. This step is important in that most
people won’t lift a finger unless they feel an urgent excruciating pain. So once you
identify the pain, rub it in and make people really feel it. Make it feel kind of like an old
wound that just got re-opened and had salt poured in it.
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Now, identify all the benefits of your solution and how those benefits will improve the
life of your prospect and take away all their pain and anguish.
Try to reverse any perceived risk that your prospect might have with taking advantage of
your solution. Also, try to position your solution as being easy to implement. We are
living in a “Do-It-For-Me” society and people don’t want to jump through hoops just to
solve their problem. In fact, most people would rather pay the money just to have the
problem solved for them.
So the third step is to ask yourself, “What is the solution that I have to offer my prospect?
STEP 4 — Present the results you’ve produced for other people in the same
situation.
It’s not enough just to tell people you have a solution; you have to prove to them that
your solution works. And you can talk all day about how you solved this and that
problem, but people are skeptical and don’t automatically believe you.
People will believe other people who are like them that have achieved positive results. In
this step you’ll need to prove your results by giving testimonials from current and former
customers and provide case studies of actual problems that were solved and the results
that were achieved.
The best testimonial is one that starts out by telling the prospect what life was like before
applying your solution. It should be similar to the problem that you described in Step 2.
Then the testimonial should tell the prospect what life was like after applying your
solution. This part should mimic many of the benefits that you gave in Step 3.
The most powerful case studies follow a similar format to that of testimonials. Your case
study should be presented in three steps:
1. The problem
2. The solution
3. The results
When presenting the problem in your case study, discuss not only the problem, but also
the negative results that the company was experiencing and the associated financial
consequences of the problem.
When presenting the results, try to characterize all the benefits experienced as a result of
the implementing the solution, how long it took to get those results (if it wasn’t a long
time), and the financial implications to the company over the long-term.
So the fourth step is to ask yourself, “What are the results that my solution has
produced?”
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STEP 5 — Explain what makes you different from your competitors.
As a consultant in the corporate world I helped numerous companies assess potential
software and service solutions. First we would send out an inquiry, then we would ask the
vendors to come in and demo their product or service.
Often we asked the vendor about how they differed from their competition. I was
constantly bewildered why the vendor would frequently say, “I’m sorry, we don’t badmouth
our competitors.” For some reason, they thought that it would make them look bad
or underhanded.
As a buyer, we wanted the vendor to differentiate themselves from the other vendors that
we were evaluating. We didn’t care whether they were bad mouthing anyone; we just
wanted to know what was different about their software compared to their competition’s
product.
You need to communicate your differences!
Prospects are looking for you to communicate your differences. And those differences
need to have perceived value to the prospect. They need to be something they care about.
The Big Marketing Message Mistake
The biggest marketing message mistake I see is companies communicating “What-We-
Do” instead of “What’s-In-It-For-Me.” If these were two radio channels (i.e. WWD vs.
WIIFM), which one do you think your prospect would rather hear?
While you are playing WWD on your radio transmitter, your prospect is looking for the
WIIFM station. In order for your message to match your market you need to be
broadcasting WIIFM.
Another mistake independent professionals make is to think that their credentials or label
are part of their marketing message. For instance, people don’t care if you are a CMC
(Certified Management Consultant), they care about what you can do for them. So being
a CMC shouldn’t be a part of your marketing message.
Conclusion
Now you have a simple formula for creating an effective marketing message. Your
marketing message should be used in all your external communications. It starts with
knowing the wants, fears, problems, and needs of your target market and ends by crafting
a message that speaks to those problems in a compelling and believable way. The result is
an irresistible message that makes your prospect want to know more.
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How to Make it Rain Referrals
If you don’t have a systematic referral program you are missing out on one of the
simplest, lowest cost ways to generate your highest quality customers. Referrals are the
lifeblood of small business — if you haven’t yet institutionalized a referral program,
you’re making a huge mistake.
Why Are Referrals So Powerful?
The reason referrals are so powerful is because they come from a credible third-party that
has experienced first hand the benefits of doing business with you.
They are even more powerful when they come from a friend, because you know that a
friend has no ulterior motive but to do what’s in your best interest. You can believe what
you friend is saying (versus hearing a commercial from a salesperson whose sole purpose
is to make money from you).
Referrals are also valuable because most of the time they are completely free. How would
you like to receive the benefits of the most compelling sales advertisement on earth for
absolutely nothing? You can through referrals.
Research shows the importance of referrals. According to Paul and Sarah Edwards
(authors of Getting Business to Come to You), up to 45% of most service businesses are
chosen by customers based on the recommendations of others.
A recent Dun and Bradstreet survey found referrals to be one of the two most popular
small-business marketing methods. (The other one is advertising.)
Lastly, and I think this is the most powerful reason of all, customers that give referrals
become more loyal to you and your business. Once someone stands up and makes a
public statement about you, psychologically they will become more loyal to you and your
business.
Customer Service Doesn’t Always Equate to Lots of
Referrals
Customer service is critical to the success of your referral program. It is the foundation of
the referral process. But just because you give good customer service, it doesn’t mean
that you will get a lot of referrals. Receiving referrals on an ongoing basis is as much a
function of deliberate planning as it is of great customer service.
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Many small business owners assume that referrals will happen by themselves if you give
good customer service. This isn’t true. If you are not deliberate and proactive in creating
referrals, the chances of you receiving as many referrals as you want are slim.
And your best customers are ready and willing to give you referrals as was shown in the
statistics above. You just need to show them how.
Word-of-mouth Advertising and Referrals are Not the
Same
Word-of-mouth advertising happens when one of your customers or friends mentions
your small business in a casual conversation. It’s not intentional or planned. It’s just
something that came out of their mouth.
A referral system is a methodical process that you have put in place to capture qualified
prospects through your association with other people. A “system”, by its definition, is a
“process that produces predictable results”. A system can be turned on and off like a light
switch at will. Your business needs word-of-mouth advertising, but don’t confuse that
with developing a methodical system for referral prospecting.
Making it Rain Referrals Starts with Your Attitude!
Time and again, the same question keeps coming to me. “How do I get more referrals?”
My answer is always the same, “You must ask for them”. In reality, most small business
owners know that they have to ask for referrals to get more referrals, but it’s the fear of
asking that impedes them from moving forward.
This fear of asking is rooted in your attitude. If your attitude is one that believes that you
are asking that person to go out on a limb for you by asking them to give you referrals,
then you will always be battling with fear.
People Want to Give You Referrals
If you truly believe that it will be helping them if you ask them to give you referrals, your
fear will fade quickly. Your customers want to give you referrals. It makes them feel
good that they found a great small business that they had a good experience with, and
they want to share their “little secret” (you) with their friends.
They will be seen as a hero, or someone “in the know.” And when their friend receives
great service from you as well, your referring customer will feel as though he was able to
do their friends a great favor.
When you ask for a referral, and you have treated that person right, you are actually
doing them a special favor.
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How to Ask for a Referral
Has someone ever asked you for a referral? Did it go something like this: “Hey, by
chance would you know someone who could benefit from my services?” You start to
ponder and think about it and eventually say, “Well, not off the top of my head, but I’ll
keep thinking about it.”
This is how 90% of all referral questions are asked and unfortunately, the question might
as well not be asked. Rarely, if ever, will it get a positive response. Why? Because it
wasn’t asked correctly. “Know anyone who…” questions are too broad for people to think
about.
People need a frame of reference to help them narrow down the playing field of potential
referral candidates. For instance, imagine that you are talking to one of your good clients
who is pleased with your services.
You ask her, “Mary, you’re a member of the Women’s Financial Planning Association
here in Chicago right?” Mary responds, “Yes, I am.” You ask, “Do you go to their
meetings on a regular basis?” “Yes, most of the time.” Mary says. “Is there anyone in
your association that you believe could benefit from my services? Maybe one or two
people you’ve known in the group for a while or sit next to regularly?”
Did you see the difference? You gave Mary a narrow frame of reference from which to
think about it. It allowed her to “see” the potential referrals in her mind. This may be
limiting the number of potential people that your associates might know, but it is far more
effective than opening up the ocean of people that Mary may know, but can’t remember.
Your request will also stay in Mary’s mind long after you’ve asked it because she
visualized your services with much greater intensity.
Two Types of Referral Programs
Basically, there are two sources for referrals: your current customers (people who have
done business with you) and other influential people. You should have an active referral
system for both types of people.
Your customers are perhaps your most enthusiastic referrers because they have
experienced your product. But, you may in fact, get more referrals from other influential
people who have never tried your product.
Develop a system for obtaining referrals first from your customers and second from other
influential people or “Centers of Influence.”
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Customer Referral Program
Receiving referrals from customers starts with giving great customer service. Without
going into much detail about the ins and outs of customer service, I’d like to share with
you seven “Moments of Truth” that provide opportunities for you create a loyal customer
for life.
Watch for these seven moments of truth and if you go the extra mile at the right time,
bang! You’ll have a lifetime customer.
Moment of Truth # 1: The moment your customer complains.
Moment of Truth # 2: The moment one of your new customers comes back to place a
second order.
Moment of Truth # 3: The moment a customer has thanked you.
Moment of Truth # 4: The moment one of your customers has been through a hard time
because of a foul-up on your (or their) part.
Moment of Truth # 5: The moment a customer needs a favor from you.
Moment of Truth # 6: The moment you see your customer in public.
Moment of Truth # 7: The moment your customer brings in a referral.
Perhaps the simplest way to harvest referrals from your customers is to write a simple
letter asking them for their help.
Centers of Influence and the 80 / 20 Rule
Your best referrers are your customers, the people who have experience with you and can
vouch first hand for your product and service. However, there are many other people and
organizations that you must include in your referral prospecting system.
These individuals are people who know and mingle with many other influential people.
These people are often known as “Centers of Influence.” Centers of Influence can
multiply your marketing efforts ten-fold. They turn your marketing efforts from one-toone
to one-to-many. They are the heavy hitters that can have a profound multiplying
effect on your business.
A smart small business owner will spend the majority of his referral prospecting time
with the 20% of their Centers of Influence that will produce 80% of the results.
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Tier 1 and Tier 2 Centers of Influence
Your Tier 1 Centers of Influence are people that are directly related in some way to your
industry or profession. Tier 1 Centers of influence have a connection to your industry
because they provide complimentary products and services. Referrals coming from your
Tier 1 Centers of Influence can be very powerful.
For example, suppose you were a chiropractor. Tier 1 Centers of Influence for you would
be orthopedic doctors, massage therapists, physical therapists, family physicians, local
gym owners and managers, outpatient placement coordinators, etc. All these occupations
deal with people who may be in need of chiropractics.
What is Your Goal with Tier 1 Referral Givers?
Your goal with Tier 1 referral givers is to be the first person on their minds when
someone asks them about purchasing your product or service. With this in mind, you
should sit down with your staff and come up with ideas about how to be the first person
standing in line in the minds of your Tier 1 referrers.
Here are a few ideas to start you off:
1. Be their number one referrer: Make sure that you also have a referral mindset.
Before you get you must give, which means that in order to get lots of referrals
from these people you must be giving them referrals.
2. Sponsor networking events or social gatherings for them. Make sure you try not to
invite competitors. Have a good cross-section. You might hold several of these
parties throughout the year so that you can invite several different potential
referrers from the same industry.
3. Put each one of them on your newsletter list. Give them helpful information that
they can use to make their sales go up. Give them marketing advice and
information on new developments in your industry in which they should be
aware.
4. Invite them to an all-expenses-paid marketing association luncheon that has a
great speaker. Rent a limo to pick them up, serve them wine or fine drinks, and
treat them like stars. (I know a mortgage broker that does this with real estate
agents and makes a fortune in referrals.)
5. Purchase an information product about marketing in their business and give it to
them as a free gift. They will thank you for your interest in wanting to help them
grow their business.
6. If it’s a big potential referrer, send them a Harry and David
(www.harryanddavid.com) year-round gift that they will receive every month.
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This will keep you in their minds all year long. Not long ago someone did this for
my wife and me, and I glow when we receive our fruit basket each month.
If you don’t have the time or inclination to develop a relationship with your Tier 1
Centers of Influence, then don’t even try. If you’re a chiropractor, it’s better to choose
only one local family physician and become close friends with him then trying to be
friends with 10 physicians haphazardly.
Educate Your Tier 1 Centers of Influence with Special
Reports
Arm your Tier 1 Centers of Influence with tools to help them to help their customers (and
your prospects). You may consider giving your Tier 1 Center of Influence a supply of
special reports that you have developed. Here are some examples of special reports used
in the spa and pool industry.
Again, if you’re a chiropractor and someone inquires about chiropractics to your Center
of Influence she can give him a special report that will answer some of his questions.
This will make your Center of Influence look good and it will also be an effective method
of referring you.
Another idea is to purchase a best selling book-on-tape that you think they might be
interested in and give it to them as a gift to let them know you were thinking about them.
Information products that teach your Center of Influence how to grow their business are
always welcome and will let them know that you are interested in growing your business.
Tier 2 Centers of Influence
Tier 2 Centers of Influence are people whom you come in contact with on a regular basis
in your personal life but aren’t connected to your industry. These are people who come in
contact with a large number of other people. They too can multiply your marketing
efforts.
Your Tier two Centers of Influence include but are not limited to the following:
1. Neighbors
2. Friends
“Five Things You
Must Know Before
You Buy a Spa”
“Your Ticket to
Paradise!”
15
POOL
Reasons
To Buy a
“Ten Dirty Little
Secrets that Spa
Dealers Don’t Want
You To Know”
“Straight Facts
About Pool
Warranties”
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3. Clergy
4. Small business owners
5. Corporate business executives
6. Accountants
7. Financial planners
8. Lawyers
9. Pest control people, and so on.
Your Tier 2 Centers of Influence are people that may have no idea what it is that you do.
Take the time to clearly explain to them not only what it is you do, but the importance of
referrals for your business.
Go one step farther by inviting them to after-hours socials. Tell them stories about some
results that your customers have experienced as a result of your product or service. Get
them excited about what you do. Get to know what they do by asking them questions.
Now each of you can get excited when you give valuable referrals, which in turn will be
transferred to the new prospect.
The Power of Cross-Promotions
Perhaps the single most powerful referral program is a cross-promotion using
endorsements from other well-respected people. It’s a simple idea. An associate sends an
endorsement letter about you and your product or service to their customer list and you,
in turn, do the same to your customer list. It’s a win-win.
The reason endorsement letters are so powerful is because people will buy from people
they know and respect. How many times have you asked a personal friend, “Do you
know a good place to buy __________?” Or “Do you know a good ____________ that I
can go to see about getting _____________ done?” You trust their opinion so you feel
comfortable buying from businesses recommended by them.
You can make it a one-way cross-promotion in which you have someone send out a letter
to their customer list and you give them a referral fee for those people who buy your
service. Or you can make it a two-way cross-promotion, in which each of you sends
letters to your own customers about the other’s products and services.
These are some examples of complimentary product or service businesses that can take
advantage of this powerful strategy:
• Pizza place and video rental store
• Accountant and financial planner
• Toy store and fast food restaurant
• Dry cleaner and clothing store
• Paint store and tile business
• Jewelry store and wedding supply
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The possibilities are endless. Brainstorm with people in your network to come up with
potential promotions that you can do together. The payoff can be tremendous.
Ten Questions to Help You Become a Networking Pro
In my earlier years when I was naïve, I thought that my success would increase in
proportion to the number of business cards I handed out. I handed them out in droves. But
I couldn’t figure out why I wasn’t getting any business. After a few years of experience
under my belt I realized that it wasn’t the numbers that count, but the quality of
relationships that I nurtured.
Zig Ziglar, the famous sales trainer once said, “You can get everything in life you want if
you just help enough other people get what they want.” This is so true. Thanks Mr.
Ziglar.
To be a great networker you must become “you” centered rather than “me” centered.
Recognize that people want to talk about themselves more than anything. They are their
own favorite subjects. Take advantage of that and learn these 10 questions that will make
people feel warm, appreciated, and important.
The following are ten questions that Bob Burg, author of the book, Endless Referrals
gives to help you get to know potential referrers and leave a lasting positive impression.
1. How did you get your start in the widget business?
People like to be the movie of the week in someone else’s mind. Let them share their
story with your while you actively listen.
2. What do you enjoy most about your profession?
This question elicits a positive response and good feelings.
3. What separates you and your company from the competition?
This question gives them permission to brag about their business.
4. What advice would you give someone just starting in the widget business?
This question makes them feel superior and allows them to do some mentoring.
5. What one thing would you do with your business if you knew you could not fail?
This question allows your friend to fantasize and they will be thankful that you
cared enough to ask.
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6. What significant changes have you seen take place in your profession through the
years?
Asking people who are a little bit more mature in years can be perfect because it
allows them to reminisce about the good old days.
7. What do you see as the coming trends in the widget business?
This is a speculation question and positions them as an expert in their industry,
which makes them feel important.
8. What was the strangest or funniest incident you’ve experienced in your business?
People love to share war stories but don’t usually get a chance to tell anyone about
their experiences.
9. What ways have you found to be the most effective for promoting your business?
This question, again, elicits a positive reaction and also gives you an opportunity
to see how they think.
10. What one sentence would you like people to use in describing the way you do
business?
You are allowing them to give themselves a compliment. Who doesn’t like
compliments?
You’ll notice something in common with each of these questions. They all center on the
person you are talking to and allow her an opportunity to talk about herself. Don’t expect
to ask your Center of Influence each of these questions, but do have a few ready when
you talk to others.
Start (or join) a Referral Group
Choose ten people that you think would be good members of your referral group. They
may or may not be your Centers of Influence. Let them know that you are establishing a
referral group and that they were one of the first people to enter them mind because of
their great reputation.
Ask them to educate you on exactly what they do. Tit for tat. No favors, no begging, no
debt, no smiley-facing, just a clean, fair, intriguing and powerful approach.
Have monthly lunches when your group can get together and then perhaps visit one of the
group member’s businesses to allow them to explain what they do. Find ways to serve
your group members and educated them on how to grow their own businesses.
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You can begin to grow your network slowly and invite other people who you or other
members would feel good about recommending. It’s just a matter of expanding your
network to tap into the network of other professionals. Simple, doable, easy, no selling
required, just honesty.
Here are the steps to maximizing your referrals and revenue:
1. Appoint yourself as the host of this network. In other words, be their leader. (No
need to tell them, however.)
2. So, now that you are the leader, ask yourself, “What do my constituents need
most that I can provide for them at a very small cost to myself?” The answer?
Training in how to build their businesses via referrals.
3. Send a monthly note and update your group about each other’s business. You
need to be consistent with this mailing (or emailing) each month. In effect, the
monthly list / email also works as an effective reminder that you are there!
I have a friend in the financial services industry who sponsors a monthly luncheon.
Members pay a quarterly fee, which covers the cost of the lunch. He gets 50 to 100
people at his meetings and has literally stopped his advertising efforts all together.
A Caution About Giving Referral Fees
Use a referral fee as your last-ditch strategy. Money has never bred loyalty. Friendship,
trust, and a positive relationship are what drive loyalty to you and your business. If you
give referral fees you will undoubtedly run into a situation in which the referrer claims he
gave you a referral and you disagree.
Or one of your competitors starts giving referral fees and you feel the need to continually
match them, causing a referral fee war (I’ve seen it happen). Another embarrassing
situation is when your customer finds out that a referral fee changed hands, which breaks
the trust and confidence the relationship.
It just seems that whenever money enters into the equation and there is no surefire way to
track it, trouble is on its way. I’ve seen too many good relationships go sour because of a
referral fee dispute. It breeds everything you don’t want in a trusting relationship.
Conclusion
Establishing a referral program with your customers and other influential people is
absolutely critical. Many small business people make the mistake of not institutionalizing
a systematic program for referrals. They confuse word-of-mouth advertising with a
referral system and, hence, overlook the single most effective advertising for a small
business. Don’t make the same mistake. Develop your networking skills and referral
programs today and start receiving an endless stream of new customers.
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Tapping Into Your Most Valuable
Small Business Asset…Your Current
Customers
Not long ago I was speaking with a client in the spa and pool industry who expressed
concern that his sales had grown stagnant. He mentioned that he was still actively
advertising and working his lead generation process but his new customers had slowed to
a trickle.
I asked him, “As a percentage of your marketing efforts, how much is devoted to new
customer acquisition and how much is devoted to current customer sales?”
He glanced at me with a look of confusion and said, “What do you mean current
customer sales?” He continued, “Once we sell a spa to a customer, that’s it. They’re not
going to come back and buy another spa a week later. A lot of our customers come in to
buy chemicals and some accessories, but that’s it. All of our efforts are focused on
finding people who want to buy a new spa or pool.”
There’s Gold in Your Customer Base Waiting to be
Mined
Unfortunately, my client didn’t understand the value of his customer base. There is gold
in your customer base waiting to be mined. You see, many retailers focus on the first sale
or the “front end” sale and spend a disproportionate amount of time looking for new
customers when the real goldmine lies in the “back end” sales, or continuing steam of
sales.
You’ve probably spent a lot of money acquiring your customers. Not only do you miss
out on lost revenue when you ignore them, but you also flush your return on investment
from acquiring your customers right down the tube.
If you have convinced a person to do business with you, it means that they have already
given you a vote of confidence. If you’ve provided good service and met (or exceeded)
their expectations, it’s very likely that they would be willing to give you a second vote of
confidence or third or fourth. If you’re good you may even get their lifetime vote of
confidence.
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To Get to the Pot of Gold, You Have to Know Where to
Mine
You must be able to contact your customers in order to market to them. That’s why one
of the first pieces of advice I give to my clients is to capture your customer’s contact
information at the point of sale. This process is done automatically in some businesses,
but in others you must ask for your customer’s contact information.
If you have ever purchased an item at Radio Shack you know that the clerk always asks
for your name, address, and phone number. They don’t even give you a reason, they just
ask for it. They just assume you will give it to them, and you know what? 98% of Radio
Shack customers do give it, without any question. The process is so automatic that you
feel that giving your contact information is just part of the purchasing process.
Every small business in America should be doing the same thing as Radio Shack. But to
go one step further, you should be capturing your customer’s email address as well
(assuming they have one). Capturing your customer’s email address is the “holy grail” of
marketing because you can market to your customer again and again at no cost.
If your customer is reluctant to give you their email address, give them a bribe, such as a
coupon for their next visit or something else of value. The effort to obtain your
customer’s email address will be re-paid many times over.
Focus On Your Best Customers
Most businesses lose between 15 and 20 percent of their customers each year. Retailers
lose even higher percentages. Depending on your business, a large majority of your
customers lie dormant, having only transacted business with you once or twice. Your
remaining customers are those that are loyal to you and from whom your profits can be
significant.
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The old 80 / 20 rule certainly applies to your customer base; 20 percent of
Simple Spreadsheet Sample Demonstrating How to Identify Your Best Customers
your customers bring you 80 percent of your revenues. These 20 percent are your loyal
customers that come back to do business with you time and again.
Some are even “hyper-responsive” customers that pull out their wallet any time you make
them an offer. These are the customers that you should be focusing your time and energy
on.
Several benefits result from concentrating on servicing these customers:
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• Your marketing costs go down because you do not have to blast your marketing
message to the world. This is called “spray-and-pray” and is a waste of your
marketing dollars.
• Your marketing efforts become more efficient because you are dealing with
responsive customers, which increases your conversion rate (the number of shoppers
that become buyers) dramatically.
• It rewards customers because they receive your personal attention and periodic
special offers that other customers may not receive.
• It reduces your customer acquisition cost by investing your savings (from not mass
advertising) on customer retention and loyalty building programs.
It’s important to categorize your customer base to identify your top 20% customers.
However, to do this you must first be able to uniquely identify all your customers and the
amount that they have spent with you over a defined time period (last 12 months). If you
don’t have this data, start compiling it right now.
“Business Goes Where Business Is Invited” — A Case
Study
It sounds simple but inviting your customers to do business with you is an effective
strategy for significantly improving current sales. Take it from Max Grassfield, owner of
Grassfield’s, an upscale men’s clothing store in Denver. Max founded the store 35 years
ago, and is still running the business.
Max has become so skilled at inviting his customers to do business that he developed a
trademarked system called, “Invitational MarketingTM.” Max issues personal invitations
to his store to a carefully selected group of individuals in the Denver area. His method
works.
Several years ago, Max Grassfield asked himself, “What can we do to make Grassfield’s
unique?” (which is a question all small business owners need to ask themselves). The
answer, which he evolved after much study, research, and effort, was to develop methods
to know his customers “better than the other stores know their customers.”
For the last ten years, Grassfield’s has been collecting a database of information on its
customers, who voluntarily provide it. Originally, the data included name, address,
telephone numbers, sizes, birthdays, and the wife’s name. (He discovered that wives are
often heavily involved in their husband’s clothing purchases.)
He regularly writes customers on a one-to-one basis that uses the customer’s first name or
nickname (as the customer prefers), their sizes, wife’s name, product preferences, and
references to what they bought in the previous season.
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Most communications are programmed to include messages designed only for the
particular customer addressed: “I’ve been keeping my eyes on the 44 long suits…” The
customer’s salesperson who he met while visiting the store personally signs every letter.
Recently, he sent a wave of three different oversized postcards in one-month intervals, to
4,100 regular customers. Each card greeted the customer by name, and was signed by his
salesperson. There were 117 respondents (a 2.85% response rate) with an average sale of
$451. It was an outstanding success. The final cost per piece mailed was just 48 cents
including postage. For a $1,968 investment, he brought in $52,767 in sales. (Compare
that with the cost of full-page ads!)
A couple of months later, Max selected eight suit sizes that were overstocked. Using the
database, he drafted a special note to each customer whose size fit one of these eight
groups. The incentive was $100 off any suit in that inventory, and $200 off the high-end
Hickey Freeman suites. He mailed 1,164 invitations at a cost of $558 and sold 56 suits in
39 transactions. The average sale was $1,110 with a total volume of $43,307!
This case study is a great example of the power of marketing to your current customer
base. Max knows who his good customers are and he takes advantage of that by
personally inviting them to do business with him, again and again. It also demonstrates
the power and importance of collecting information about your customer and how it can
be used to make you a lot of
money.
Sample Customer Database Using MS Access
The Prodigal Customer — The Lost 20%
The average number of customers that stop doing business with you is about 20 percent
annually. To achieve just a 10 percent increase in sales you have to add 30 percent more
customers! These statistics are startling considering the average business spends six times
more to attract new customers than it does to keep old ones. What is your customer
attrition costing your business?
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Factoid:
A survey on “Why customers quit” found that of the 20% that stop doing business with
you…
• 3 percent move away
• 5 percent develop other friendships
• 9 percent leave for competitive reasons
• 14 percent are dissatisfied with the product or service
• 68 percent quit because of an attitude of indifference toward the customer by the
owner, manager, or some employee.
This means that 82 percent of your customers that stop doing business with you are
unhappy. Unfortunately, unhappy customers don’t usually complain about their feelings.
A study from the Research Institute of America says that the average business will hear
nothing from 96 percent of unhappy clients who experience rude or discourteous
treatment.
Not only is having unhappy customers not doing business with you driving up the cost of
customer acquisition, but it is costing you potential lost sales. The same study found that
unhappy customers will tell their experience to at least nine other people, thus
jeopardizing further potential sales.
So, what do you do to get all of these people buying from your business again? You
assume the statistics are right and that you did something to offend them in one of your
business transactions. What do you do to make your spouse start talking to you again
after you have offended her? That’s right, you humble yourself and apologize and ask for
forgiveness.
Tell them the truth — that they haven’t been buying products or services from your firm
for quite a while and you sense something is wrong. Make sure that you communicate
this in a way that absolutely conveys your genuine concern for their well-being.
After you caringly express concern for the lack of contact and business that your
company has had with them, ask the question, “Is anything wrong?” Follow that up
before your customer responds by adding, “Have we done something wrong or did we
offend you? If we did, it certainly wasn’t intentional. Is everything all right with your
business, job, family, health etc.?
Believe it or not, this simple approach has a magical affect on your inactive customers
(just like it does on your spouse).
Don’t underestimate this strategy. Even big companies use it. When Continental Airlines
was about to go under in 1994, Greg Brenneman, a former consultant suggested to
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Sample Letter From Southwestern Bell Asking
Me to Come Back
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Gordon Bethune, CEO of Continental, that they win back their customers by calling them
and personally asking for forgiveness and for a second chance.
Greg Brenneman, who later became Continental’s Chief Operating Officer, and Gordon
Bethune both got on the phones with their executive staff and started to call their best
inactive customers one-by-one. It worked like gangbusters. Inactive customers who were
dissatisfied with Continental were impressed by the personal phone call and came back in
droves. Since then its stock has risen 1,700%.
Be a Full-Service Provider Without All the Hassle
Let’s go back to my client in the spa and pool industry who mentioned that he didn’t
know what more to sell his customer because they had just purchased a spa, a one-time
item purchase. He did have a valid point. He personally couldn’t sell his customer much
more than chemicals and accessories, BUT, he could be a full-service provider by
offering complimentary products and services in which his customer might be interested.
How? I advised my client to meet with the owners of other businesses that provide
complimentary products and services that his customer might be interested in, and strike
up a commission or referral deal. This way he could still benefit economically from his
relationships with his customers and continue to provide his customers other products and
services.
To maximize this strategy you might consider asking your customers what they are
lacking and then find out how to solve it. As the sayings go…
Find a need and fill it. Find a hurt and heal it. Find an itch and scratch it.
Virtually every successful small businessperson you ask will tell you that finding and
meeting unmet wants is the name of the game when it comes to winning customers. The
better you do this, the more customers you’ll win.
Conclusion
Don’t make one of the biggest mistakes in the book by ignoring your customers. You
paid a lot to get them. You’ll pay a lot if you offend them. Why not make a lot by
delighting them?
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Joint Ventures: Using Other People’s
Customers to Get New Business
Recently, I developed a marketing manual for a niche industry that I service. After
reviewing the chapter in the manual about producing television spots, I admitted to
myself that it wasn’t as strong as most other sections. Knowing a media consultant that
serviced the same industry, I contacted him and inquired as to whether he might want to
beef up the chapter on television production. In return I would recommend his services to
business owners in the industry.
Sadly, he declined because he considered me to be his competition and he didn’t think it
would be “smart” for him to collaborate with me. I kindly smiled and offered my thanks.
As I walked away, I thought to myself how foolish and shortsighted this fellow was for
not taking me up on my offer. He just turned down thousands of dollars in business. I was
not only offering him the opportunity to have full access to my customer base, but an
endorsed promotion to my customers!
Too many small businesses make the mistake of not looking beyond the walls of their
own business to see the vast opportunities of business waiting for them through “joint
venture marketing.” Joint venture (JV) marketing is the process of marketing to the
customers of complimentary businesses.
I’m not talking about ruthlessly going after your competition’s customers. Not at all. I’m
talking about gaining access to new prospects with the express permission and
cooperation of the business that acquired those customers in the first place.
The “common customer” is the center of the
joint venture marketing concept. Your
customers are also customers of other
businesses that sell related products. For
instance, suppose that you are a personal sports
trainer. You help your customers get and stay
healthy. Most likely your customers also
purchase products and services from…
• Athletic shoe and apparel stores
• Athletic equipment providers
• Fitness centers
• Health-related mail order catalogs
• Health-related magazines and books
• Health food and nutrition stores
• Sports events
• Health-related television providers
All these Businesses Share the Same
Common Customers Making Them
Potential Joint Venture Partners
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All these businesses market to more or less the same customers. As a personal sports
trainer, do you have something of value to offer the customers of these other companies?
Joint venture marketing is about developing a special offer and getting the company with
the related product or service to present the offer to their customers, resulting in a winwin
for both of you.
Your Only Limitation is Your Imagination
To demonstrate what I’m talking about, allow me to share with you some great examples
of smart joint venture marketing.
Example #1 — If you own a wallpapering business or deck-building business, you could
offer to provide wallpapering and deck building classes at local do-it-yourself stores in
trade for referrals and exposure.
Example #2 — If you sell men’s’ apparel, you could approach local dry cleaners to
display your store coupons while you offer dry cleaning coupons to your store visitors.
Example #3 — If you are a hair salon owner, you might consider giving away free perms
by allowing local nail salons to give them away as a premium. This way the nail salon
benefits by offering their customers a valuable freebie, and the hair salon benefits by
gaining free exposure and new customers.
Example #4 — If you’re a transmission repair facility, you could assemble a card deck
with local tire companies, brake repair shops, lube and oil change businesses, collision
repair facilities etc. Charge each participant a production fee for the card deck. Once the
card deck is assembled, have each business send a deck to their customer list with a letter
endorsing the other related businesses.
Example #5 — As a lawyer you may want to approach your CPA and ask if he would be
willing to do an “endorsed mailing” to his customers and allow you to do the same for the
CPA. An endorsed mailing would include a simple letter endorsing the services of
someone else, and perhaps even include a free consultation. This works very well for
professionals.
Example #6 — If you’re a chiropractor, you may consider approaching local massage
therapists and persuading them to give away free massage gift certificates to friends and
associates. Once the customer comes in for their free massage the therapist will endorse
your services and refer the customer to you. If the customer comes to you for a free
screening, you could pay the massage therapist a fee for the free massage that the
customer received.
You get the idea. There is no limit to the types of joint ventures you can profitably set up
with other related businesses. Actually, you can even do joint ventures with unrelated
businesses as well. Recently, on a vacation to Mexico, my wife and I were laying out by
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the pool. Suddenly we heard an announcement about a fashion show that would be taking
place at poolside (right in front of us). The fashion began and a talented lady named
Regina Roberts introduced us to a wonderful line of custom designed Caribbean fashions.
The models walked around the pool and allowed all the vacationers to get a good look at
some beautiful clothing that was very reasonable priced. After the show the poolside
guests were invited to shop right there (she brought her whole line with her to the pool).
Ladies rushed to get first dibs on the popular pieces.
It turns out that Regina has a joint venture agreement with the hotels to provide fun
fashion shows to the hotel’s guests while she gets to sell her clothing line.
This is Regina and Her Beautiful Clothing Line
How to Approach Your Soon-to-be Venture Partner
The trick to getting potential JV partners is to “show them the money.” Your approach
should be a simple proposition. “Mr(s). Business Owner, would you like to instantly
make $10,000 to $20,000 or more without any effort, risk, or investment on your part?
What sane businessperson could say no to that proposition. As a matter of fact, they’ll
probably be more skeptical than excited. Whatever their reaction is, they most assuredly
will be curious.
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Once you have their attention you need to calm their fears about the JV being a too-goodto-
be-true proposition. Ensure that you address the following points:
• Your product or service is absolutely noncompetitive to their product or service.
In fact, your product is complimentary to theirs and will be perceived as a caring
gesture by the customer.
• The JV will not harm or take away any profits that they might ordinarily realize.
• They won’t have to do any additional work or spend additional money to rollout
the venture (you are prepared to absorb all production costs).
• You will indemnify and hold them harmless and you’ll include an unconditional
guarantee for all your products sold through them.
• You will have all the orders routed through them for verification and auditing
purposes.
These statements will calm any fears that your related company may have. You’ve just
made it a completely risk-free venture.
Unfortunately, many companies still won’t understand the concept and how it will benefit
them. It’s good to have proven marketing materials and processes that will help you
quantify the revenue they can expect from the venture.
For example, provide a proven sales letter that you have already tested. The sales letter
has a proven respectable response rate. You can almost guarantee the amount of money
your potential JV partner will make. This is a powerful tool that you can use to persuade
your potential partner to say yes.
Hint: You should provide a discount or incentive as a unique, customer-only private
offer. This will make your partner’s customers feel as though partner is doing them a
favor by arranging a special promotion just for them.
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Example of Joint Venture Between a Men’s Wear Store and a Dry Cleaner
Handling Potential Objections
Objection #1 — “I don’t feel comfortable having you interface with my customers. I
don’t like having someone else control the relationship with my customers.”
Response — “That’s fine. As a matter of fact, it would be better if you interfaced directly
with your customers on our behalf. We are more than willing to do all the legwork, which
will take the burden off you. We can have a JV meeting periodically to review how
everything’s going and to make sure that you’re comfortable with the process.”
Objection #2 — “How can I be assured that I will get paid my share of the revenues?”
Response — “No problem. You can control all the money. You can pay me periodically.
I trust that you’ll handle the proceeds from our JV fairly and properly. If you would like
we could set up an independent account and a third-party bank with escrow instructions.
This way there’s no risk for either of us.”
Note: Be completely honest, open, and trusting. Your ultimate goal is to establish an
ongoing synergistic relationship with your partner. This will only happen with a win-win
relationship based on honesty and trust.
Objection #3 — “How do I know your proposal is going to make me money?”
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Response — “We’ll start off the project with a limited pilot test with a small group of
your customers. After the results come in we can review our revenue targets and
feedback from your customers. If you are comfortable with the results we’ll move
forward.”
Note: When negotiating your joint venture deal always try to get an agreement to extend
your relationship. For instance, get agreement at the start that if the test goes well, the
joint venture will last for the next 12 months. You don’t want your partner company
stealing your good idea and playing you against your competitors. (Yes, unfortunately
there are some unscrupulous business owners out there that would do this.)
Take These Steps to Get Your Joint Venture Going
Step 1 — Understand your numbers. You’ll need these to demonstrate how much money
your partner could make. For instance, if you’re a health club owner, know what your
response rate is for a typical direct mail campaign and the dollar value of each new
customer.
Step 2 — Make a list of potential complimentary or related products and services. Don’t
leave out products or services that aren’t necessarily related in which your customer
might still be interested.
Step 3 — Make a list of the businesses that sell those products and services. Specifically
note those companies in which you know the owner or have contacts. Then send a letter
to those people and propose a meeting to explain your strategy further. Always start by
introducing yourself and asking if they would be interested in making money (use a
specific amount) with little to no effort. Make a follow-up phone call to set up the
appointment.
Step 4 — Present a compelling fact-based case for a joint venture. You might even
mention that you have a call in to one (or two) of their competitors to present the
potential venture to them as well.
Step 5 — Deliver on what you promise with integrity, honesty, ethics and enthusiasm.
Potential Joint Ventures Are All Around You — Take
Your Blinders Off!
As a small business owner, you should always be thinking about establishing joint
ventures, even if it’s just a lead generation joint venture. A chiropractor friend of mine
has “drop boxes” in various business locations offering a free back massage and
screening, in addition to a drawing to win a free service or product offered by the
business hosting the drop box.
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It took him less than a week to pull this off and the businesses were more than happy to
help him. He gets lots of referrals without any effort through this simple JV.
Unfortunately, as small business owners we are taught to fight our competitors to win
over their customers. In Joint Venture Marketing you partner with your competitors to
win new customers. Potential JV’s are all around you, waiting for you to take advantage
of them. Stop thinking “competitor” and start thinking “opportunity”!
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What Business Are You In?
A couple of weeks ago I was visiting with a marketing executive friend of mine. I was
excitedly telling him all about the new marketing course that I had just developed and
how awesome it was. He patiently sat and listened to me.
He could see that I was really enthused about what I had just created. After I had finished
my boasting and gloating he got up, and as he started to walk away he said, “That’s great
David. Now the real trick will be getting people to buy it.”
What is the Principle Objective of Your Small Business?
My first reaction to his comment was, “What do you mean? Of course people are going
to buy it. It’s the best work I’ve done to date.” But as I pondered his comment for a
moment, I realized that I had fallen into the age-old deadly small business mistake that
most entrepreneurs fall prey to: forgetting the principle objective of my business.
My marketing friend subtly reminded me that my principal occupation is NOT marketing
consulting; it’s the MARKETING of consulting services.
“Any Fool Can Make Soap, It Takes a Clever Man to Sell
It”
There is an old advertising quote that says, “Any fool can make soap, it takes a clever
man to sell it.” This is as true today as when it was first uttered many years ago. Any
Tom, Dick, and Harry can make a bar of soap. In fact, Harry might make a soap so
advanced that it is even self-rinsing! (By the way, there is a self-rinsing soap called the
“Hand Sanitizer”, made by Purell… It’s fantastic)
Even if it’s the most advanced soap on the planet, it won’t matter if no one buys it. I hate
to think of my masterful marketing course as just another piece of soap, but that’s exactly
what it is. There are a thousand great marketing courses out there…
…but it takes a clever man (or woman) to sell them!
Failing to understand (or accept) this principle is so poisonous that it can kill any small
business fast. You see, to make a small business successful you need cash flow. To get
cash flow you need customers. To get customers you must sell your product or service.
You might be a plumbing wizard or a crack electrician, but so are the fifty other plumbers
and electricians whose ads sit right next to yours in the Yellow Pages. No matter how
great your technical skills are or how innovative your product is, your business will
whither away and die — like 80% of all small businesses — if you can’t sell them.
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“How Would You Do Things Differently If… “
Let’s suppose for a moment that you truly did internalize this critical principle. Suppose
that you sincerely believed that your most important function was the marketing of your
products and services. What would you do differently tomorrow morning?
• Would the contents of your daily to-do list change?
• Would you allocate and prioritize your time differently?
• Would you consider changing your role in the organization?
• Would you change the criteria and process with which you screen new
employees?
• Would your personal training agenda and employee training change?
I would suggest that if your really believed deep down that your primary business
objective (and number one goal) is to *market* your products and services, your to-do
list, the way you allocate your time, your role in your company, the hiring process, and
your personal and employee training would be radically different than it is today.
High Value Activities
Now that you know what your primary business objective should be, what are your going
to do about it?
In my prior life as a big-time corporate consultant, I sometimes felt uncomfortable about
how much my company billed my clients for my time. I often asked myself, “Am I
adding value right now, equal to the price my client is paying?” It helped me to prioritize
my activities.
I suggest that you make a habit of asking yourself that same question every day. Allow
me to list a few activities that I (and you should) consider “high value.”
• Creating (or developing) something unique in your product or service.
• Attending direct response marketing conferences / workshops / bootcamps.
• Meeting with your mastermind-marketing group.
• Building your personal marketing swipe file.
• Finding low-cost targeted advertising opportunities.
• Studying the marketing strategies of your competitors and other businesses
outside of your industry.
• Networking with other owners and representatives of businesses that target your
same market.
• Testing your advertising and marketing to improve your current response rates.
• Writing articles for trade journals, local newspapers, magazines, industry
newsletters, etc.
• Writing sales letters and managing your direct mail marketing campaigns.
• Training employees on current offers and how to present them to customers.
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OK, that’s enough. Do you get the idea? Normally, your Director of Marketing would
perform those activities. You must become the Director of Marketing! That should be
your new role in your business. Why leave the absolutely most critical part of your
business to someone else?
I can hear you saying right now, “But I’m already doing all those things.” And my
response is, “How much time are you devoting to those “high value” activities?” Do you
need to hire a manager or assistant to relieve you of all your other duties so that you can
focus exclusively on those activities that have the most impact on your business?
Brian Tracey, a famous author and speaker has said that, “to be really successful, you
should stop doing any activity that wouldn’t normally pay you what you’re worth.” For
example, if you think you’re worth $50 an hour, why would you be filing papers when
someone else can do it for $8 an hour?
Becoming a Master of Direct Response Advertising
If you were to ask me, “David, I only have $1,000 to market my product. Where should I
spend this money to get the highest return on my investment?”, my response would be to
invest it on your personal education. Nothing will bring you a greater return on your
marketing dollar than your personal investment in becoming a master of direct response
marketing.
I regularly spend thousands of dollars every year investing in books, tapes, CDs,
workshops, conferences, videos and every other form of educational medium. In fact, as I
have interviewed many successful business people, I have consistently found one
common trait. Each person had a passion and insatiable desire to learn and invest heavily
in their own private education.
What Do Bill Gates and Oprah Have In Common?
What do Bill Gates and Oprah have in common other than their own personal Fort Knox?
An insatiable desire to learn. Did you know that every year Bill Gates goes away for a
week with a suitcase full of books just to read? If Bill can find time to do it so can you.
Oprah is famous for her book club. Do you have a reading list? And if so, what is on it? If
you want your business to succeed, let me recommend a few books that should consider
having on your reading list.
Getting Everything You Can Out of All You Got — Jay Abraham
The Ultimate Marketing Plan — Dan Kennedy
An Entrepreneur’s Guide to Commonsense Marketing — Brad Antin
Successful Direct Marketing Methods — Bob Stone
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Marketing Secrets of a Mail Order Maverick — Joe Sugarman
Influence: The Psychology of Persuasion — Robert Cialdini
How to Promote Any Product for Under $500 — Jeff Slutsky
This list is only a start, but it will give you a good solid education about the fundamentals
of direct response marketing.
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How Free Giveaways Can Boost Your
Small Business Revenues
Offering free giveaways to prospects and customer is a powerful business-building
strategy that can result in a flood of new and repeat customers.
It may seem counterintuitive to give away your products and services to build your
business, but people can’t resist the lure of receiving something for free. The word “free”,
as worn out as it may seem, is still the most powerful word in marketing. It has a
hypnotic effect on people.
Why Free Giveaways Work
The reason free giveaways work so well is two-fold. First, prospects that test your
product or service risk-free will hopefully recognize its value and continue purchasing
what you offer. Or even better, your prospect will get “hooked” on your product or
service and won’t be able to live without it.
Second, the fact that your product or service was given to your prospects as a free gift
will compel them to return the favor by continuing to purchase from you. This principle
is called the “Law of Reciprocity”. Simply stated, people naturally feel an obligation to
return favors as a way of expressing their thanks.
The Law of Reciprocity works! The Hare Krishnas raised millions of dollars in the late
sixties and early seventies using this principle. In airports the Krishnas would give away
small wooden umbrellas as a free gift and would in turn, ask for a donation.
After the donor would give their donation, they would toss the little umbrella into the first
trashcan they passed. The Krishna would then pick the umbrella out of the trashcan and
turn right around and give it to the next person. It worked like a charm.
Know Your Total Customer Value Before Giving
Freebies
The key to safely offering free giveaways is to know your “total customer value.” This is
the amount of profit you will receive from your customer over the total length of your
relationship. This figure not only includes business that you will receive from your
customer, but also any referrals you may receive from them.
For instance, suppose you own a dry cleaning business and you compute your average
“total customer value” to be $1,250. How much money would you be willing to invest in
free giveaways to acquire a new customer? $50? $100? $200?
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The answer is * yes * to all of the above. Why wouldn’t you invest $100 to gain $1,250
in profits? Coincidentally, this is why most small business owners are nervous about
offering free giveaways. They don’t understand the principle of “total customer value.”
Information — The Ultimate Free Giveaway
Ideally, it’s best to offer free giveaways that are low-cost but that have a high perceived
value to the person you are giving them to. Information is a great example of a free
giveaway that has a low product cost and a high perceived value. This is why it’s smart
for small businesses to use special reports containing “insider” information as free
giveaways for new customer lead generation.
Your special report could be a written document, an audiocassette, or a video containing
subject material that your target market would be interested in. Videos especially have a
high perceived value. A valuable reference guide that I use often is “Spencer’s Guide To
Special Interest Videos” which has over 13,000 hard-to-find videos.
For instance, the following are videos that you’ll find in this guide that you can purchase
as free giveaways for your prospects:
Example # 1 — Used Car Dealer
“Buying Your Next Used Car” — 36 minutes
“Don’t Get Stuck with a Lemon: Smart Consumer’s Guide to Buying a Used Car” — 20
minutes
“Drive Home a Better Deal: Insider Secrets On How to Buy Your New Car, Truck or
Van for Less” — 55 minutes
Example # 2 — Sports Fishing Gear Retailer
“Basics of Better Bass Fishing” — 57 minutes
“Advanced Trolling for Saltwater Fish” — 60 minutes
“Fishing Bloopers” — 60 minutes
“Successful Fly Fishing Strategies” — 102 minutes
Example # 3 — Beauty Salon
“Basic Make-Up Techniques” — 60 minutes
“40 & Over Make-Up Techniques” — 60 minutes
“Hollywood Make-Up Secrets” — 60 minutes
Example # 4 — Chiropractor
“Back in Action” — 40 minutes
“Back Pain Relief” — 60 minutes
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“Exercise For a Pain-Free Back” — 48 minutes
Example # 5 — Quilt Shop (My wife is into quilting)
“How to Make Patchwork Quilts” — 160 minutes
“Reversible Quilts” — 55 minutes
“Basic Quilting” — 90 minutes
Giving away free informational videos can turn a mediocre offer into a valuable and
compelling offer.
Free Giveaway Case Studies
There are a myriad of ways to offer a free giveaway and many effective types of
giveaways (other than information) that small businesses can use to attract new and
inactive customers. The following are a series of case studies from different small
businesses demonstrating how each uses free giveaways to build their businesses:
Case Study # 1 — Mobile Video For Hire Van
The owner of a mobile video for hire service wrote a letter offering the use of a free
rental van for four weeks. Why four weeks? To get people into a habit of using his
service. The result? 19.6% redemption rate and as many as 65% of the people who took
up the free offer went on to become regular customers.
Case Study # 2 — Health Club
A health club gave away six weeks of free memberships has saved a fortune on
conventional advertising costs by having health food stores and sports shoe retailers give
their free membership away to their customers as a special gift. The majority of free trials
tuned into paying members at over $500 per membership.
Case Study # 3 — Optometrist
An optometrist mailed a postcard to prospects offering free eye exams, including four
different types of eye tests (dry eye test, glaucoma test, visual acuity test, cataract test) to
patients they hadn’t seen in two years. The optometrist grossed an extra $10,000 in two
days and the phone rang off the hook, non-stop.
Case Study # 4 — Oil and Lube
An oil and lube center offered a free tire rotation, oil change, and fuel injection service.
However, the customer was only allowed to take advantage of one of these services per
visit. The free service giveaways resulted in significant up-sells on each visit and the
opportunity to capture the customer’s personal and automobile information for future
offers.
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Case Study # 5 — Hair Styling Salon
A hair styling salon offered a free children’s haircut with every visit. Most of the
customers brought an average of two to three of their children to get their hair cut,
resulting in a doubling of their weekly sales figure.
Case Study # 6 — Chiropractor
A chiropractor offered a free back massage gift certificate for Valentine’s Day with a free
new patient exam including an x-ray, neurological and orthopedic exam. To make this
offer super-successful, he went around to local businesses and gave several gift
certificates to the local owners and managers to give to their employees as a free gift.
Case Study # 7 — Dentist
A local dentist offered a free teeth-whitening with a comprehensive new patient exam,
including x-rays. To make this particular offer a winner the dentist sent several coupons
to existing customers who had already received the teeth-whitening service, to give to
their friends as a special gift. To make it even more effective, he coded each coupon and
offered three free whitening sessions to the customer that sent in the most referrals.
Case Study # 8 — Carpet Cleaner
A carpet cleaner offered to steam-clean two rooms absolutely free. No strings attached.
Once the cleaner was in the home he checked for stains on the floor, rugs that needed
stretching, holes or weak spots in the rug, and he even performed an air duct inspection.
The result was an average of $60 to $80 dollars worth of services sold per free cleaning.
Case Study # 9 — House Cleaning
A house-cleaning service offered to do a full house-cleaning free in the month of
December. They called it, “Santa’s Gift to Mommy.” They were immediately deluged
with requests. Once “Mommy” saw what they could do to their home and how good she
felt with a clean house, 38% of them signed up for the regular service. The biggest
problem the house-cleaning business owner had over the next 12 months was finding
staff to do a good job of cleaning.
Case Study # 10 — Vacuum Cleaner Retailer
(I included this case study because David Oreck is such a fantastic direct marketer.)
David Oreck, chairman of Oreck Vacuums gives away a free Cordless Speed Iron just for
taking the “Oreck XL Challenge” and trying out his 8-pound vacuum cleaner. Even if
you don’t buy the Oreck XL vacuum cleaner you get to keep the Cordless Speed Iron!
And if you end up purchasing the Oreck XL vacuum cleaner, you also get his Oreck
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Super Compact hand-held vacuum. Now here’s a guy who knows what “total customer
value” is all about!
Justify Any Deal That’s “Too Good To Be True”
If your offer that includes free giveaways appears “too good to be true” to your prospect,
it could decrease its believability and your credibility. To avoid this you should always
give the reason why you can offer such a great deal.
It might be that you goofed and are now overstocked, you got a great deal from your
supplier, or you just want to say thank you in a meaningful way. Whatever the case may
be, give a reason. It doesn’t even have to be a good reason; it just needs to be believable.
Remember, your prospect is very skeptical and has good reason to be. We’ve all been
duped at one point in time by a “too good to be true” scam. Furnishing your prospects
with the reason why you can offer them such a good deal helps them to logically
reconcile your offer in their minds. In turn, this will give your prospect the comfort level
needed to act on your offer.
Conclusion
Using free giveaways is an effective marketing strategy if used correctly. Think about
what you can offer free-of-charge that your prospects would consider valuable, and that
you can give at a low cost to you. Don’t forget to compute your total customer value so
you know how much you are able to invest in attracting a new customer. Lastly, make
sure your justify any offers that are just too good to be true.
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Guarantee Marketing: How to Turn
Your Guarantee Into A Competitive
Weapon
One of the reasons people don’t buy from you is the perceived risk they believe they are
taking in purchasing your product or service. These risks include:
1. Making the wrong decision
2. Losing money
3. Not receiving what they paid for
4. Not being satisfied and then not being able to recoup their investment.
There are a number of risks that people must hurdle over to purchase your product or
service. One strategy to overcome these risks is to offer a rock solid guarantee that will
make their purchase risk free, or at least decrease the risk as much as possible.
A strong guarantee makes it less threatening for people to consider your offer. You lower
the barriers that prevent people from doing business with you. You give them a
compelling reason to buy today without fear of looking bad tomorrow. By removing the
risk to buyers through guarantees, your business will stand out. You’ll make it easy and
fun for people to buy from you and your profits will dramatically increase.
I understand that delivering any product or service is not risk free, but by stating and
trumpeting your guarantee it will decrease the risk in your prospects mind and increase
their trust and willingness to buy from you.
The Guarantee Myth Revealed!
Businesses shy away from making strong guarantees because they think that a large
percentage of their customers will take them up on it. Studies have proven this belief to
be false. At most, only about 1-2% of your customers will ever take you up on your
guarantee.
Ask yourself the following questions:
• How many of my current customers have complained to me about my products or
services in the past month?
• In the past year?
• How many of my customers have asked me for their money back or to replace a
product or redo a service that we’ve provided?
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You’ll find that if your product or service is of acceptable quality (even mediocre
quality), you should have few complaints, if any. (If you have a lot of complaints, that’s
okay. Now you know where to focus your efforts!)
The notion that your customers will take you up on your guarantee too often is a myth. It
doesn’t happen. Humans are generally non-confrontative and don’t want to make a big
issue of things (there can be a downside to that as well).
If your customers are mostly satisfied now, there’s nothing to worry about. By offering a
risk-free guarantee, you’ll simply call more attention to the quality you already have in
place.
Make the strongest promise you can comfortably live up to, and feature it prominently in
all your marketing materials and don’t worry about the myth that you’ll lose your shirt
redoing services or replacing products. It just doesn’t happen.
The Invisible Guarantee
What’s that you say…you don’t have a guarantee? Wrong. 99% of all small businesses
already have a guarantee – but they just don’t know it nor do they publicize it.
Let me explain. If a customer called to complain that the work you did was
unsatisfactory, what would you do to fix the problem? Would you tell them, “Sorry, we
can’t fix that for you.” or “Sorry, let the buyer beware.”? No, you would probably offer
to redo the work or replace the product. You would do what it takes to make your
customer happy.
You see, you probably already have a strong guarantee but you don’t publicize it because
you think that a bunch of your customers would come back and take you up on it (I’ll talk
more about that in a minute).
If you’re already honoring an invisible guarantee you need to start publicizing it. It’s a
powerful hidden asset in your business that you’re not exploiting.
– Sidebar –
If you’re not taking care of your customers, whether you have a guarantee or not, you
should be. It just makes sense. Especially when you consider that according to one recent
study, a satisfied customer tells one person about your company. But an unsatisfied
customer tells NINE people. You need to put those numbers in your favor. You need to
satisfy your customers and a guarantee makes it all possible.
– End Sidebar –
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Six Steps to Creating a Rock Solid Guarantee
Now, here’s a step-by-step method for creating your guarantee and using it to
supercharge your marketing efforts.
1. Look At Your Competitors.
Go through the Yellow Pages or the newspaper to search for other business’
guarantees. Better yet, just have someone call and ask them about their guarantee.
Look outside of your specific marketplace for good guarantees. Write them down.
When you finish your research, what patterns do you see? Are there many guarantees
in this industry? What kind did you find? Did you find guarantees of specific
performance or the more common, dull-as-dishwater, “Satisfaction Guaranteed”
variety?
2. Look At Your Strengths.
What area of your business is a strong point for you? Do you do very fast
installations, are you great at maintenance, do you respond quickly to customer
queries? Do your products or services produce consistently outstanding results? Do
you have the widest selection in town? Do you save money for your customers?
3. Guarantee Results.
Think about what specific RESULTS a customer wants when he or she buys your
products for services. What good things happen when customers use your products?
Better relationships? More money? Reduced stress? Write down the answer in
specific detail, and then guarantee that outcome. (Just make sure you can fulfill on
your promise.)
A delivery company that works fast can guarantee delivery times — by 10:00 a.m., or
within 24 hours. Do you have the widest selection in town? Guarantee it by daring
customers and competitors to find more products somewhere else (just be sure you
can back this up). Do NOT simply guarantee “satisfaction.” Guarantee in detail what
that satisfaction will look like to your customer.
4. Choose A Payback (or Remedy).
As unlikely as it is that you’ll be making good on your guarantee (remember — only
about 2% of customers will ever take you up on it), you want to create an attractive
payback in case customers are unsatisfied. Ideally, it won’t cost you much but will
have a high perceived value.
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A hassle-free, money-back guarantee is a good place to start. But try to dress it up a
bit. Remember, a better-than-risk-free best guarantee is the best guarantee of all.
Yours should exceed customer expectations and be memorable.
5. Start Small, Test And Track Your Results.
This is vital! You must know how well your guarantee is performing before you make
it a permanent part of your marketing. How? You might advertise the guarantee in
only one of the publications you advertise in, mention it on your telephone message,
on one set of business cards, or in a letter that you send to a small segment of your
customer base. Then, track the results.
How much have sales increased over your previous totals before you had a
guarantee? Be sure to test at least two combinations of your guarantee to find the one
that works best for you. You can guarantee results for 30 days in one test and 90 days
in another (longer guarantees generally work better). You might even use a lifetime
guarantee. Experiment!
6. Get The Word Out.
Once you’ve tested and found a guarantee that you’re comfortable with, publicize it!
Make your full guarantee — in writing — a part of your advertisements and marketing
communications. Put it in your newspaper and Yellow Pages ads, your business
cards, your Website, your letterhead, your brochures, etc.
Breaking Down Your “Soft” Guarantee
Breaking down your guarantee into specifics can turn a weak guarantee into something
powerful that builds trust and reduces skepticism. This tactic works well not only for
“hard” guarantees but especially for “soft” guarantees.
* * Sidebar * *
What are a “soft” guarantee and a “hard” guarantee? Hard guarantees provide a promise
based on specific results. For instance, assume you have a flat tire and you get it fixed by
a company that guarantees you that if you tire gets a puncture wound within the next 12
weeks you can bring it back and they’ll fix it for free.
That’s a hard guarantee because it makes a promise based on specific results. You should
always try to use hard guarantees in your marketing message because they are more
powerful and tend to stir people’s emotions.
However, what if you have a product in which you can’t make a promise for specific
results but want you want to let your customers know that you still stand behind your
product.
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This calls for a soft guarantee. A soft guarantee makes promises based on generalities
and not specifics. For instance, “We guarantee to be kind to you.” This is a soft
guarantee because it’s very general and not specific. You should be kind anyway.
* * End Sidebar * *
A technique for turning your soft guarantee into a powerful statement is to break it down
into pieces and explain what each part of your guarantee means. The following is a live
example from a credit counseling company for which I just did some copywriting.
Allow me to give you an example from a recent copywriting project that I did for a credit
counseling firm. This company didn’t want to make any hard, fast promises
(unfortunately, that’s typical of most businesses). But they did want to express that they
were willing to stand behind their product.
So what I did was take their general marketing statements and break them down into
guarantees. Each guarantee taken separately is weak but when they are put together it
makes for an impressive statement.
The “Broken Down Soft Guarantee” – A Live Example
We stand behind our promise to help you reach your financial goals. We don’t just talk
the talk. We walk the walk. In fact, we’ll walk with you every step of the way.
Here at Acme, we not only stand behind our services but we tell you what it means by
clearly spelling it out for you.
“We Stand Behind Out Promise”
Guarantee #1 – The “Pay Off Your Debt Faster” Guarantee
We have experienced counselors who help people like you every day to develop a
comprehensive financial plan that results in paying off your debts faster than you
ever could have on your own. In nearly every case, we’ll take years off your
payment schedule allowing you to reach your financial goals sooner than
expected.
Guarantee #2 – The “Be Courteous and Understanding of Your Situation”
Guarantee
Our representatives are understanding and respectful of your situation and will
talk with you on a human level. Many of our counselors were in the same
position as you not long ago and so they intimately understand what you are going
through and can empathize with your situation.
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Guarantee #3 – The “Pay You Money Back” Guarantee
At Acme we have created an exclusive and unique incentive plan called the “Pay
Off Your Debt” program. We promise that if you qualify for this program and
make all your payments in full and on time for six months, you’ll received 50% of
the “fair share” funds that we’ve collected on your behalf.
Guarantee #4 – The “Simplify Your Debt Payment Effort” Guarantee
We make bill paying ultra-simple. You’ll make only one simple payment to
Acme and we’ll do all the dirty work of paying all your bills. We will stop all the
creditor hassles, nagging phone calls, and bill collection letters by helping you
consolidate your payments into one simple monthly payment.
Guarantee #5 – The “Provide 24/7 Access to Payment History Information”
Guarantee
Our state-of-the-art telephone system allows you to access your payment
information twenty-four hours a day, seven days a week. You’ll never be in the
dark again about when your payments come in, when they go out, and any other
payment information you need to know.
Notice that each one of the guarantees is general in nature. Individually,
they are weak guarantees but put together they make a strong statement and
in the credit counseling industry (where no one makes any promises) it has
set them apart from their competitors.
Making Your Guarantee Your Unique Competitive
Advantage
Companies that make their guarantee part of their Unique Selling Proposition have
prospered. Have you seen the commercials for the Men’s Warehouse in which the CEO,
George Zimmer says, “You’re gonna look good. I GUARANTEE it.” That one phrase
has made the Men’s Warehouse the most successful men’s retail chain in the nation.
The ability to differentiate your business by the guarantee that you provide will set you
apart from your competition because most companies don’t use their guarantee as a
unique selling proposition.
This is especially true with service companies. For example, I know a small business tax
consultant whose unique selling proposition is, “I GUARANTEE that I can save you 15%
more money above and beyond what your current CPA or financial advisor is saving you
today.” Now that’s a bold guarantee. It’s no wonder his practice is full.
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Another associate of mine runs a small business marketing firm (much like mine) and his
unique selling proposition is, “I GUARANTEE that with my help you’ll double your
business revenues and profits within 12 months or my services are free.”
What I’m suggesting is that you make your guarantee a focal point in your marketing
efforts. Your opportunity lies in how aggressively you’re willing to tell the world about
your guarantee. To the extent that you do, you’ll enjoy a competitive advantage over all
other companies in your industry. Your business courage will pay you tremendous longterm
dividends.
Magic Words to Create Powerful Guarantees
How you word your guarantee can make all the difference in the world. Power words
and phrases significantly boost your sales and response rates. Here are few strong words
and phrase that will bring some zing to your guarantee:
• Take-It-To-The-Bank
• Better-Than-Risk-Free
• You Can’t Lose
• Unconditional, Money-Back Guarantee
• Your Money Back, No Questions Asked
• I Personally Guarantee
• No Way That You Can Lose
• 30-Day Free Examination
• No-Questions, No-Quibbles, Money-Back Guarantee
• Iron-Clad Money-Back Guarantee
• 100% On-The-Spot Full Refund
• My 110% “Call me Crazy” GUARANTEE!
• Absolutely No Risk To You!
• 100%, No-Hassle Refund!
• My 110%, No-Fuss, No-Questions, “Take-It-or-Leave-It” PROMISE!
• No Pussyfooting Around And Get Every Single Penny Back GUARANTEE!
There’s no better place to find some of the most powerful copy written guarantees than
on the Internet. Here’s a few that I think are heads and shoulders above the rest. Most
are for information products so keep that in mind. As you read these notice that each
guarantee has its own headlines. Your headline is 80% of your guarantee.
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Sample Guarantee # 1 – Yanik Silver – Instant Sales Letters
100% Better-Than-Risk-Free-Take-it-To-The-Bank Guarantee:
I personally guarantee that if you make an honest effort to try just a few of these proven
sales letters in your business, you’ll produce at least 10 times your investment in profits
within the next 60 days. That’s right, 10 times extra profits you wouldn’t have made if
you didn’t send out these sales letters. You’ve got 2 full months to prove to yourself these
templates really do work. But if you aren’t 100% satisfied, let me know and I’ll issue you
an immediate, no-hassle refund right on the spot. Plus, the free bonus gifts are yours to
keep regardless, just for your trouble.
———————————-
Sample Guarantee # 2 – Kirt Christensen – Buying Web Businesses
Here’s My 125%, Walk Away, “No Hard Feelings,” No Fuss, Full Money Back
Guarantee!
I’m so convinced that you’ll be absolutely delighted with your membership that I’m
prepared to give you an iron-clad, 30-day, “Take-It-Or-Leave-It,” totally outrageous
GUARANTEE.
This “impossible-to-turn-it-down” guarantee is simple:
Try my Buying Web Business Power Mentoring System out for a full month, read
through the entire site, download all of the bonuses, post questions on the private
discussion board to your heart’s content and use the step-by-step checklists.
If you don’t pick up at least one good idea that can help you get every penny back in less
than 30 days, simply cancel and owe us nothing. In other words, if you’re not totally
delighted with the techniques you’ve learned, drop me a line…
I’ll refund your $29, right there, on the spot!
Simply put, I’ll gladly issue you a refund and we’ll part as friends, no harm done. What
could be fairer than that?
(Of course, on top of my “No Hard Feelings,” 30-day money back guarantee, you can
simply cancel your membership at any time. Billing will stop from that point on. No
problem!)
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Sample Guarantee # 3 – Ted Nicholas – How I Sold $400M Worth of Products
30-Day Ironclad Money-Back Guarantee
Not to worry. You may order the book with no risk whatsoever. Review it for 30 days. If
you are not delighted, upon request you will receive a prompt and courteous refund or
credit.
———————————-
Sample Guarantee # 4 – Jeff Gardner – The Ultimate Million Dollar Idea Generator
Stronger Than Steel No-Risk Money-Back Guarantee!
I’m so confident that my proven system will help you create mounds of exciting new
product ideas, that I’m standing behind it 100% with this remarkable guarantee:
Get The Ultimate Million Dollar Idea Generator – and if you don’t instantly believe it’s
worth 100 TIMES the amount you paid for it, let me know – and I’ll refund every penny!
No Questions, No Headaches, No Hassles! And you can keep all bonuses, worth $196.75
- Absolutely FREE – as my gift for checking out my complete Million Dollar Idea
System.
———————————-
Sample Guarantee #5 – Alex Mandossian – Marketing With Postcards
“I’ll Absorb the Burden – Risk Free Guarantee”
I’ll tell you what … I’m willing to absorb your entire burden of risk, if you’re willing to do
what it takes to find out. So, here’s my unconditional, 100% lifetime guarantee that makes
your decision a no-brainer:
If, at any time, you’re not completely satisfied with Market with Postcards™, I’ll
personally send a UPS driver to your front door, pick up the manual and CD-ROM, and
refund your entire purchase price, including shipping charges! You can keep the $650 in
free bonuses as my gift to you, and we’ll part as friends. Fair enough?
———————————-
Sample Guarantee #6 – George McKenzie – Going Public: 10 Ways To Use The
Mass Media For Free Advertising
You Can’t Lose With Our 100%, Ironclad, Money Back Guarantee
Your satisfaction is assured through our no risk, you-can’t-lose, 100%, no-questionsasked,
iron-clad money back guarantee. If for any reason, you aren’t thrilled and satisfied
- 72 -
with our product, just contact us (or send the product back) within one year and we’ll
refund 100% of your purchase price. No hard feelings, and you won’t have to ask twice.
If you’re a smart business person, you don’t just hand over $47 without a reasonable
assurance that you’re getting your money’s worth. So how about this? Don’t decide now if
this product is for you. Just get it and try it out. If it doesn’t do everything I say and more,
if you don’t save money, time and frustration, if it isn’t life-changing, if it doesn’t work
for you, you have nothing to worry about because you can get every dime of your money
back under our no-loopholes guarantee. So you have nothing to lose and everything to
gain.
———————————-
Sample Guarantee #7 – Lee Benson – Ezine Tactics
The Triple Your Money’s Worth, String-Free Warranty
It’s simple. If you’re not absolutely, entirely and utterly thrilled with your purchase within
one year from the date you bought it, you get a full refund plus you’ll get to keep any of
the material that you’ve already downloaded from our website.
All I ask is that you give it chance, for your own sake. Yes, these strategies do work. My
advice will make you profit, I absolutely guarantee it… but only if you take action and
follow the advice for your own inspiration.
If you don’t make a return on your investment with my package, I don’t want your money.
Instead, you will get a full refund of 100% as well as the knowledge you’ve earned from
the package and the free consultations giving you at least three times the worth of your
investment.
———————————-
Sample Guarantee #8 – Ken Evoy – Make Your Knowledge Sell
“You Will Gross At Least 1,000 Times Your Purchase Price Within Two Years, Or
We’ll Refund 10 Times What You Paid For MYKS!”
That’s right — 10 times your money back if you fully use the strategies of the MYKS!
package over the next two years and you don’t pull in at least 1,000 times your purchase
price. There is only one single, simple, common-sense condition (that protects both of
us)…
Make a full, honest effort over the two-year period. Use all the relevant techniques, tools,
suppliers and devices in the Complete ToolKit, as appropriate.
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Conclusion
Your guarantee can be one of your most powerful marketing tools. Unfortunately, the
vast majority of businesses just don’t want to place a strong guarantee on their product or
service. They’re too afraid of the perceived negative consequences. It’s a pity.
Develop a guarantee today that stretches you to the limits and test it. If it doesn’t work
for you…fine. I “guarantee” that it will though and you’ll start winning customers with
ease.
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Niche Marketing: Expand Your
Customer Base By Narrowing Your
Marketing Focus
I believe one of the most underutilized marketing weapons for small businesses is the
power of niche marketing. Niche marketing is simply marketing to customer groups that
fit the demographic and psychographic profile of your target market.
For instance, if you’re a public relations specialist, instead of marketing your services to
anybody and everybody, why not market your services to a specific industry that relies
heavily on public relations such as the not-for profit industry.
You could get even more specific and specialized by offering your services to only notfor-
profit religious organizations. Although this narrows your market significantly, it
will open up doors you never knew existed.
Benefits of Niche Marketing
Why would anyone want to narrow down the amount of people to which they market? It
almost seems counterintuitive. Just think of all the opportunities a business would be
missing by not marketing to the masses.
The truth is that when you narrow whom you market to, three magical things happen.
1. Your Product or Service Becomes More Desirable
You start to create a set of tailored products that work very well specifically for your
niche. People want to buy stuff that’s made just for them…that solves their unique
problems. Would you rather buy a mass produced suit or would you rather buy a suit
made-to-fit just for you?
2. Your Name and Brand Spreads Rapidly
People in groups talk! Lawyers talk to other lawyers. Gas station owners talk to gas
station owners. Pool builders talk to pool builders. If you’re good and you provide
products and services for a specific niche, your name will travel fast.
3. It Becomes Easier and Less Expensive to Prospect
If you pick the right niche, it becomes very easy to contact your prospects. Most good
niches have a list of people who are either members of a group in your niche or people
who have purchased things associated with your niche. Instead of spending money on
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what I call “spraying and praying” marketing, you can now spend your money on getting
your message to just the right people in your niche who want to hear your message.
4. You’ll Face Less Competition In A Niche
The mere fact that you have narrowed your marketing focus to a smaller subset of people
means that there will be less competition with which you’ll have contend. In fact, if you
hurry and become the dominant player in your niche it will deter competitors from
entering in and competing with you directly. Less competition results in more business
with less effort.
Type of Niches
Basically there are four general types of niches, occupations, demographics, geographics,
and psychographics (or “subcultures”). Let’s explore the difference between each type of
niche.
1. Occupations
An occupational niche is one that is made up of people that are gainfully employed in the
same occupation. Examples of this would be fireman, carpet cleaners, purchasing
managers, military people, or human resource managers.
The assumption is that people who are in the same occupation worry about the same
things and are forced to tackle similar problems. This makes them good candidates for
products and services that are created to solve the specific problems of that particular
occupation.
For instance, a carpet layer probably deals with lower back problems. Customer service
representatives usually deal with high stress. Garbage collectors have to deal with low
wages. Navy people usually deal with long family separations. A homemaker often
tackles problems related to children. Each occupation has its own peculiar problems that
come as a result of being in that specific job.
2. Demographics
A demographic niche consists of people who share one or more of the same
characteristics such as weight, height, ethnic origin, income, gender, etc. It would stand
to reason that overweight people deal with the same problems associated with obesity,
while Latin Americans may have to deal with problems that come from living in a low
income neighborhood.
Note: Please don’t get offended with this statement. Statistically speaking, a large
majority of Latinos live in low income neighborhoods. These are the types of things that
good marketers consider on a daily basis. (Hey, my mother was born and raised in
Chihuahua, Mexico y por eso puedo hablar el espanol con fluidez.)
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3. Geographics
Geographics is a very simple niche. People who live in the same (1) neighborhood, (2)
subdivision, (3) school district, (4) voting precinct, (5) suburb, (6) apartment complex,
(7) city, (8) metropolitan area, (9) county, (10) state, (11) region, (12) country etc. often
share the same problems associated with living in that area.
For instance, people who live in North Dakota deal with cold weather and snow in the
wintertime while people who live in Houston deal with excessive humidity in the
summertime. People who live in Los Angeles have to deal with smog, while people who
live in the Heritage Park subdivision here in Friendswood, Texas don’t have access to a
good local dry cleaners.
4. Psychographics (or subcultures)
Psychographics is the study of how people think and what they like. People with similar
psychographic profiles often share the same passions, hobbies, and even dislikes. This is
probably the biggest and perhaps the most lucrative of all the niche categories because
people spend a large majority of their discretionary income on items that they are
passionate about.
Another name for this category is subcultures. Examples of subcultures are people
who…
• Hate Bill Clinton
• Love Marilyn Manson
• Hate paying taxes
• Love toy poodles
• Hate abortion
• Love new marketing ideas
• Hate website popups
• Love Harley Davidsons
• Hate foreign cars
• Love guns
• Hate companies cutting down forest trees
• Love having sex
• Hate pornography
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Okay, you get the idea. Each of the people in these “Love – Hate” categories will spend
money to either get what they love or spend money to avoid what they hate. Other
subcultures could be people who belong to a certain religion or are a member of specific
political party.
Don’t get hung up on the type of niche you want to go after. Just make sure that you go
after a niche. To give you a better feel of how niche markets can be separated, here are a
few more examples of various niches:
• People who are between the ages of 40 and 55 who have incomes over $55,000
• Doctors
• People who own homes that have an appraised value of $155,000 or higher
• Lawyers
• Accountants
• People who own a Lexus, Acura RL, Toyota Landrover, Lincoln Navigator,
Mercedes Benz S Class, or a BMW.
• Members of the American Association of Retired People (AARP)
• People who just purchased a $500 plus mail order product.
• People who own boats and yachts
• American Express platinum cardholders
• Back and neck pain sufferers
• Arthritis sufferers
• Sleep disorder sufferers
• Diabetes sufferers
Niches can be divided up any way that makes sense. It can be by occupation, income, car
or house ownership and a host of other demographics, geographics, or psychographics.
How to Select the Right Niche
I often get questions from small business owners that have decided to market to a niche,
but don’t know what niche to market to. This is an important decision that must be
researched carefully. There’s nothing worse than spending your dollars on creating
custom products and services only to find that your niche doesn’t want to buy them.
The following are several questions that you should ask yourself when choosing a niche
in which to specialize:
Question # 1 – Can you easily and affordably contact the niche?
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Imagine how hard it would be to find people who are going to have car accidents within
the next week. Yes, you read that correctly. That’s exactly what auto accident paint and
body shops deal with on a daily basis.
Their niche, people with bashed up cars, is impossible to contact in advance. They have
to market to everybody. These types of companies are forced to spend a lot of money on
yellow page ads (where people go in times of emergencies) and “spraying and praying”
ads.
Let me give you some further examples of varying levels of difficulty in finding people
in niches.
A. Policemen – Simple to contact. There’s probably an association list that you can rent
or buy.
B. Bird owners – Semi-simple to contact. There’s probably a trade publication or
catalog for bird owners that rent their customer list.
C. Parents whose children are doing poorly in school – Harder to contact. You might
find a list of parents who have purchased products or services to help their children
do better in school.
D. Acne sufferers – Harder to contact. You might find a list of people who have
purchased anti-acne products or services.
E. People who hate war – Difficult to contact. You won’t find many anti-war lists. You
would probably have to create a list through your own lead generation efforts.
F. Print Shop Owners – Simple to contact – The names and addresses for print shop
owners can be found in your local yellow pages or an association list.
When a niche is hard to contact, it is usually expensive to contact. If a list doesn’t
already exist you’ll have to pay to develop the list, which can be very expensive.
IMPORTANT TIP # 1 - Personally, I would think hard before choosing a niche that
doesn’t have an association, a trade publication(s), or hold conferences. These are the
primary tools for contacting your prospects and fueling your word-of-mouth efforts.
IMPORTANT TIP # 2 - If the product or service you are offering has a high price tag
and a large margin, you’ll be able to spend more money to generate the lead. For
instance, if you were looking for people with breast implants for a class action lawsuit
settlement, you would probably be able to spend a lot of money advertising to find these
people.
In general, the cost to acquire a customer must be lower than the lifetime value of a
customer. However, in some instances it can be higher than your product or service cost
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(i.e. lose money to obtain a customer) if you have a lot of backend products or your
product is a consumable that requires reorders.
Question # 2 – Can the niche afford your products and services?
Is the niche that you’re marketing to affluent enough to buy your product or service
without having to worry too much about overspending? I once tried to sell a product to
college students for over a year in vain. A lot of money was wasted, with nothing to
show for it.
My mistake was marketing to the wrong people. Students don’t have a lot of
discretionary money to spend so they are careful to spend it only on things that they deem
absolutely necessary, such as dating, school books and tuition, and partying
(unfortunately).
Question # 3 – Is there a successful track record of selling these types of products or
services to the niche?
A big mistake that inventors make is to create products that require that people change
their normal habits and routines. There is a genius inventor here in Houston that has
created a unique keypad that makes typing much easier (it requires only one hand rather
than two).
It really in an ingenious product, but he is floundering. Why? Because people are used
to regular old keyboards and don’t want to go through the pain of learning something
new, no matter how easy it is. To be successful, you should pick a niche that is already
buying products and services similar to yours and that are paying the prices that you want
to charge.
To be honest, this advice goes against traditional thinking. Most marketing experts will
tell you to find a niche and fill it, meaning to find a niche market with a problem that isn’t
being solved. I agree with that thinking; however, there’s an old saying in marketing that
“Scouts come back with arrows in their backs.”
By that I mean, if you’re trying to sell a new product to a niche that doesn’t have a track
record of buying those products or services, you might find that they are just not ready to
buy it. Take the fax machine. It’s used in almost every office in America and many
homes as well. But when it was introduced, it floundered for many years because people
just weren’t ready to buy it.
The safest way to penetrate a market is to find one that already understands the need for
what you sell. Then all you have to do is build a better mousetrap and sell it to them (or
license it to a competitor).
Question # 4 – How much competition is there in the niche?
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It’s better to jump up and down in a pond than an ocean. The more competitors you have
to deal with, the more aggressive your marketing efforts must become to be the winner.
Now this might sound contradictory to the answer in “Question # 3,” in that I told you
that you should sell to a niche that already buys your type of product or service and now
I’m telling you to go where there is little competition.
However, hopefully your product or service is different or unique enough that you don’t
have any direct competition. Even if you’re marketing in a niche that already sells the
same type of product or service you do.
Question # 5 – Are you familiar with the niche or do you have experience in the
niche?
People like to buy from people that have “been there and done that” and have walked in
their shoes. They like to buy from “one of us.” If you have experience as a practitioner
in the niche you’ll have an advantage selling to the niche.
For instance, if you were selling doughnut machinery to doughnut shops people will
automatically have an affinity towards you because they know that you’ve faced the same
problems as they are facing.
In addition, the more you know about your niche customer and what keeps them up at
night, the easier it will be for you to provide tailored solutions to solve their problems and
to communicate with them about your solution.
Question # 6 – Is the niche big enough to sustain your business?
Why enter a niche that simply doesn’t have the economics to sustain your business over
the long term. One of the first calculations you should do when deciding on a niche is a
breakeven “reasonableness” assessment. This assessment tells you how much of the
market you have to penetrate just to breakeven in the first year.
If you have to penetrate a high percentage of the market just to breakeven you might want
to reconsider entering into this niche. However, if you can enter the market with only a
sliver of penetration then it may be a good market to consider.
For instance, compare the two following scenarios for reasonableness:
Scenario 1 – Selling CD business cards to the real estate agent market
Approximate number of eligible realtors in the U.S. = 840,000
Number of units needed to sell to breakeven in the first year = 150
Required market penetration percentage = .01% (150 / 840,000)
Number of Competitors = 9
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Scenario 2 – Selling accounting and bookkeeping services to small businesses
in Friendswood, Texas
Approximate number of eligible buying units in Friendswood = 350
Number of units needed to sell to breakeven in the first year = 42
Required market penetration percentage = 12% (42 / 350)
Number of competitors = 15
Which scenario is more attractive? In Scenario 1 you would only have to penetrate .01%
of the market to breakeven and you only have nine competitors. In Scenario 2 you would
have to penetrate 12% of the market in your first year while competing against 15 other
CPA’s. Clearly Scenario 1 is the better choice (assuming you have a great product that
people want).
However, there are many other factors that go into choosing a niche. This is just one
factor (albeit an important one) to consider.
The Five-Step Method for Marketing to a Niche
Niche marketing can be surprisingly easy. In the following section I’ve outlined a fivestep
method for marketing to a niche.
Step One – Identifying and Targeting Your Niche
The first step in niche marketing is to understand who the buyers are in your niche and
what makes them tick. Here are some questions you might ask to get to know them a bit
better.
• What problems or worries keep them up at night?
• What are their habits?
• What magazines do they read?
• How do they get their continuing education?
• What clubs or associations do they belong to?
• What are their occupations?
• How old are they?
• What television shows do they watch?
• Do they already buy products or services similar to yours? (What are they?)
• What is their annual income?
• Where do they live?
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How do you get this information? If they belong to an association, chances are, there will
already be a lot of information assembled about the market. If not, do a survey with
several people in the niche. Ask them these questions.
What If You Already Own a Business?
If you already own a business and want to start selling to niches review your customer list
from the last two years with your employees and ask each of these questions about each
customer. Write down what you know about each of them. You’ll be surprised how
much you remember and the amount of information you come up with.
If you have done a good job of reviewing your customers you may possibly start to see a
trend. If a lot of your customers have been doctors then pull those names out and develop
a list of all the doctors that have purchased from you. Do this with all your identifiable
trends (especially occupations).
From the lists that you have made, you can tell with some certainty that they are the kind
of people that have demonstrated a propensity to buy from you. This will give you some
confidence that if you find like-type people they will be good candidates to purchase your
product or service.
Step Two – Finding Your Niche Market
Finding your niche market can be the most difficult step in your niche marketing strategy.
That’s why it’s important to choose a niche that you can easily contact. All expert direct
marketers will tell you that your mailing list is the most important part of your entire
direct marketing campaign (let alone your business). If you can’t easily and affordably
contact a niche market, you shouldn’t be marketing to it.
The key to finding the people in your niche market is to think about who else markets to
the same niche and look to them to help you compile your list. It is very possible that
they will rent their list to you or you could offer them a commission from every product
or service that you sell as a result of using their list.
An Example of Finding Doctors
Suppose that you wanted to market to doctors in your city. You could just go to the
yellow pages, but sending a letter or offer to their place of business may not get a very
high response rate because it will usually go through an assistant who will screen out all
non-business type mail.
Here are some ideas to get access to their home addresses:
• Get an electronic copy of the yellow pages. These are sold in stores like
CompUSA. Get the names of the doctors from the yellow pages and look them
up in the white pages. You may be able to match their names and legal titles
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(example, Dr. John Davis or John Davis M.D.). This will be time consuming so
you may want to get a high school student to help you.
• Go to the Oxbridge Directory of Publications. This reference manual contains
demographics information on over 20,000 magazines and newsletters. You’ll be
able to find publications that reach specific markets, which have the
characteristics you want. For example, you might discover a magazine like
“Physician’s Lifestyle”, a bi-monthly publication that reaches every single
medical doctor in the country.
• Go to your local library and browse through the Standard Rate and Data
Service (SRDS) list directory. In it you’ll find just about every mailing list
known to man. It is an invaluable tool for your niche marketing efforts. You will
find lists of doctors that have purchased recently through direct mail.
• Contact the organizations and associations that doctors belong to such as the
American Medical Association or your state medical association. If the
associations won’t rent you a list then ask if you can get a list of magazines,
journals and publications that cater to the medical community. Magazines are
very good sources for renting lists.
• Go to MediaFinder.com and search for media such as newsletters, magazines,
journal, periodicals and other media that are targeted toward the medical
community and doctors specifically. A couple of references I found at
MediaFinder.com were the APPA Digest, which is the publication for the
association on financial planning for doctors. Another media was the Allergy
Hotline Newsletter, which is a newsletter for doctors and other medical
professionals that treat allergies.
• You can also work through local mailing list brokers or better known brokers
such as www.BestMailing.com or www.MailersSoftware.com, which have lists of
all kinds of doctors that live across the country. One list I looked at was for the
state of Texas, which included 30,091 medical doctors. A list broker can help you
find the type of list for which you are searching. However, list brokers usually
make their money off of large mailing lists and may be less helpful but they might
steer you in the right direction. They eat, sleep, and drink mailing lists.
o NOTE: Every one should have a good list broker. My personal list broker
is Gil Terriberry and his company is Direct Contact Marketing Group and
he can be reached at 877-262-8105 or you can email him at
dcmg@dcmg.com.
What If You Can’t Find a List?
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If you can’t find a list of your target market then you’ll have to do lead generation to
build your list. This process can be expensive and time consuming but once you have the
list, its yours to keep (rather than renting lists).
Lead generation usually starts with placing advertisements in other media (i.e.
newspapers, Internet, magazines, newsletters etc.) that target the interests of your niche.
The advertisements should entice readers to call up and ask for something free (or very
low cost). This allows you to get their contact information and build your list.
For example, if you were a sauna dealer targeting people with heart disease (saunas are
known to improve blood flow to the heart) sufferers you might write up a news article
about recent studies that have found that saunas to help reduce the risk of heart disease.
At the end of the article you might offer a free report about how saunas improve your
health that the reader can get by calling a phone number. Below is an example of what
that ad might look like.
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To find out more about lead generation, read the chapter 22 titled, “Lead Generation:
How to Flood Your Small Business With Hot Qualified Prospects.”
Step Three – Collect Testimonials From Your Niche
After you have identified your niche market and developed a list of niche prospects it’s
time to start assembling the marketing campaign. The first step in this process is to
“The Japanes e Secret for
Decreasing Heart Disease”
Researchers in Japan have found that
taking hot saunas help reduce thickening
of blood vessel walls cutting heart-disease
risk. Researchers assigned 25 men with at
least one risk factor for heart disease, such
as high blood cholesterol, diabetes or a
smoking habit to 15-minute stints in a
140-degree sauna every day for two
weeks. For half an hour after each
episode, the men rested in bed, covered by
blankets. They also had the thickness of
their artery linings monitored by
ultrasound.
Just two weeks of daily sauna
treatments reduced thickening of the
endothelium – the inner lining of the
blood vessels – by 40 percent! Thinner
blood-vessel walls means less chance of
developing blockages, which raise the risk
of heart disease.
The results suggest that sitting in a
sauna “is probably reasonable for people
at increased risk or for folks with mild
heart disease,” says Robert Vogel,
director of clinical vascular biology at the
University of Maryland School of
Medicine in Baltimore.
The results of this research is a
breakthrough for people suffering from
mild forms of heart-disease.
Today saunas can be found at local
health clubs and day spas. However,
there is a growing number of men and
women who are investing in personal
saunas that can be installed in their
homes.
“The people who purchase our private
saunas want the benefits that sauna
bathing offers in the privacy of their own
homes.” Says Paul Frey, sales manager at
Backyards of America.
Sales of private home saunas have
soared in the last two years to over $250
million dollars and it continues to
increase. Many Americans are
discovering the benefits of private saunas.
Frey comments, “People come to us to
buy home saunas from all over the state
because that’s what we specialize in. We
know more about saunas than anyone.”
For more information about how
saunas can benefit you call our prerecorded
message line at 801-345-9982 to
get your free report titled, “How to
Improve Your Health with Saunas.”
Paid Advertisement
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gather testimonials. Dan Kennedy, a successful marketer has said, “If you don’t have
testimonials, you don’t have a product.”
Testimonials from your niche market will make your marketing much easier. There are
few things more persuasive than sending a message to a doctor that has five doctors
attesting to the benefits of owning your product or service and how it has helped them in
their profession.
This is a marketing secret. People like to hear about and do what people just like them
are doing. For instance, if a doctor sees that another doctor purchased a hot tub and has
found that it helps her to relax and get rid of all the stress that being a doctor brings, it
will immediately peak his interest. It is a natural human instinct.
This is why television producers play recordings of laughter when a punch line is said
during a sitcom. Because they know that it will make the live audience laugh, even if the
punch line wasn’t funny. And the people in the audience know that it’s just a recording
but it doesn’t stop them from laughing even louder when the recorded laughter is turned
up. It’s a natural instinct to do what others are doing.
If they are doctors then you might consider writing them a letter asking them for their
testimonials. Refer to chapter 20, “Using Customer Testimonials in Your Marketing
Message to Break Down Fear and Skepticism.” This section will give you a lot of ideas
about how to get testimonials from your customers.
Step Four – Creating Niche Marketing Tools
Once you decide to market to a niche you will need marketing communication and
creative designed specifically to capture the attention of that niche. This is where your
upfront research will come in handy.
You should by now know your niche market’s hot buttons. What they like and don’t like.
What their problems and frustrations are. What language and words they use in
conversation. This information is necessary to be able to develop your niche marketing
tools.
The following is a list of the type of niche marketing communication and creative tools
that you might need to effectively market to a niche.
• Appointment generating letters that use tricks and tactics designed to be used with a
follow up phone call.
• Salesletters, postcards, and grabbers that can be used to generate leads or “sell off the
page” to existing lists of potential prospects. These should include a time-sensitive
offer and a clear call-to-action. You should also consider creating a series of “linked”
salesletters that can be sent out in a timed, sequential follow-up marketing program.
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• Print advertisements that you can use to generate leads in newspapers, magazines,
yellow pages, newsletters, classified ads etc.
• A toll-free hotline with scripts you can use for lead generation and also for providing
consumer awareness messages, product and service descriptions, testimonials from
customers etc.
• Joint venture endorsement letters that you can use with businesses that market to your
same niche that offer complimentary products or services. You should create one for
you and one on behalf of your joint venture partner.
• Free reports (or white papers) for lead generation purposes that consist of relevant,
useful information that your target niche would find interesting and that has
something to do with your product or service. You should create a report in booklet
format, but also in audiocassette, CDROM, and video formats as well.
• Press releases that do lead generation, promote events, generate awareness, and get
interviews from the media.
• A series of how-to articles that position you as an expert in your niche that you can
submit to niche specific trade magazines, newspapers, and newsletters. You can also
post these on your website and email them to prospects before meeting.
• A newsletter, whether it is online or offline, you should seek to build a list using a
regularly sent newsletter.
• A website that is designed to generate leads, build credibility, and sell your products
and services. (A website is a must!) Your website should include a series of
Autoresponder messages that are sent to prospects who visit your website.
• Brochures and fact sheets that you can include in your mail outs and that you can give
to walk-ins.
• A “Question and Answer” fact sheet that addresses the most common objections
about your product or service. This should not only be inserted into mail outs but
also used on your website.
• A Powerpoint presentation that you may use in sales meetings with your clients. You
can use this as a “talking document” or a more formal presentation that you would
give with an overhead projector (usually used in B-to-B industries).
• Case studies and success stories from clients and customers. (This will be a part of
the testimonial gathering process.)
• Customized thank you letters/cards that are sent out to prospects and customers in
response to a customer transaction (both positive or negative).
Creating an Audiocassette or Video
I often get inquiries about how to create audiocassettes, special reports, or videos to be
used in your lead generation and conversion efforts. Let me show you how to do this
easily by giving you an example. Since we’ve been talking about doctors and hot tubs,
let’s stay with that example.
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If you are targeting doctors you might create an audiocassette that they can listen to on
their way to work titled, “The Ultimate Stress Reducer for Busy Doctors.” If I was a
busy doctor (most of them are) I would be very interested if I received an audiocassette in
the mail with this title. At least I would listen to it.
The following would be the outline for this audiocassette:
I. Introduction
A. Question – Do you experience stress?
B. Signs of stress
II. II. Effects of stress on doctors
A. In the workplace
B. In their personal lives
III. Many Doctors are turning to relaxation hydrotherapy using spas
A. What is hydrotherapy?
B. How does hydrotherapy reduce stress?
C. What other doctors are saying about hydrotherapy and owning a spa?
IV. What are the other benefits of owning a spa?
A. Relaxation after a hard day
B. More quality time with loved one
C. Better sleep
V. Introduce Spa City USA (short in duration)
A. Spa City USA specializes in providing spas to doctors
B. Spa City USA has provided more doctors a spa than any other dealer
C. Why do doctors choose Spa City USA to buy a spa
VI. Where can you get more information
A. Offer a free video, “The Spa Lifestyle” by calling XXX-XXXX or…
B. Going to website and entering in special code
C. Thank you for listening
This information can be said in 30 minutes or even less (30 minutes is a long time on
tape). There are several ways to create this tape. You can certainly do it yourself or you
can hire a freelance writer to write your script. The best (and easiest) place to hire a
freelance writer is at www.elance.com. At eLance you can put your project out for bid
and have freelancers bid on it.
You might think this is a lot of work but once you have it completed, its done! You can
use it over and over and over again as many times as you want. It can also be used as a
model for lawyers, business executives, CPA’s and other prospects that fit in your niche.
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With a few modifications you can have a version ready to go for other niches. Once you
have your information products done you can really put your niche marketing program
into high gear.
Step Five – Contact Your Niche Market
The next step is to reach out and touch your niche. This is a two-pronged approach.
Prong # 1 has the objective of getting noticed in your industry and Prong # 2 has the
objective of selling your products and services.
Prong # 1 – The following are just a few ideas you can implement to get noticed in your
niche.
1. Speak at industry conferences and trade shows (or you local Chamber of Commerce).
This is an excellent method of getting your name out there because most every one in
the industry reads the presentation agendas and who is speaking.
2. Write articles for your industry’s trade publications. Most trade pubs are thirsty for
good content and will allow you to include a resource box at the end of your article.
(Here’s a trick. Identify the top decision makers and trend setters in the niche and
interview them for your article. You will get to know them and establish a positive
relationship. in an unassuming way.)
3. Start an ezine in your niche and begin collecting email addresses of prospects in your
niche. (This is a must!)
4. Offer a white paper (B-to-B) or special reports to your niche market. This will build
credibility and will give you permission to do follow-up mailers and direct marketing
to those who respond.
5. Join and become active in the niche’s associations and networking groups. Volunteer
to serve on action committees and boards.
6. Make contact with other industry authorities, consultants, and big wigs who might be
able to give you referrals.
Prong # 2 – The following are some ideas to get you started selling to your niche.
1. Send a lead generation postcard offering a free information product. Then put your
respondents on a follow-up marketing plan.
2. Send offers in your newsletter. You might even consider renting an email list to get
people to sign up for a free report just to get them on your newsletter list.
3. Advertise in your niche’s trade publications and newsletters.
4. Do a joint venture endorsed mailing with other vendors that will recommend your
product or services as you recommend theirs.
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5. Sponsor a booth at your niche industry’s trade show. This is the fastest way to gain
exposure to your niche…especially if you’re in a B-to-B market.
6. Send newsletter inserts lead generators to zip codes matching your target
demographic.
7. Rent a list through a list broker and send a lead generation letter to your niche market
(try to get your people to respond to something for free in your first mailing so that
you can build your own list and stop renting names from lists).
No doubt this list could go on and on. There are a myriad of ways to contact your target
market; however, I have found nothing better than to send a lead generation letter to
prospects and get them to respond for a free special report. Then start sending out
follow-up marketing pieces to convert prospects.
Some products and services need to be sold in person so your objective would be to get
an appointment with a decision maker. This would require an appointment generation
letter or postcard.
Step Six – Communicate Often with Your Niche
Statistics have shown that a prospect usually has to be exposed your offer five to six
times before they act on it so if you’re consistent you will make an impression. You
should provide consistent communication with your niche by contacting at least once a
month.
Here are few ways to consider for your follow-up marketing plan:
1. Online Newsletter – Online newsletters are excellent because they arrive
immediately, are inexpensive to send, and cost little to produce.
2. Offline Newsletter – Offline newsletters are a bit more expensive to send but people
like to hold things in their hands when they read. They also lay around and get
residual exposure.
3. Periodic Teleconferences – With today’s technology you can hold teleconference
calls using bridge lines very inexpensively. This also provides a forum to physically
speak with your target market.
4. Postcards – Postcards are a simple, inexpensive way to contact your customer. You
can even do a one-page newsletter on a postcard. It’s simple and fast.
5. Get your own column in a trade publication – Approach trade pubs with a series of
articles that provide great information that they can run in their magazine or
newsletter for free. They might even give you your own article.
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Again, there are a number of ways to communicate with your niche. The key is to do it
in a way that is fast, inexpensive, and effective.
Step Seven – Don’t Stop at One Niche!
Once you have your niche marketing process down don’t stop at one niche. Apply what
you have learned from dominating one niche to other niches. The marginal cost of
developing the processes and materials for another niche is negligible.
All you have to do is tweak your product for other niches. Then give your product or
service away (or for a huge discount) in exchange for testimonials. Then start tweaking
your marketing materials for your new niche.
I know of a person who created a book with tips and techniques for saving on taxes. He
sold it for around $50. He then tweaked it slightly for real estate agents and sold the
book to that industry for $150. He did this again and again to dozens of small business
industries for huge profits.
Just think of the “Chicken Soup for the Soul” series. That has got to be the ultimate
“cross-niched” product. There’s a “Chicken Soup for the __________ Soul” for just
about everything and everybody. Ingenious!
There is a whole wide world of niches out there to dominate. If you just think of the
different occupations that are part of your overall target market, your list may be very
long. Be a niche marketer and dominate your market place.
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Using Consumer Research To
Develop Powerful Small Business
Marketing Strategies
All profitable marketing strategies are based on a complete and thorough knowledge of
the customer. There’s no doubt that I have seen my share of products that sell like crazy
from companies that don’t know a lick about their customers and have no marketing plan
at all. Successful small businesses know their customer extremely well.
Knowing Your Customer
How does knowing your customer help you sell more products and services? Having
consumer research information allows you to tailor your marketing tactics to meet the
needs and wants of your target customers. For example, suppose you knew that your
target customer was a 55-year-old making over $70k a year who had back problems.
You could create a direct mail campaign to people who live in zip codes with average
income over $70k, who have had back pain medical treatment, and who were over 55
years old. Pretty simple, right? Well, it IS that simple and, yes, there are mailings lists
that will give you that information. Now, there won’t be many people on the mailing list,
but at least you are zeroing in on your target market and not wasting ad dollars.
This type of information can help you in a myriad of ways when planning your marketing
campaigns with radio, website advertising, periodical advertising, postcard direct mail
campaigns, and so on.
Where to Get Consumer Research Statistics For Your
Small Business
Your primary resource for acquiring consumer research for your small business will most
likely come from your industry’s trade association. If they are doing their job right, they
should have some type of consumer and business research statistics that they generate on
an annual basis about your specific industry.
This research may contain information about consumer preferences, purchasing criteria,
level of satisfaction, and other useful data upon which to base your marketing strategies.
Contact the association or organization that serves your small business industry and ask
them for access to their research statistics.
You may be able to find your association at www.associationcentral.com. You may also
be able to locate valuable research statistics from suppliers that serve your industry. Call
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a few of your suppliers that provide direct goods and ask them if they have any such
research and if you can have access to the findings. It always helps if you’re a current
customer.
Using Consumer Research to Increase Sales
Consumer research is an often-ignored marketing tool that is rarely used by small
businesses. The reason it’s usually ignored is small businesses don’t know how to use it.
Many owners will see a statistic and log it into the back of their brains but never use that
statistic to their advantage. The pot of gold is not necessarily in having the consumer
research, but knowing HOW to use it to sell more products and services.
Let’s take a look at some consumer research in the spa and pool industry and try to
develop some marketing tactics that would take advantage of our knowledge to sell more
units. The following statistics that I will quote are available from the National Spa and
Pool Institute by calling (703) 838-0083, ext 153.
I highly recommend that every small business contact their own industry association to
get a copy of their own industry’s statistics, as you will soon see how valuable they can
be to you and your business.
Developing Marketing Strategies Based on Consumer
Research
Statistic #1: According to ICI Acrylics, the profile for an average spa consumer is a
person who is married with an above-average income, with most earning between $40k to
$75K. Most do not have children under 18 living at home, and most have lived in their
home an average of seven years. The male member of the household comes up with the
idea to get a spa or pool and initiates the buying process.
Marketing Strategy: Knowing this information, you might plan a direct mail campaign
to zip codes where the average income is around $60k and to married couples with empty
nests who have been at the same address for five years or more. You would address the
letter to the male member of the home, by name if possible. You might perform a test
mail campaign in several zip codes and measure response rates before launching a fullscale
campaign.
Statistic #2: Two-thirds of all new spa owners say they have friends who own spas, and
90% of current spa owners would recommend one to a friend.
Marketing Strategy: You might consider launching a strong referral program with your
current customers, since two-thirds of the people who have purchased a spa know other
people who already own one. This statistic tells you that the spa and pool industry has a
tight demographic audience that has similar tastes and spending habits.
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Additionally, it is uncommon for 90% of a customer group to recommend a product so
strongly. This indicates a very high level of customer satisfaction. This makes it ripe for a
referral program, as compared to an industry that has customers in a very wide range of
demographics, which makes for a poor referral program.
Statistic #3: The top three reasons that non-owners didn’t plan to purchase a spa were (1)
27% never gave it much thought, (2) 13% thought is was a poor investment, and (3) 12%
preferred a different recreational item over a spa. Consumers would rather do exterior
renovation, add a room, buy new appliances, or buy new furniture instead.
Marketing Strategy: First of all, the fact that 27% of the people never even considered
buying a spa means that manufacturers have not been doing their marketing jobs. It is the
manufacturers’ job to provide mass marketing support for their brand. You should ask for
co-op dollars from your manufacturer using this statistic as a basis for your argument.
Secondly, you might partner with home improvement stores and furniture stores to do
some joint promotions. Perhaps these may be good places to display some of your spas (if
they don’t carry a line themselves) or leave some Special Reports and give the stores a
commission for generating leads.
Statistic #4: Consumers get the same warm feelings from activities such as (1) riding in a
convertible car with the top down, (2) riding on a Harley Davidson motorcycle, (3) using
a warm electric blanket, (4) dinner by candlelight, (5) sitting in front of a fire in the
hearth, drinking wine and listening to music, and (6) getting a massage.
Marketing Strategy: Businesses that provide these experiences have customer lists too
and would make excellent joint venture partners for doing endorsement offerings. By
endorsement offerings, I mean that you could talk to the owner of the local Harley
Davidson store and ask him if he would be interested in doing a direct mailer to his
customers endorsing your spas and store. You could also do a direct mailer to your
customers endorsing Harley Davidsons and his store. You could do the same for
expensive restaurants and massage clinics in the same zip codes as your customers.
Statistic #5: 65% of all spa owners said that they thought spas were a great way to relax,
and 23% mentioned that they received medical or therapeutic benefits. 24% of spa
owners said that their spas were difficult to clean and maintain and 6% said that they
didn’t think the chemicals were safe.
Marketing Strategy: If 65% of spa owners said they like the relaxation they received
most from their spa then that needs to be a key marketing message to your customers. As
a matter of fact you should contact your customers and get testimonials that reinforce that
fact and the therapeutic benefits they receive.
In your marketing messages you should also try to portray a man getting home from work
exhausted and jumping into his soothing spa to relax after his high-stress job. Remember,
it’s the man of the house who comes up with the idea to get a spa.
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You might also craft a message, and probably even a script that your sales people would
have to memorize, to counteract the objections that may arise as a result of spas being
hard to maintain.
Statistic #6: Statistics say that there are more skeptics than believers when it comes to
spas. Over 51% aren’t convinced a spa could benefit their lives. The statistics also
revealed that those skeptics tend to be older.
Marketing Strategy: The only way to overcome skepticism is to educate your consumer.
Consider developing Special Reports that talk to and prove the fact that spas not only will
improve your health, but your happiness too. Include lots of testimonials from older
people attesting to that fact to provide social proof.
You might also dig up some statistics of older people whose health has improved as a
result of spa hydrotherapy. You might be able to find this information with associations
for the physical therapist industry and the medical industry in general.
Statistic # 7: Forty-five percent of potential spa buyers used the Internet to gather
information about spa products and services before they purchased. This statistic was
drawn from a 1998 study so it most assuredly is higher now.
Marketing Strategy: If you know that potentially half of your customers went to the
Internet to get information before they ever walked into your store, you should, first of
all, make sure you have a website, and second, make sure you have a lot of consumer
information on it that your prospect will find interesting. You might also consider giving
away your hottest free reports (but only after your prospect gave you their email address).
Statistic # 8: Consumers’ top three rational reasons for purchasing a spa were relaxation,
therapeutic benefits, and year-round pleasure. The top three emotional reasons were
conversations, relationships with loved ones, and the desire to unwind and regroup their
thoughts.
Marketing Strategy: Of all the statistics in this study, this is perhaps the most important,
because it helps you understand why your customers purchase spas. After all, consumers
purchase as a result of their emotional responses. They react to primary obvious benefits,
and they also react to hidden emotional benefits.
With the information you gleaned from this statistic, you should consider writing a press
release with the headline, “Rescue Your Marriage Using This Little Known Secret.” The
article could go on to talk about how marriages are breaking up right and left and the
number one reason from a woman’s point of view is lack of conversation. Then you
could talk about how little husband and wives communicate.
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Consider finishing the article telling the readers how regular spa users have quintupled
the amount of conversation in their marriage, and that purchasing a spa has dramatically
improved their relationships and literally saved their marriage in some cases.
Lastly, you should consider offering the reader a free Special Report about how spas can
save their marriages. The number one selling book of the 1990’s was John Gray’s Men
are from Mars, Women are from Venus. Do you think there is a lot of interest in this
subject? YOU BET!
Using Consumer Research to Create Powerful Marketing
Strategies For Any Small Business Industry
You just received eight concrete examples of how you can use consumer research to
develop solid, practical marketing strategies. Although we used examples from the spa
and pool industry, the process used to develop these marketing strategies is the same for
any industry. Some of the strategies may be more practical and successful than others,
and but the fact is that you can glean some very important information from these
statistics and use them to your advantage.
Use research about customers’ purchasing habits from your industry, and start creating
more effective marketing strategies for your small business right now.
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13 Elements Of A Winning Small
Business Advertisement
Nobody can guarantee a winning ad. The only way to know for sure is to test it. But there
are several elements that you can incorporate into your ad or sales letter to give it a better
chance of being a winner. Use these elements as your own personal “winning ad
checklist.”
Element # 1 — Smart Ad Placement
The first step in positioning your ad for success is increasing its chance of being seen by
your target market. Running the world’s best radio ad for your retirement planning
services on a local hip-hop station wouldn’t be a good idea.
Find out what your target market likes (e.g. sports, cooking, business), where they like it
(e.g. car, home, airport), and how they like it (e.g. newspaper, magazine, radio). Until you
know this information, you cannot make smart choices about ad placement, and you’ll
likely end up wasting a lot of your hard-earned dollars on ads that don’t even get seen by
your target market.
Element # 2 — Focus on Your Objective
You’ll never get what you want if you don’t know what that is. This is true for your
personal goals and also your advertising efforts. You must have a specific objective for
your ad if you want people to act. Is it to call your office, come to your store, or go to
your website?
Whatever your objective is, gear all the elements of your ad to persuade consumers to
fulfill it. Suppose you want readers to call your toll-free telephone number, then your call
to action should be “Call our toll-free number now!”
If you include a testimonial, have your endorser say something like, “When I made a call
to their toll-free number…”. Or, you might include copy that says, “One toll-free phone
call can change your life forever.”
Multiple objectives will confuse your prospect, and when people get confused, they
usually do nothing.
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Element # 3 — Irresistible Offer
If you have ever seen the Ginsu knife infomercial, you have witnessed the anatomy of an
irresistible offer. Not only do you get the set of Ginsu knives, but also you get the “magic
shredder”, the “never-dull chopper”, and the “easy egg-slicer.”
BUT that’s not all — you also get the “2-in-1 blade sharpener”, and if you order in the
next 10 minutes you’ll also receive a second set of Ginsu knives! Now that’s an
irresistible offer. Who could resist all these bonuses for the price of one set of Ginsu
knives?
The secret to constructing an irresistible offer is to add valuable bonuses and extend riskfree,
easy-to-pay terms. Continue heaping valuable bonuses on your customer until they
throw up their hands and say, “OK, I give!”
One last thought about your irresistible offer: sometimes you can make your offer so
irresistible that it appears to good to be true. Always give a reason for why you can make
such a great offer. This will add credibility to an incredulous ad.
For example, you might be having a sale that advertises 70% off retail price. When
people see “70% off” many will think that all you have done is boost your price 50% just
so that you can advertise a 70% off price.
But if you tell them you can offer 70% off because the recent hailstorm caused some very
slight damage to your product and you need to liquidate, people can now reconcile your
great offer in their minds so that it makes sense and is believable.
Element # 4 — Unique Competitive Advantage
Why should your prospect do business with you over any of your competitors? Even
those that have lower prices! Do you have a “wider selection than anybody in the tricounty
area”, or do you “deliver within eight hours after the purchase”?
Often your unique competitive advantage is the biggest benefit you can offer your
prospects, so consider including it in your headline, bulleted copy, or your guarantee.
If, by chance, you don’t have at least one unique competitive advantage, then you’d
better get one… fast. Not having a unique competitive advantage with which to show
value results in competing solely on price — and that’s a losing proposition (unless you
have a significant cost advantage).
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Element # 5 — Advertorial Style
Studies have shown that consumers read news articles seven times more than they do
advertisements. It is said that the average consumer is presented with over 3,500
advertisements per day. We have become jaded to promotions and commercials.
Cloaking your ad in a news-style editorial format will not only pull more attention, but
also banish incredibility (which is one of the major roadblocks to consumer response).
“Advertorial” (advertisement — editorial) ads include compelling headlines, lots of
informative, interesting text, quotes, and a judicious use of graphics.
The reason advertorial ads are so compelling is that people are tired of in-your-face sales
ads and prefer the silent, soft sell of an authoritative news article.
Element # 6 — Compelling Headline
Your headline is the most important part of all the technical aspects of your ad. 80% of
the success of an ad can be attributed to its headline. A powerful headline is either, (1)
benefit-driven, (2) news-oriented, (3) curiosity-driven, or (4) how-to oriented.
The following is an example of each:
Benefit-Driven: “You Too Can Have a Slimmer Figure Without Dieting”
News-Oriented: “Amazing New Formula Cures Arthritis Pain”
Curiosity-Driven: “Are You Making These Deadly Hair Care Mistakes?”
How-to Oriented: “How to Flood Your Business with New Customers for Under $50”
It’s a good practice to develop a minimum of 30 variations of your headline before you
select the one you’ll use. Readers satisfy their interests by scanning headlines. If your
headline doesn’t grab attention, your ad will never be read, let alone noticed.
Element # 7 — Sell the Benefits
Your prospects don’t care about you. They don’t care about your awards, the name of
your business, how much you sell, or how good you think you are. They only care about
how you, and what you offer, can benefit them. So leave out all of “me” copy and sell the
benefits. Ultimately people only want two things, (1) to gain pleasure, or (2) to avoid
pain.
Tell people how your offering will help them either gain pleasure or avoid pain by
expressing it in the form of benefits. Don’t confuse this with listing the features of your
product or service. People aren’t concerned as much with features as they are with what
the features will do for them personally.
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To do this, list each of the features of your product and then determine the benefits —the
potential for gain or for avoidance of pain — that your prospects will receive as a result
of each feature. Hint: Studies have shown people respond better to the fear of loss (pain)
then they do to the promise of gain.
Element # 8 — Make it Risk-Free
Consumers are naturally skeptical. With all the scams, rip-offs, and untruthful ads
consumers have been exposed to, who knows what to believe anymore? You must make
your ad credible and risk-free. The good news is that it’s easy to do. Using a combination
of these three strategies will provide a powerful risk-free offer.
Strategy #1 — Use Testimonials
Testimonials from real people are powerful. People don’t like to be guinea pigs. If
they’ve seen that someone else has received the promised benefits, you’ll have
instant credibility. Hint: Including pictures of endorsers will double the
effectiveness of your testimonials.
Strategy #2 — Offer a Strong Guarantee
Provide as strong a guarantee as is absolutely possible. If you can’t provide a
strong guarantee for your product, perhaps you shouldn’t be selling it.
Unfortunately, too many small business people fear that customers will take them
up on their guarantees. Let me ask you… When was the last time you took
somebody up on their guarantee? Seldom are guarantees exercised. Use a
powerful guarantee.
Strategy #3 — Include Facts and Statistics
Use facts and statistics from reliable sources to bolster your claims. People find
comfort in positive, scientific proof.
Each of these strategies will build credibility and reduce the risk prospects naturally feel
when contemplating your offer. Above all, be truthful and honest!
Element # 9 — Call to Action
When someone tells you that they don’t like being told what to do — don’t believe it.
People do want to be told what to do. In fact, people need to be told what to do and when
to do it.
Phrases such as, “Call now”, “Come in today”, and “Sign up right now” trigger emotional
response mechanisms that get your prospect to take action on an offer that they secretly
want to take advantage of anyway. Make your call-to-action explicit and clear, so your
prospect knows exactly what to do.
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Element # 10 — Urgency
Admit it, most people are naturally lazy and like to procrastinate. Without a real or
perceived sense of urgency, your prospects will drag their feet. To compel your prospects
to act immediately you must inject a feeling of “scarcity.”
Scarcity is felt when the supply of either time or product quantity is limited. For instance,
placing a deadline on your offer makes your prospects feel as though they have to take
advantage of your offer before they lose the opportunity. An example of this tactic could
be rescinding a discount offer or a special additional bonus after a specified period of
time.
Another tactic is to limit the quantity available so that people will feel the need to take
advantage of your offer before your product runs out. It’s not unusual to see offers
stating, “while supplies last”, or “only 50 available… first come, first served.”
If you use scarcity tactics (and you should), make sure that you hold true and keep your
word by rescinding the offer when you say you will. If not, you will lose credibility and
the tactic will backfire on you.
Element # 11 — Simple to Respond
Most people buy on impulse rather than logic. If your prospects find it difficult to take
advantage of your offer during their moment of impulse, you will lose sales. Make it easy
to do business with you.
Many people communicate in different ways. Some like to call on the phone, others like
to go to the Web, and still others will only fax you their order. It’s important to offer
multiple methods to contact you, such as telephone, fax, website, cell phone, pager, or
any other communication method.
Studies have shown that people overwhelmingly buy on impulse using the telephone
more than any other method. The same studies show that when you offer a toll-free
number, response rates increase. Finally, if you offer a recorded message with a toll-free
number in which people can hear a message and leave their contact information, response
rates increase even more.
Element # 12 — Graphics
Using a graphic is the first step in a three-step system for getting your audience to read
your ad. The first step is to attract your reader’s attention with an exciting graphic. Step
two is to pull them into your ad with a gripping headline, and the third step is to persuade
them to take action with your copy.
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A good graphic can attract the attention of your prospect and draw them in to your
message. However, a common mistake advertisers make is to add graphics that
overpower the copy, leaving little space to tell their story. Although a picture is worth a
thousand words, it can also be interpreted a thousand different ways, sometimes causing
confusion.
Graphics should draw attention and add to your message. Exciting graphics showing
action are always an eye pleaser. Including someone in your graphic from the target
market you’re trying to reach, actively using your product or service, is also a good
choice that will add to your message.
Element # 13 — Accountability
Small businesses don’t have a lot of money to spend on advertising and, therefore, must
hold their advertising dollars accountable. Without knowing what ads are pulling better
than others, you could be wasting a lot of money.
To avoid losing money, you need to track the response rates of your ads. Instead of
asking your customers where they heard about you, get definitive proof by implementing
a process by which you can track your ads.
For instance, using a separate phone line or extension number for specific ads can help
you determine the source of the inquiry. Another tactic may be to use a unique landing
page on your website for different promotions. If you’re using lead generation by direct
mail, tell the recipient that they need to bring the mailer in to take advantage of your
offer.
If you are using radio or television as your primary medium, offer the audience a special
report (whether it is a paper report, an audiocassette, or a video). This will not only help
you track your response rate but give your prospect a good reason to respond.
Conclusion
As you track your ads, keep the best-pulling ad as your “control” piece. Vary the
different elements of the ad to determine if your new ad pulls better than your control ad.
If it does, make that ad your new control ad.
Although none of these elements alone can guarantee a successful ad, the combination of
these elements will increase the potential for your ad to be a solid winner.
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12-Step Foolproof Sales Letter
Template
You don’t have to be an award-winning copywriter to create effective sales letters. In
fact, writing great sales letters is more of a science than an art. Even the pros use proven
“templates” to create sales letters that get results. The following is a 12-step template for
writing foolproof sales letters.
Overcoming the Hurdles Leading to Buying Resistance
Every person has some form of buying resistance. The objective of your sales letter
should be to overcome your reader’s buying resistance, while persuading them to take
action. I liken writing a sales letter to running a steeplechase foot race. The first one to
the finish line who jumps over all the hurdles is the winner, or in this case, gets the sale.
Whether you’re giving a sales presentation in person or on paper, the process of
overcoming the hurdles leading to buying resistance are much the same. These hurdles
are manifested in many spoken and unspoken customer comments such as:
1. “You don’t understand my problem”
2. “How do I know you’re qualified?”
3. “I don’t believe you”
4. “I don’t need it right now”
5. “It won’t work for me”
6. “What happens if I don’t like it?”
7. “I can’t afford it”
Results-oriented sales letters will need to address some or all of these objections to be
effective. The 12-step sales letter template is designed to overcome each of these
objections in a careful, methodical series of copywriting tactics. The 12 steps are:
1. Get attention
2. Identify the problem
3. Provide the solution
4. Present your credentials
5. Show the benefits
6. Give social proof
7. Make your offer
8. Inject scarcity
9. Give a guarantee
10. Call to action
11. Give a warning
12. Close with a reminder
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Each of these 12 steps add to reader’s emotions while calming their fears.
Motivation Is An Emotional Thing
It’s important to remember that people are motivated to buy based on their emotions, and
that they justify their purchase based on logic only after the sale. This means that each
step in the sales letter process must build on the reader’s emotions to a point where they
are motivated to take action.
That being true, there are only two things that truly motivate people — the promise of
gain and the fear of loss. Of the two, the fear of loss is the stronger motivator.
Think about it.
Would you rather buy a $50 course on “How to Improve Your Marriage” or on “How to
Stop Your Divorce or Lover’s Rejection?” I have empirical data that proves that the
second title outsells the first 5 to 1. Why? Because it addresses the fear of loss.
Underlying the promise of gain and the fear of loss are seven “universal motivations” to
which everyone responds. Whatever product or service you are selling, you need to
position it so that its benefits provide one or more of these universal motivations:
1. To be wealthy
2. To be good looking
3. To be healthy
4. To be popular
5. To have security
6. To achieve inner peace
7. To have free time
8. To have fun
Ultimate motivations are what people “really” want. Your product or service is just a
vehicle to providing these benefits, so make sure your sales letter focuses on these
motivational factors.
The 12-Step Foolproof Sales Letter System
Now that we know what impedes a person to buy and what motivates a person to action,
let’s review the 12 elements of a winning sales letter.
1. Get Attention
Assuming the reader has opened your envelope, the next step is to get their attention. The
opening headline is the first thing that your reader will look at. If it doesn’t catch their
attention you can kiss your letter goodbye. People have a very short attention span and
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usually sort their mail over the wastebasket. If the headline doesn’t call out to them and
pique their interest, they will just stop and throw your letter away.
The following are three headline generating templates that are proven to get attention.
“HOW TO _____________________”
People love to know how to do things. When combined with a powerful benefit the “How
to” headline always gets people’s attention. In fact, they’re probably the two most
powerful words you can use in a headline.
“SECRETS OF _________________ REVEALED!”
People always want to know “insider secrets.” We love to know things that other people
aren’t privy to. Knowledge is power and those who have it feel powerful. Besides that,
most of us enjoy a good mystery, especially in the end when the “secret” is revealed.
WARNING: DON’T EVEN THINK OF ___________ UNTIL YOU ___________.
Remember that people are motivated by fear of loss more than the promise of gain? Well,
the “warning” headline screams fear. The word “warning” demands attention and
combined with something of interest to the reader, is a very powerful headline.
2. Identify the Problem
Now that you have your reader’s attention you need to gain their interest by spelling out
their problem and how it feels to have that problem. The reader should say to himself,
“Yeah, that’s exactly how I feel” when he reads your copy. In fact, you shouldn’t stop
there. Pretend that it’s an open wound that you’re rubbing salt into.
This technique is called, “problem — agitate.” You present the problem then agitate it so
that your reader really feels the pain and agony of the situation. People are such strong
creatures of habit that we rarely change our ways unless we feel great amounts of pain. In
fact, companies are no different. Most businesses trudge along doing the same old thing
until things get so bad that they have to make a change.
For example, if you were selling garage door openers you might agitate the problem by
telling a short story about what happens when one doesn’t work.
“There’s nothing worse than getting home in the evening and not having your garage
door open. It’s dark outside and after tripping on the porch step you search for your front
door key.
Finally, you find it only to scratch your new front door up trying to find the keyhole.
Exhausted, you get inside and plop down on the couch, just as you remember your car is
still running in the driveway….”
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In this scenario the problem was a faulty garage door opener and the agitation is all the
terrible things that happen because of it.
3. Provide the Solution
Now that you’ve built your readers’ interest by making them feel the pain, it’s time to
provide the solution. This is the part of the sales letter where you boldly stake the claim
that you can solve the reader’s problem.
In this section you will introduce yourself, your product and/or your service. Relieve the
reader’s mind by telling them that they there’s no need to struggle through all their
problems because your product or service will solve them.
4. Present your Credentials
In most cases, after you have introduced yourself and your product or service your reader
is thinking, “Yeah, sure he can fix my problem. That’s what they all say.” So now it’s
important to hit them right away with the reason why you can be trusted.
List your credentials including any one of the following:
1. Successful case studies.
2. Prestigious companies (or people) you have done business with.
3. The length of time you’ve been in your field of expertise.
4. Conferences where you have spoken.
5. Important awards or recognitions .
Your readers should get the impression after reading this section that “you’ve been there
and done that” with great success, and that they can expect the same results.
5. Show the Benefits
Now it’s time to tell your reader how she will personally benefit from your product or
service. Don’t make the common mistake of telling all about the features of your product
without talking about the benefits. As I already stated, people are interested not so much
in you, or even your product or service, but what it will do for them.
Get a piece of paper and draw a line down the center of the paper. Now write all the
features of your product or service on the left. Think about the obvious benefits and notso-
obvious benefits of each feature and write them down on the right side of the paper.
Most of the time your product will have hidden benefits that people won’t naturally think
of.
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For example, a hot tub not only soothes and relaxes your muscles but it also gives you an
opportunity to talk to your spouse without interruptions. The hidden benefit is greater
communication with your spouse — and ultimately a better marriage!
Bullet point each benefit to make it easier to read. Think about every possible benefit
your reader may derive from your product or service. In many cases, people will buy a
product or service based on only one of the benefits you list.
6. Give Social Proof
After you’ve presented all your benefits the reader will again begin to doubt you, even
though they secretly want all your claimed benefits to be true. To build your credibility
and believability present your reader with testimonials from satisfied customers.
Testimonials are powerful selling tools that prove your claims to be true. To make your
testimonial even more powerful, include pictures of your customers with their names and
addresses (at least the city and state).
You might even ask if you can use your testimonial customers’ phone numbers. Most
readers won’t call but it is a powerful statement to include complete contact information.
It demonstrates that you are real and so are the testimonials.
7. Make Your Offer
Your offer is the most important part of your sales letter. A great offer can overcome
mediocre copy, but great copy cannot overcome a mediocre offer. Your offer should be
irresistible. You want your readers to say to themselves, “I’d be stupid not to take
advantage of this deal.”
Your offer can come in many different formats. The best offers are usually an attractive
combination of price, terms, and free gifts. For example, if you were selling a car your
offer might be a discounted retail price, low interest rate, and a free year of gas.
Hint: When developing your offer you should always try to raise the value of your offer
by adding on products or services, rather than by lowering your price. Include vivid
explanations of the benefits of the additional products or services you are offering in
order to raise the perceived value of your offer.
8. Give a Guarantee
To make your offer even more irresistible you need to take all the risk out of the
purchase. Remember, that people have a built-in fear that they are going to get ripped off.
How many times have you purchased a product and got stuck with it because the
merchant wouldn’t give your money back?
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Give the absolute strongest guarantee you are able to give. If you aren’t confident enough
in your product or service to give a strong guarantee you should think twice about
offering it to the public.
In reality, almost all small businesses already have a very strong guarantee, but don’t
realize it! If you had an irate customer that wanted their money back would you just say,
“No, I’m sorry. I will not give your money back?” Probably not. If they insist on getting
their money back, in most cases you’ll give it back to them.
You see, most businesses already have a strong guarantee and don’t hold it up and
trumpet it for fear that a lot of people will take them up on it. That’s simply doesn’t
happen. When was the last time you asked for a full refund on something? If you’re like
me, it’s been a while.
Here is an example of a guarantee that I give for one of my products:
* * “100%, No Questions Asked, Take-It-To-The-Bank Guarantee” * *
I personally guarantee if you make a diligent effort to use just a few of the techniques in
this course, you’ll produce at least $4,490 profit in the next 12 months. That’s right,
$4,490 extra profit you never would have seen without this course. If you don’t, I’ll
refund the entire cost of the course to you.
Actually, you get double protection. Here’s how. At any time during the 12
months, if you sincerely feel I fell short in any way on delivering
everything I promised, I’ll be happy to give you a complete refund. Even if
it’s on the last day of the twelfth month!
This guarantee extends for an entire year and they will receive specific benefits (in this
case it’s money). It they don’t get what they expect, they get their money back with no
questions asked. This virtually eliminates all the risk for the buyer.
Hint: Your offer may be so good that people won’t believe it. You’ve heard the old
axiom, “If it’s too good to be true, it probably is.” To avoid this thinking, give the reason
why you can give such as great offer. For example, you might have goofed when
ordering inventory and now you’re overstocked and that’s why you can offer such a great
price. When people read the reason why, it will help them reconcile your irresistible offer
in their mind and make it more believable.
9. Inject Scarcity
Most people take their time responding to offers, even when they are irresistible. There
are many reasons why people procrastinate on investing in a solution. The following are
just a few:
- They don’t feel enough pain to make a change
- They are too busy and just forget
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- They don’t feel that the perceived value outweighs your asking price
- They are just plain lazy
To motivate people to take action they usually need an extra incentive. Remember when I
said that people are more motivated to act by the fear of loss rather than gain? That’s
exactly what you are doing when you inject scarcity into your letter.
When people think there is a scarce supply of something they need they usually rush to
get some of it. You can create a feeling of scarcity by telling your reader that either the
quantity is in limited supply or that your offer is valid for only a limited time period.
Your offer could sound something like this:
“If you purchase by (future date) you will get the entire set of free bonuses”
Or
“Our supply is limited to only 50 (product or service) and will be sent to you on a ‘first
come, first served’ basis. After they are gone there won’t be any more available.”
Or
“This offer is only good until (future date) after which the (product or service) will return
to its original price.”
One word of caution: If you make an offer you need to live up to it. If you go back on
your word after the deadline date you will begin to erode the trust and confidence your
customers have come to expect from you.
10. Call to action
Do not assume that your reader knows what to do to receive the benefits from your offer.
You must spell out how to make the order in a very clear and concise language. Whether
its picking up the phone and making the call, filling out an order form, faxing the order
form to your office etc…. you must tell them exactly how to order from you.
Your call to action must be “action-oriented.” You can do this using phrases like ‘Pick
Up the Phone and Call Now!” or “Tear Off the Order Form and Send It In Today!” or
“Come to Our Store by Friday and …” Be explicit and succinct in your instructions.
Plant your call to action throughout your letter. If you are asking the reader to call your
free information line then perhaps some of the testimonials might say, “When I called
their free information line”. Or in your offer you might say, “When you call our free
information line…” Then when you give the call to action at the end of the letter, people
won’t be surprised or confused. It will be consistent with what you said all throughout
your letter.
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11. Give a Warning
A good sales letter will continue to build emotion, right up to the very end. In fact, your
letter should continue to build emotion even after your call to action. Using the “risk of
loss” strategy, tell the reader what would happen if they didn’t take advantage of your
offer. Perhaps they would continue to:
- Struggle day to day to make ends meet
- Work too hard just to get a few customers
- Lose the opportunity to receive all your valuable bonuses
- Keep getting what they’ve always got
- Watch other companies get all the business
- Etc.
Try to paint a graphic picture in the mind of the reader about the consequences of not
taking action now. Remind them just how terrible their current state is and that it just
doesn’t have to be that way.
12. Close with a Reminder
Always include a postscript (P.S.). Believe it or not, your P.S. is the third most read
element of your sales letter. I’ve seen good copywriters use not just one postscript, but
many (P.P.S). In your postscript you want to remind them of your irresistible offer. If
you’ve used scarcity in your sales letter, include your call to action then remind them of
the limited time (or quantity) offer. It sounds like a simple step but postscripts get
noticed.
Voila! You now have a powerful sales letter. Using this 12-step formula anyone can write
an effective sales letter that sells. The following are a few extra tips to help you write an
even better sales letter:
Tip #1: Write the Features/Benefits — The biggest hurdle to writing a great sales letter is
just getting started. Many people have a fear of writing. One way to get your letter started
and develop a helpful guide for your letter is to write a feature/benefit list.
Take a set of 3 x 5 cards and write all the features you know about on one side of the
cards. Then turn the cards over and write a benefit for each feature. You’ll have started
your letter and produced a list of benefits you can use to write it.
Tip #2 — Once you have completed the letter, let it sit for a day or so. This will allow
you to be more objective you when you edit your letter. If you’ve just spent the last few
hours working on it you will find it hard to catch the mistakes or edits in the letter
because you’re just too close to it.
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Tip #3 — Develop a “swipe file” to help get your creative juices flowing. When you see
a great ad or receive a particularly effective letter in the mail, keep it in a file that you can
refer back to again and again. Companies pay thousands of dollars to develop their
marketing materials; you might as well take advantage of that by using them as a model
for your own work.
Tip #4 — Before you start writing your sales letter, develop a customer profile sheet by
documenting every thing you know about your target customer. Some great copywriters
put a picture of a typical customer in front of them as they write to help them remember
to whom they are writing the letter.
Tip #5 — I often get the question, “How long should my sales letter be?” and my answer
is, “As long as it needs to be.” Each part of your sales letter should be building your case.
If it takes multiple pages to build your case, then that’s how long your letter should be; I
use a 24-page sales letter to successfully sell one of my products.
Most anyone can write a powerful sales letter by just following this simple 12-step
process. Make sure that you include each of the steps because each step builds your case
in a unique way and adds to the reader’s emotions.
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Telephone Success Strategies for
Small Businesses
The other day I was in an auto parts store buying an oil filter. It was on a Saturday
morning and there were only two workers on duty. The place was packed and the line to
purchase goods was long, and most of the people were getting impatient.
Suddenly, the phone started ringing and the worker seemed very irritated. Finally, after
about 10 rings he got frustrated and answered the phone. He was rude and brief while he
reluctantly answered the caller’s question. As soon as he could, he slammed down the
phone and resumed his behind-the-counter duties.
This episode occurs millions of times a day around the small business world. It’s not only
confined to the retail world but the professional world as well. Too many small
businesses see phone calls as interruptions rather than opportunities.
You Pay Good Money to Make Your Phone Ring!
A ringing phone is the result of your marketing efforts, which you pay good money to
develop and implement, and the fact that your phone rings indicates that your marketing
is working. Don’t squander your hard-earned marketing dollars (and reputation) by
underestimating the value of each phone call.
The following are several inbound and outbound telephone marketing practices that you
can use to make your phone one of your most powerful marketing weapons.
Stress the Value of Each and Every Phone Call
1. Know Your Costs — Calculate your cost of an inquiry by dividing your total cost of
advertising by the average number of calls you receive. For instance, if you spend $5,000
monthly on advertising, and get about 500 calls, each call cost you $10.
To further stress the value of each phone call, attach a $10 bill to the handle of each
phone unit to remind your employees how important each and every phone call is to your
business, and that each call could result in cash.
2. Recognize Good Work — Give a “golden phone award” to the employee who gets
full contact information from the most inbound callers. Spray paint a phone gold and give
it out at an employee meeting with a free dinner for two or weekend at a local hotel.
3. Train Employees — Include telephone training in your sales meetings. Ask
employees (rather than you) to give the training. Supply your employees with access to
professional telephone training systems for reference.
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Get Each Caller’s Full Contact Information
The value in any business is its customer and prospect list, and the fastest way to build
that list is to ask for contact information.
1. Customer Information — Ask to know if the caller is a prior customer. If they are
then say, “Mr. Customer, we are updating out customer list. Would you mind giving me
your address and phone number so that we can update our records?
2. Prospect Information — If the caller tells you that they are not a prior customer then
handle the phone call. At the end of the call say, “Mrs. Prospect, I’d like to send you a
free report that you’ll find very interesting. It will help you … If you give me your
address and I’ll send it out to you today.”
3. Email Address — To get a customer or prospect’s email address (critical!) offer the
customer a second free gift that you can email to them right away, and then ask for their
email address. Getting prospect and customer email addresses is important because you’ll
be able to market to them absolutely free.
Have A Reason to Call Prospects
Have you heard? Cold-calling doesn’t work — but “warm-calling” does. Warm-calling
happens when you call someone who has already had some type of experience with you.
Whenever you call a prospect, have a valid reason to call.
1. Direct Mail Follow Up — Send a direct mail piece to a prospect or customer and
follow up by asking them about, “the free report you sent them three days ago” or the
“newspaper article you recently sent them.” You can even call them up in advance just to
let them know your direct mail piece is coming (this is better done with voice
broadcasting).
2. Use a Familiar Name — Try to get the name of someone familiar that you can use to
open the conversation. For instance, “Hi Ms. Prospect, my name is Denise and I’m
calling from Spa City USA. I was speaking with John Richter yesterday and he
mentioned that I might want to call you…” (Hint: always get permission from the referrer
to use their name)
Listen Carefully While On the Phone
People call you because they want something. Let me say that again. People call you
because they want something. They might want a price, an explanation, to report a
problem, to speak with a manager etc. Whatever the case may be, they want something.
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The key to selling is to give people what they want. What better time to listen to what
somebody wants than when they call you up? If you listen well enough, your prospects
will tell you just what you need to know to sell them your product or service.
1. Ask Open-Ended Questions — Questions such as, “Why are you looking for (product
or service)?” evoke free-wheeling responses that contain valuable information. Ask
questions that start with, “Why…”, “What are your thoughts…”, “Tell me about…”, or
“What was your impression…”
2. Wait For a Response — A common mistake with phone marketers (inbound or
outbound) is that they feel the need to talk. Remember, when you’re talking, the customer
isn’t. You should do 20% of the talking and let the customer or prospect do 80%. Don’t
be afraid to leave dead space on the phone while you’re waiting for a response. Ask an
open-ended question then be quiet and listen.
3. Listen Carefully for Pain, then Quantify It and Solve It — People have a natural
tendency to complain about problems. As a marketer, this is your key to success, because
the reason people are complaining about problems is because they’re looking for a
solution, even though they may not ask for one.
Listen for a problem that is causing your prospect pain, then try to quantify it. Find out
just how bad the pain is by turning it into numbers. For instance, your prospect may tell
you she has back pain. Your response could be, “On a scale from one to ten, ten being
excruciating, how bad is your back pain?”
Or if your prospect’s inventory is being stolen, a possible response may be, “What is the
dollar cost of inventory that is missing per store? How many stores are experiencing this
same problem? Then this problem is costing your business $XX dollars.”
Now solve your prospect’s problem by keying in on the solution to their pain. “Ms.
Smith, most of our customers experience back pain just like yours, some even worse.
Most have found relief within 30 days or less using (product or service).”
Turn Price-Checkers Into Value-Seekers
One of the most common challenges to telephone marketing is how to handle pricecheckers
— people who call you up just to get a price. This is especially dangerous if
they have not yet received enough information to determine value.
It leaves you to compete on price alone. This leaves you at a disadvantage unless you sell
a bottom-end, cheap-as-dirt product. If you do, hopefully you have a cost advantage over
your competitors.
Perhaps the most detrimental result of giving out your price over the phone is that you
have just taken away the single most powerful motivation for people to come into your
business and speak with you personally. You’ve just set yourself up to be price-shopped.
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1. Ask Probing Questions — The secret to handling price-checkers is to ask them openended
probing questions. For instance,
Caller: “Hi, what’s your price on the platinum pool?”
You: “Well, what type of pool are you looking for?” or “It depends, what types of
features are you looking for?”
These responses lead you into “value discussions” that help you to build the value of your
products or services in the mind of a prospect. Remember, if you can’t build value then
all you have to compete on is price, and this is rarely a winning proposition.
2. Use the Compare / Contrast Principle — Earlier I told you to quantify the pain your
prospect is experiencing. If you’ve done this right, the dollar amount of the pain will be
very large compared with the price of your product or service. In comparison, people will
see the price of solving their problem as very low in contrast to what their problem is
costing them.
Remember: If you feel the need to give out a price or estimate over the phone, do so only
AFTER you’ve had a conversation about value using the compare / contrast principle.
Always Ask for An Appointment
A phone call without an appointment is like a website without visitors. Why work to
make your phone ring if you’re not going to try and get an appointment? You should ask
for an appointment on most every call.
1. Give Your Caller a Reason — It’s much easier to ask for an appointment when there
is a valid reason to meet. You might say, “I’d like to show you one specific technique we
use to reduce costs that many of our customers are getting great results from. I’d like to
meet with you this week to demonstrate how this technique works.”
2. Be Sensitive To Their Time Constraints — People are busy and don’t want to be
bothered, so you always need to openly recognize the value of their time. For instance,
using the previous example you might say, “I’d like to meet with you this week to
demonstrate how this technique works. I know your time is valuable and I want to honor
that. Our meeting would only last for 15 to 20 minutes.”
3. Tie Down a Time By Limiting Their Options — Give your prospect only two
options for meeting times. First of all this forces your prospect to think about WHEN
they can meet rather than IF they want to meet with you. Secondly, it makes it a simple
no-hassle scheduling process.
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Again, following up from the last example you could say, “Our meeting would only last
for 15 to 20 minutes. I have a time slot open on Wednesday at 3:45 pm or Thursday
morning at 11:15 am. Which is better for you?”
Use Benefit-Oriented After-Hours Voicemail
There’s no better time to market to somebody then when they are waiting to speak to you.
Instead of telling the person waiting on the phone about how great you are, help them to
solve their problems. Here is a typical message that I hear often: “Thanks for calling
ABC Pools. Our store hours are from 9:00 a.m. to 6:00 p.m. Please call back during our
normal business hours. Thank you.” Click.
1. Offer a Free Report — Consider putting a recording similar to this on your message
system:
“Thanks for calling ABC Pools, with the only pool that provides a maintenance-free
sparkling pool water system. If you’ve reached this message we are probably gone for the
day. We apologize and want you to know that you are important to us. Feel free to call
our 24 hour free recorded message at xxx-xxx-xxxx to hear “The Six Secrets to Building
Your Own Pool.” Leave your name and number at the sound of the tone and we’ll call
you as soon as we possibly can. If you don’t leave your name and number we won’t be
able to enter you into our drawing for a free trip to Las Vegas. Thanks again for calling
ABC Pools.”
2. Send a Postcard — Another idea is to talk to your phone company about hooking up a
caller ID so that you can get their phone number with a reverse phone number look up
that can be found on the web.
If you get their address in this manner, immediately send a postcard out to them thanking
them for their inquiry and inviting them to come in or receive a free report. If they are
calling you and they are a prospect, it means that they are in the market and will probably
make a decision soon, so the postcard needs to go out quickly.
Conclusion
Your telephone can be a powerful marketing tool if it is used correctly. With some knowhow
training you’ll be able to see results immediately. A great website for learning more
about how to use your phone to make profits is www.BusinessByPhone.com owned by
Art Sobczak, an author and expert in telephone marketing.
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How to Price Your Product or Service
for Maximum Profit
Often the difference between a winning product and a loser is how you price it. Sales
tests have shown that price is one of the most compelling factors that determine the
success of a sale. Readership surveys have shown that readers will often skip copy just to
get to the bottom of the advertisement to find out the price.
The Four P’s of Marketing
For those of you who have studied marketing in school, you’ll remember the Four P’s of
Marketing: (1) Product, (2) Place, (3) Promotion, and (4) Price. These four elements of
marketing together determine the success of your product or service.
When determining a strategy for a profitable business you should ask yourself four
critical questions as a result of the Four P’s…
How can I improve my product?
How do I get it from point A to point B?
How do I tell people about it?
How much should I charge for it?
The first three questions all have a cost associated with them. Only the fourth question
actually determines how much money you’ll bring in. So pricing is a critical question that
should be considered carefully.
What Is Your Objective?
When pricing your product or service you must always have an objective in mind.
Knowing your objective will have a huge impact on the final price you set. It is true that
the ultimate objective of your price is to make the most money possible. However, there
are different routes to reach that objective.
For example, the following are six pricing strategies to meet certain objectives. Each
strategy will, perhaps, result in a radically different price to meet the objectives of the
business.
Strategy #1 — Pricing low to penetrate the market and gain customers.
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Objective — Perhaps you’re just entering the market with a new product and you want to
gain as many customers as possible.
When to Use — If you have a big “back-end” product that you plan to sell as a follow up
to the lower priced “front-end” product. Or it might be that you have a consumable
product that people will buy over and over again so you want to gain customers, get them
hooked on your product or service, and then slowly raise the price.
——————————-
Strategy #2 — Pricing high to skim maximum profits.
Objective — To gain the maximum amount of profit per unit in the shortest amount of
time.
When to Use — When your product is unique and new with no competition and you have
a short window to skim the maximum profits before knock-offs start flooding the market.
——————————-
Strategy #3 — Pricing low to crush the competition.
Objective — You want to squeeze your competition out of the marketplace so they no
longer compete with you.
When to Use — Your product is a perceived commodity and you have one or two
competitors with which you are constantly having price battles. (By the way, technically
this practice is illegal)
——————————-
Strategy #4 — Pricing to make a “normal” profit.
Objective — To set a price that is seen by your customer as honest and reasonable.
When to Use — You may be on contract (such as a government contract) with a customer
that you have a long-term relationship with and whose trust you value immensely (and
who does periodic audits on your books). In this case you might use a cost-plus pricing
strategy.
——————————-
Strategy #5 — Pricing to the market to be competitive.
Objective — When you want your stay competitive and be considered for any proposal,
bidding, auction or other competitive pricing situations.
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When to Use — When your product is very similar to your competitor’s and you are
limited in the methods you can use to differentiate it.
——————————-
Strategy #6 — Pricing for maximum profit and maximum sales.
Objective — You want to get the maximum amount of profit possible but not at the
expense of losing customers.
When to Use — After your initial introduction and you have the ability to differentiate
your product.
Hopefully after reviewing these six strategies you realize that your price is not just a
function of the cost to produce your product or deliver your service but is more a function
of what you’re trying to achieve.
Pricing Myths Exposed
There are a lot of myths out there about pricing your product or service, and some fly
directly in the face of popular thinking (and what I’ve stated in the previous section).
Myth # 1 — Price is the consumer’s most important buying criteria.
Truth — Yes, price is important but it is no way the most important criteria for a shopper.
I’ve never seen one study that has shown price to be the most important buying criteria
for a consumer. In fact, most studies I’ve reviewed show price to come up around fourth
place on the importance list.
Just look at those who pay exorbitant prices to buy brand clothing such as Ralph Lauren
or Tommy Hilfiger. How about those who buy goods at the local gas station or 7-11 store
whose prices are astronomical? Remember the Cabbage Patch Doll or the Tickle-Me-
Elmo craze? Prices went sky-high because the demand was so high for them.
Even if you have a product that you think is a commodity, there are a myriad of other
ways to differentiate your product or service so that you can charge a higher price (which
leads me to the next myth).
Myth # 2 — You have to match or slightly under-price your product or service in a
commodity driven or competitive market.
Truth — There are so many ways to differentiate your product or service that it baffles
me why businesses continue to believe this myth. Here are just a few ways you can
differentiate yourself:
• Specializing in a particular niche
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• Adding bonuses or premiums
• Delivering it faster
• Touting your experience or credentials
• Showing successful case studies
• Having others testify to your differentiation
• Limiting distribution or accessibility
• Partnering with heavy-hitters
• Having extreme guarantees
• Etc. etc. etc.
There are a myriad of ways to differentiate your product or service. All it takes is a bit of
creativity and some good marketing. You should never have to just accept the prevailing
price of a product. Price-takers get eaten up and spit out. Price-makers spend their
vacations in Hawaii.
Myth # 3 — Pricing is a simple matter of taking the cost of your product or service
and marking up your desired profit margin.
Truth — The fact is that most businesses don’t know their costs, so even if they wanted
to do cost-plus pricing they couldn’t. If you don’t know your cost how can you “mark
up” your price? In addition, the cost-plus price may have nothing to do with the value
you provide or the market price of your product or service.
Even though you may not be able to determine your price, you should be able to
approximate it. It’s better to be approximately wrong than to be precisely right. In any
pricing scenario, you must know the approximate cost of your service so that if you are
losing money, at least you know it and it is part of your strategy.
Myth # 4 — If sales are lagging just drop your price and sales will increase.
Truth — Just open the paper and count the number of times you read the word “sale.”
The truth is that people do put a high value on price but they also put a high value on
quality, and when you lower your price you cheapen the perception of your quality.
If you lower your prices just to increase sales you should have a good reason. If you
believe you’ll be able to up-sell your new customers or you believe that can “back-end”
them with bigger offers, then your strategy is justifiable. But if you just lower your prices
to increase sales you could be just speeding up your losses.
Price is a Perception of Value
It’s important to remember that you must sell your product or service at a price that is
higher than your cost to produce and promote it. That’s called a profit. But perhaps even
more important is knowing this — your customer will only buy your product or service if
they determine that its perceived value exceeds the price they have to pay to receive it.
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Price is about perception of value and has little to do with actual value. The whole goal of
your marketing efforts is to spread the word and convince people that the value is higher
than the price they are being asked to pay.
I’ll never forget a story I once heard about a fellow who approached the legendary
marketer/copywriter Gary Halbert to ask about the seemingly high price he was planning
to charge for his new product. He asked Gary, “Do you think people will pay $XX dollars
for my new widget?” Gary’s reply is profound and something you should always
remember. He said, “I don’t know. How good is the sales letter?”
I love this story because it summarizes everything that is great about the power of good
marketing. Your product or service’s price has nothing to do with its actual value. It has
everything to do with it’s perceived value and how well you can build that perception in
the mind of a prospect using effective marketing.
Testing Price Points
All the price theory in the world won’t tell you what your optimum price is until you let
consumers test it with their wallets. I remember Mark Nolan, author of The Instant
Marketing Plan once telling a story about how he sold 100,000 copies of a book on free
publicity he’d written for $29 a piece.
After selling a ton of these books he had a conversation with another marketer who asked
him if he had tested his price at $49. Mark just stared at him as he realized that he’d been
so busy selling his book — and things were going so well — that he hadn’t tested his
price.
You should consider starting your test with four price points:
1. What you think should be the price.
2. The highest possible price you can imagine, but one to which you think that
consumers would still respond.
3. A low price that is a great deal for the customer, but less than you want to charge.
4. A fourth price that is outrageously high or low.
Holding everything else constant, determine the sales from each price point. You’ll
probably find that the price that obtains the maximum sales and profitability is higher
than what you had originally intended.
You might also consider price-testing a combination offer. By this I mean: what
combination of items can you offer for the maximum sales at the highest price? This may
be more difficult in the real world but on the Internet it is simple.
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Just send one stream of prospects to a page with one combination and price and send a
second set of prospects to a second page with a different combination and price. The
combination could include different products bundles, different guarantees, different
service features etc.
Teeter Price and the Six Questions
Ken Evoy, coauthor of Make Your Price Sell, an online price determination product,
invented the term “Teeter Point,” which he has even trademarked. The teeter point is the
price at which a consumer just can’t make up their mind. It’s the point at which if the
price was raised a dollar you’d lose the sale and if it was dropped you’d win.
The trick of course if find the teeter point. Ken asks two questions to two different groups
of people to find the teeter point.
Question # 1 — What price is almost too high to buy?
Question # 2 — What price is just a bit too high to buy?
If the median for question # 1 is $50 and the median for question # 2 is $45, then your
teeter point is somewhere between $45 and $50.
To determine a consumer’s buying habits Ken has asks two more questions.
Question # 3 — What is the price you usually spend for (product name)?
Question # 4 — How often do you buy (product name)?
This information is important because it helps you determine what a consumer might
expect to pay for your product or service.
Other questions that are asked in Ken’s price survey are:
Question # 5 — On a scale from one to seven, how unique is (product name)?
Question # 6 — On a scale from one to seven, how important is (product name)?
The more unique and important your product and service, the higher the price you can
attach to it.
The last question that is asked is:
Question # 7 — What is a fair price for (product name)?
The respondent will normally answer with a price that is lower than what they truly
consider fair. However, combined with the teeter point questions, you’ll have a good
indication the optimum price you can charge for the most sales.
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Presenting Your Price
Perhaps the only thing more important than setting the right price is how you present it.
The key to presenting your price is to compare it with something that the consumer
perceives as relatively huge.
For instance, the following techniques uses the compare / contrast method to give the
perception that your price is not only fair, but a great deal.
Technique # 1 — Volume Method
Imagine you are selling a course on how to stop smoking. Using this method your copy
would read something like this: “…you’d have to have 12 months of personal smoker’s
rehab counseling to get the same amount of coaching that you’ll find in this course.”
Suppose you are selling taxation consulting you could say “…in just one session you’ll
learn how to save more in taxes than you paid last year to the I.R.S.” Notice how what
you are giving them is compared to a much larger quantity, which has the effect of
making your price seem like a great deal.
Technique # 2 — Monthly Installment Method
Offer to have your customer pay low monthly installments, rather than one hefty price,
then just advertise the monthly installment price. This gives the perception of a low price.
Recently I sold a mobile home and noticed that people didn’t really care about the price
of the home; they were more concerned about the amount of the monthly payments.
Technique # 3 — Individual Value Comparison
This method takes each individual component of the offer, places a value on it, and then
adds it all up for a total and then compares it to the asking price.
For instance, if you were in the hotel business you might say this, “…your luggage
carried to your shuttle van (value — $15), a swift shuttle ride directly to your hotel (value
$35), your personal assistant to help you carry up your baggage and get settled in (value
$10), premium movie channels for your viewing pleasure ($12), a relaxing overnight stay
in your personal suite (value $189), and a hearty breakfast in the morning ($15) for a total
value of over $260…yours for only a small investment of $99. You save over $160!
Technique # 4 — Pain Avoidance Method
As a consultant I often try to put a price tag on the problem to give my client a realistic
picture of what it is costing her to continue to do nothing. Then I compare it to my
relatively small fee for helping to rid her of that problem.
For instance, the conversation might go like this…
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David: “Hmmm, so you have a theft problem in your stores?”
Client: “Yes, it’s terrible”
David: “What types of things are being stolen?”
Client: “Computers and software mostly.”
David: “What do you think the average price is for the computers and software being
stolen?”
Client: “The computers cost around $1,200 and the software costs around $50.
David: “How many are missing on a monthly basis?”
Client: “We usually come up about five computers short and probably about 20 different
software packages are missing.”
David: “Now this is happening in all your stores?”
Client: “Yes”
David: “Well, let’s see. From what you told me you’re experiencing a shrink problem of
around $6,000 per store and you own 12 stores so you’re total shrink is costing you
around 60,000 a month overall.”
Client: “Yes”
David: “So, in a year’s time you could have a million dollar problem.”
David: “Would you be willing to invest $50,000 to get rid of you million dollar
problem?”
Technique # 5 — “Most — Some — But” Method
This technique is a simple competitor comparison that gives the perception of rarity or
exclusivity.
Example # 1 — Nail Salon
At most upscale salons you’ll pay $50 – $100.
In some popular salons you may pay as little as $35 – $40.
But our low preferred customer price is just $19.95.
Example # 2 — Jewelry Store
Many jewelry stores charge $200 – $300.
Some jewelers will offer specials as low as $99.
But, during our Customer Appreciation sale you only pay $67.
This method is used to dramatize the discounts or low price that you offer compared to
other businesses in your market.
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Technique # 6 — “Reason Why” Method
If you charge a very high price or a very low price, it may be a bit hard to believe by
consumers who are used to paying a certain price. Telling the consumer why the price is
so high or so low helps to reconcile the price discrepancy and helps them accept it as
reasonable.
Example # 1 — Inventory Overstock
“Our prices are so low because we goofed on our last inventory order and are now
seriously overstocked. If we don’t sell all our (product) we’ll have to file for
bankruptcy, so we’re clearing out all our inventory at ridiculously low prices.”
Example # 2 — Custom Pool Builder
“Rainey pools recruited a team of the most experienced pool design engineers in
the country to design each and every pool, down to the last nail. No expense was
spared. We have developed the pool industry’s most advanced software at a cost
of over half a million dollars to ensure that the surrounding landscape blends in
with the pool design, to create a complete three-dimensional vision before anyone
even steps foot on your soil. Our advanced planning system takes every
circumstance and detail into consideration to guarantee that your project will be
completed on time and on budget. Lastly, we’ve scoured the eastern seaboard to
find the most experienced pool construction people — whom we pay twice the
industry average to create your backyard masterpiece. With over millions of
dollars worth of experience, research, technology, and quality control, you’ll have
the finest backyard experience available anywhere in the world.”
Pricing Rules for Rounding Off
How you end your price has more to do with human psychology than practicality. People
buy on human emotion rather than rational logic. The following are several rules
developed by price expert Erin Mitchell, President of the Pricing Society (
www.Pricing-Advisor.com).
Tip # 1 — For prices up to $10 use endings such as $.99 rather than $.95. Customer’s
reactions are the same for both price points and the $.99 garners you four more cents.
Also, prices ending in odd numbers such as .34 are confusing to people and may cost you
sales.
Tip # 2 — For prices from $10 to $100 the best ending to use is $.95 rather than $.99
because the $.99 is seen as a “greedy” price.
Tip # 3 — For prices greater than $100 it’s better to present your price in whole dollars
rather than cents. It’s a cleaner look.
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Tip # 4 — Pricing for professional services should be in whole numbers such as $150
rather than $139.95. It’s more professional and promotes dignity and confidence in your
fees and rates.
Advertise Your Price?
I often get the question of whether to advertise price or not. This has been an ongoing
debate for years. I recommend not advertising your price unless it is surprisingly low.
You’re limited as to what you can do to build value in an average size advertisement.
Displaying a high price without first building value is a losing proposition.
If you’re running a sale, just advertise the discount amount rather than the price. For
instance, advertising “20% Off” or “Take $1,000 Off”, rather than showing the actual
price, can get people just as excited as showing a low price — without showing the actual
price.
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Price Gimmicks that Work
All you have to do is open the paper to see a lot of price gimmicks that retailers use to
lure people into their business. I could have listed a dozen gimmicks but I’ve limited it to
five common ones.
1. The $1.00 Gimmick
The $1.00 gimmick is my favorite and is very powerful. It includes advertising a product
for the “almost free” price of $1.00. Tell your consumers to call or come in and find out
how to get your product for only $1.00.
Your average consumer knows that this is a gimmick but it’s so intriguing that many
come in just to see what the catch is. This is especially effective if the $1.00 product has
value. Currently, a friend of mine is offering a marketing course to insurance
professionals for $1.00 using a postcard marketing campaign.
However, to get the marketing course for $1.00 they must purchase his $300 marketing
course. Is it a gimmick? Yes! Is it a good deal? Absolutely! In fact, the $1.00 course is
even more valuable than the $300 course, which is the key to attracting prospects.
2. Bait and Switch Gimmick
First of all the bait and switch gimmick is illegal. Nonetheless, it is still practiced. The
bait and switch gimmick advertises a very low price for a product and then when the
prospect comes in to buy it, the business has “sold out” and the prospect is then steered
toward a higher priced product.
3. The Down Payment/Monthly Payment Gimmick
Car dealerships are famous for using the down payment / monthly payment gimmick. In
fact, I have a newspaper advertisement as I sit here writing that says, “Used Cars to Be
Sold For As Low As $69 Plus TTL. Millions of Dollars in Unclaimed Vehicles.”
Do you believe that this car dealership is going to sell a car for $69? Of course not! The
$69 is a down payment; however, it is presented as the total price of the auto. It is very
convincing and many people flock to these car sales every weekend.
The monthly payment gimmick is done the same way. A low monthly payment is
presented as though it is the entire price of the product.
4. The Free Gimmick
The free gimmick is great for giving away teaser or trial test products without losing your
shirt. If you’ve been watching television lately you’ve probably seen the CEO of the
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Video Professor computer training company. They sell computer training courses on CDROM.
The CEO offers you a free CD-ROM of your choice. He says, “Why am I giving these
away? Because I know if you try just one of my CD-ROM training courses, you’ll come
back for more.” However, in small print you’ll see that he charges $6.95 for shipping.
The $6.95 will not only cover his shipping, but also the manufacturing cost of the CDROM.
He loses nothing in the offer. When you call up (like I did) you’ll find out that
they try to up-sell you like crazy.
5. The Shipping Charge Gimmick
A spin off of the Free Gimmick is the shipping charge gimmick in which a low price is
advertised. But when the order is made an exorbitant shipping fee is charged. So the real
profit is hidden in the shipping fee.
There are no restrictions on how much you can charge for shipping. The higher your
product is priced, the easier it is to hide profit in the shipping fee.
Successful Discounting Strategies
Discounting can be a powerful tool to close the sale. However, it is over-used and
entirely abused. Consumers just expect a discount in our current retail environment.
Instead of discounting, business owners should consider building value through adding
low cost, high value bonuses and premiums to entice customers to buy.
To make your discount even more powerful it should be tied to a deadline. This
introduces a feeling of urgency, which motivates prospects to action.
With that said, let’s review a few successful discounting strategies.
1. New Product Introduction Discount
When introducing a new product you may consider offering it to a select group of
individuals on an exclusive basis. This will jumpstart sales.
You might say something like this, “For the next two days I’m offering this introductory
discount of 40% off exclusively to my current customers. After this introductory period,
you’ll have to buy my product at the regular purchase price of $XX. Hurry and take
advantage of this special exclusive offer right now.”
Or you could introduce it to the customers of a joint venture partner by having your
partner say, “…I wanted to let you in on an exclusive special offer on a new product that
my friend John Doe is coming out with this week. I had to twist his arm to get him make
this offer to my customers. He finally relented. Hurry and take advantage of this deal
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while it lasts. I was fortunate enough to get him to agree to extend to you such a
significant price break.”
2. Quantity-Tiered Discounting
A quantity-tiered discount is one that increases with the volume of purchase. For
instance, if you buy three cans of peanuts you get a 10% discount. If you buy 10 cans you
get a 12% discount. And if you buy 20 or more you get a full 15% discount off the
regular price.
Many consumer goods companies do business this way. Unfortunately it creates erratic
order quantities and makes it difficult to predict future product demand. But that’s
another article.
3. Value Bundle Discount
The value bundle discount offers a lower total price for a bundle of products or services.
For instance, assume you were selling a membership as a preferred customer to your
clothing store you might offer…
A $50 coupon for shirts and slacks. (value = $50)
A $100 coupon for a suit. (value = $100)
One free tie. (value = $25)
One free pair of socks. (value = $8)
One year of free tailoring. (value = unlimited)
The total value of the entire bundle of goods and services exceeds $183. Instead of
offering each of the goods separately you offer the entire bundle in a membership
package for $100. That’s a great value that would be tempting to anyone. But because
your markups are over 100% you still make a respectable profit.
4. Secret Code Discount
The Secret Code Discount is also one of my favorites because it gives a feeling of
intrigue, exclusivity, and excitement. The discount includes offering a coupon or ticket
with a secret code on it. You must go to the business’ website, enter the secret code,
which then takes you to a webpage containing a discount coupon that you can print out
that you carry into the store.
10 “Stealth” Ways to Increase Your Price
Have you ever wanted to increase your prices without increasing your prices? Here’s 10
ways to generate more revenue without making a public price increase announcement.
1. Decrease your level of discounts offered to customers.
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2. Increase your minimum order sizes so that customers will have to meet a higher
minimum threshold to get their discounts.
3. Increase your delivery charge and start charging for any special services related to
delivery.
4. Start invoicing for repairs on serviced equipment.
5. Bill your customer for any engineering and installation services that you
previously included in the purchase price.
6. Raise your prices for overtime on rushed orders.
7. Start aggressively collecting on overdue accounts from the past several months.
8. Shift your sales mix to higher margin products and service and start phasing out
the lower margin items.
9. Begin to write stiff penalty clauses into all your contracts.
10. Decrease the physical characteristics of the product or remove services that you
are now providing and continue to charge the same prices.
Never Compete On Price
Let me first say this, and if you get nothing else from this chapter remember this, “Never
compete on price!” Never, never, never! It’s a losing proposition for you and for your
competitors. OK, there’s always an exception. If you have a substantial cost advantage
that is virtually impossible to duplicate then there might be a case for competing on a
lower price.
What usually ends up happening is after you lower your price, your competitor is forced
to lower their price a little more, then you have to match the lower price and down it
goes. Every body loses (except for the customer). Why compete on price when there are
so many avenues for differentiating you product or service? It doesn’t make sense. Or
should I say, cents…
Conclusion
Pricing is a key factor in marketing and selling your product or service. Whatever price
your choose, make sure that you have an end objective in mind and that your pricing
strategy supports your end objective.
Don’t believe the myths that are swirling around about pricing. In the end, price is simply
a perception of value. Build your value and charge higher prices. Make sure that you do
some testing on your price points or you might be missing out on a lot of profits.
How you present your price can be just as important as the price you choose. Always
make a comparison to something large that your customer can understand. Advertise your
price only if it’s very low or you can build value into the advertisement.
Although some price gimmicks may seem juvenile and down right dumb, never
overestimate the intelligence of the public.
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Not only do some price gimmicks work, but discounting can also be a successful
motivator…if done correctly.
Lastly, never compete on price, unless you have a cost advantage that is near impossible
to duplicate. Competing on price is almost always a losing proposition.
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How To Use the Power of Packaging
to Double Your Sales
Packaging your products and service can be a powerful marketing technique to move
more products and services and add more value. By packaging, I’m not talking about how
you wrap up the package. I’m talking about the “package offer” you present to your
customer (sometimes called a bundled offer).
To give you an example, not long ago I purchased a vacation to Mexico that included our
flight, food, hotel accommodations, and various entertainment specials in one “allinclusive”
package. We had a great time and saved tons of money. Using creative
packaging deals can boost sales and impress your customer.
Another great example of this strategy is presented to you nearly everyday at fast food
restaurants. When you buy a “combo meal” for your child (which I often do), you are
buying a package deal. Instead of purchasing a soft drink, fries, and burger separately, it
all comes together in one happy meal package (they even throw in a toy!). Packaging is
so common in the fast food industry that 98% of all sales are package sales.
The Benefits of Packaging or Bundling
Assembling multiple products or services to sell in a package not only increases your
overall sales but it also…
1. Gives you the ability to sell slow moving merchandise.
2. Automatically up-sells your customers without having to ask for it.
3. Lowers your marketing costs because it allows you to move multiple types of
products or services through one advertisement.
4. In a joint venture it exposes your product or service to a new list of prospects.
5. Promotes a higher perceived value to your customer.
The list of benefits are many. Packaging and bundling provides a huge leverage in your
business and your marketing efforts.
The Psychology of Combining Products and Services
The idea behind creating packaging deals is to combine products and services together
and offering them at a lower price than you would pay if you purchased them
individually. Bundling goods at a discount price plays a few psychological tricks on your
mind that triggers you to buy. When you see a bundled offer of interest your mind says:
1. “I want that product or service.”
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2. “I’m going to need an extra unit of that product or service anyway (or, I’m also
interested in the additional product or service that’s being offered).”
3. “They’re offering me a pretty good price if I agree to buy more than one unit, so I
will end up saving money in the long run.”
4. “I might as well save some money and take the bundled offer right now.”
Remember, marketing is simply a psychological battle that goes on in the mind of a
consumer. It’s a fight for balance between price and benefits. The winner will be the
option that provides the best balance between price and benefits in the mind of your
prospect. In other words, the better value in the mind of the consumer always wins.
What is “Value”?
It’s important to know what value is when developing “packaged” products or services,
so allow me to take a moment and explain the true definition of “value.” Value is…
• Always variable depending on the consumer
• Based on perception rather than reality
• A tradeoff between price (the customer’s investment) and benefits (what she gets)
I like to think of value as an equation…Value = Perceived Benefits / Price. Now let’s
play with the value equation to see how it works in the mind of a consumer.
Scenario 1 — If Price goes up, and Perceived Benefits stay the same, Value goes down.
Scenario 2 — If Perceived Benefits goes up, and Price stays the same, Value goes up.
Scenario 3 — If Perceived Benefits goes up, and Price goes down, Value goes way up!
As a marketer, you always want to position your offer with the value going up. To do this
you must either lower your price, increase your benefits, or increase your benefits more
than you increase your price. Whatever you do, your value must go up, because that’s
how consumers choose you over your competitor.
You may be getting tired of the theoretical stuff, but it’s important to understand this
when creating a bundled offer. Why? Because if you bundle your products and services
right, you will be able to add even more benefits to your customer at a lower unit price,
thus dramatically increasing the value of your offer in the mind of the consumer.
Examples of Packaging and Bundling are Everywhere!
You can see examples of bundling and packaging everywhere. Just look around you
when you go out to shop for men’s and women’s clothing. Merchandisers have figured
out that people will buy matching belts, ties, scarves, and even jewelry in different stores
just to match the outfit they purchased at their store.
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That’s why you see suits with matching ties and shirts for one low price. Or you’ll find
women’s suits with matching blouses and jewelry for one price.
Amazon.com demonstrates a great example of packaging by offering you the book you
have requested and a second related book:
If you’ve expressed interest in The Ultimate Pool Maintenance Guide, Amazon gives you
the chance to buy it together with What Color is Your Swimming Pool? for about 30%
off the cost of both books. Do you think that Amazon has increased their sales revenues
and margins from this type of promotional offer? Absolutely.
Bundling products and services is so powerful that it revolutionized the software industry
in the early 90’s. Once Microsoft started the era of bundling desktop software, if you
were a provider of just one software product you had very little chance of survival. Just
ask WordPerfect, Novell (still struggling), Borland, Lotus and a list of other companies
that were literally destroyed because they didn’t bundle.
Using Joint Ventures to Bundle Products and Services
If you don’t have (or can’t offer by yourself) multiple products or services you may
consider joint venturing to provide additional products or services of other businesses to
bundle together with your offering.
For instance, if you are a men’s clothing store, you could bundle the services of a local
clothing tailor and a dry cleaner to provide a “Perfect Suit” program. The clothing store
sells the untailored suit, the tailor fits the suit, and the dry cleaner cleans it. Everyone
benefits resulting in more sales and new customers.
Suppose you were a marketing consultant (like me) and you noticed that many of your
clients not only had marketing issues, but also bookkeeping and legal problems. Instead
of doing a simple referral to other businesses you may consider forming a joint venture
and offering a “Small Business Diagnostic” service that all three parties (consultant,
bookkeeper, and lawyer) sell to their clients.
How To Develop a “Package Offer”
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To develop different package offers, think of the problems that your customers often
experience and the potential solutions that you offer to help solve the problem. Then
think of something else you may be able to add with the package that costs you little but
adds great value.
For instance, the following are a four common problems that customer’s of various small
businesses face and examples of potential “packages” that might offered to solve the
problem.
Example 1 — Service Station
Customer Problem — Auto deterioration from cold winter weather
Package Offer — “Winterization Package”
Winterization Silver Package
1. Flush radiator
2. New coolant
3. Oil change to lighter viscosity
4. New window wipers and fluid
5. Fix windshield cracks
Winterization Gold Package
1. Winterization Silver Package
2. Rust sealant package
Winterization Platinum Package
1. Winterization Gold Package
2. New set of winter tires
Example 2 — Hair Salon
Customer Problem — Need to look your very best for your (or your friend’s) wedding
Package Offer — “Wedding Day Miracle Makeover” (for brides and bridesmaids)
Wedding Day Miracle Makeover Basic Package
1. Hair cut
2. Hair wash
3. Hair perm
Wedding Day Miracle Makeover Fashion Package
1. Wedding and Bridesmaid Makeover Basic Package
2. Full facial
3. Nail restoration
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Wedding Day Miracle Makeover Supermodel Package
1. Wedding and Bridesmaid Makeover Fashion Package
2. Beauty makeover
Example 3 — Laundromat
Customer Problem — Clean your dirty clothes
Package Offer — “Fresh Family Clothing Service”
Fresh Family Clothing Starter Package
1. Unlimited use of washing machines
2. Unlimited use of drying machines
3. Unlimited use of laundry detergent
Fresh Family Clothing Super Package
1. Fresh Family Clothing Starter Package
2. Unlimited use of ironing room
3. Unlimited use of high speed large steam press
Fresh Family Clothing Ultimate Service Package
1. Fresh Family Clothing Super Package
2. We do washing, drying, pressing for you while you wait in our social lounge (TV,
drinks, snacks etc.)
Example 4 — Grocery Store
Customer Problem — You’re hungry!
Package Offer — “Life Cereal Sale Special”
Life Cereal Value Special
1. Two 24 oz. Boxes of Life cereal
Life Cereal Mega Value Special
1. Two 24 oz. Boxes of Life cereal
2. Two more 24 oz. Boxes of Life cereal
Important Packaging and Bundling Principles
Now that you have reviewed these four examples I hope that you get the idea of how to
package products and services for maximum value and price. Let’s take a moment and
review each of these examples and pick out the important principles that you need to
keep in mind when creating a package offer.
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Principle # 1 — Each of the three packages offered was a solution to a customer’s
problem. Don’t offer a packaged product or service unless it offers a solution to a
problem. Why? Because people only buy things that solve problems they are
experiencing.
Principle # 2 — Each offer actually had three unique offers that built off the lowerpriced
package. Giving the consumer choices is what packaging and bundling is all
about. Providing options with increasing value is what motivates consumers to “up-sell”
themselves by choosing the more expensive option.
Principle # 3 — The names of the different packages denoted increasing value: silver,
gold, platinum or starter, super, ultimate. Notice that each word has increasing value.
Also notice that the name of the lowest package denoted value. That’s why we started
with silver instead of bronze. It says that even the lowest option is valuable.
Principle # 4 — The additional products or services that are added on to the basic
package have a low cost to you. The “add-ons” need to be cost effective because the
incremental price you are charging needs to provide significant margin to the package.
Principle # 5 — I threw the Life cereal example in for two reasons. One, because it’s my
favorite cereal and two, because I wanted to show you that you don’t have to have a
bunch of different products to create a package. You can just add more of the same
product to the package.
In fact, just yesterday I purchased two units of potato salad. A single unit of potato salad
costs $2.00 and the double package costs $3.00. I bought the $3.00 package, ate the first
unit and took the second one home!
Look Around for Packaging Options
Yes, you do have packaging options in your business. You just need to open your eyes to
find them. In some way, shape, or form you can create unique packages of your product
or service that will solve one or more of your customer’s problems.
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Conclusion
Packaging creates a higher perceived value by increasing the benefits and lowering the
unit price. Examples of packaging and bundling are everywhere. If you don’t have
enough products or services to create a package offer, consider joint venturing with a
company that does. Remember to provide a strong up-sell option in your package by
offering multiple options, each progressively more valuable and expensive.
Happy packaging!
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Membership Marketing: Turning
Occasional Buyers Into Loyal
Customers
Not long ago my wife and I closed down a bank account that we had not used in many
years. I had tried to persuade my wife for many years that we needed to close the account
because we just weren’t using it and I didn’t want to keep paying fees. But she insisted
that we keep it open because she was a “charter member” of the bank and didn’t want to
lose her privileges.
My wife is very frugal yet she was willing to continue to pay for membership in
something that she received no services or benefits from. It was then that I realized just
how powerful it is to “belong” to something. It satisfies our deepest needs as human
beings to be wanted, loved, and appreciated.
Does Your Company Need to Establish a Membership
Program?
I am often asked by businesses if a membership program would be “right” for their
company. In response, I offer the following “yes” or “no” membership qualification test.
Take the test and see if your company needs a membership program.
Does your company…
- have to conserve its limited resources when providing service to its customers?
- want to decrease customer turnover and dramatically improve customer loyalty?
- need a constant, predictable stream of revenue?
- desire to sell its full suite of services with less effort?
- wish to get the more revenue out of its existing customers?
- aspire to significantly improve its referral business?
If you answered yes to one or more of the above questions, your company could benefit
from establishing a membership program. OK, you’re probably saying, “There isn’t a
company in existence that wouldn’t say yes to one of the above questions”, and that is
exactly my point. Every business can benefit from a membership program and should
establish some form of membership marketing.
Take a Closer Look at the Benefits
Membership programs provide powerful benefits that will improve your company’s
performance. Let’s take a closer look at the benefits that were just mentioned.
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1. Conserves limited company resources — Resources are allocated according to
the customers’ level of membership (i.e. lower membership level = less resources,
higher membership level = more resources).
2. Increases customer loyalty — Membership provides a sense of belonging to an
organization, which breeds loyalty.
3. Provides a predictable stream of revenue — Instead of sporadically selling
products and services, membership programs provide a steady stream of
customers providing a steady stream of cash flow.
4. Sells more services and products with less effort — Because slow-moving or
less desirable products and services are included in membership packages people
are more likely to take advantage of them.
5. More revenue from existing customers — Multi-level membership programs
entice customers to spend more by moving up to higher levels of the program.
6. Improves referral business — People like to tell their friends about a company
to which they feel a sense of loyalty.
Types of Membership Programs
When you think of being a “member” of a business most people think of Sam’s Club or
country clubs, but membership programs can take on many forms. The following is an
example of different types of membership programs, which include a business selling, (a)
hard good products, (b) a company selling service, and lastly, (c) a company selling
knowledge.
Every business on the planet will fall under one of these business categories so there is
something to learn for every businessperson from the following three membership
program examples:
Costco — Business and consumer supplies superstore.
Gold Star Membership — Allows consumers to purchase products for personal
use at any Costco throughout the world.
Business Membership — Allows businesses to purchase products for business,
personal and resale* use.
Executive Membership — Allows consumers and businesses to save money by
offering exclusive services such as a 2% reward, business loans, and credit card
processing, larger gift certificates for mortgage or real estate transactions, travel
benefits and lower prices on check printing.
Hertz — Car rental company
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Hertz #1 Club — Private club number automatically fills out your information
form, this speeding the rental process.
Hertz #1 Club Express — Available only to Hertz #1 Club members and
provides an exclusive checkout counter for express members only.
Hertz #1 Awards — Available only to Hertz #1 Club members and allows you to
earn points for every qualifying dollar you spend on business and leisure rentals
that can be redeemed for prizes and air travel mileage.
Kennedy Inner Circle, Inc. — Marketing consulting services company
Silver Inner Circle — Receives monthly newsletter, periodic free tele-consulting calls,
invitations to “marketing roundtables”, and discounts on information products.
Gold — Includes Silver membership benefits plus monthly taped interviews with
marketing experts, exclusive additions to monthly newsletter, longer call-in consulting
times, access to special member’s area of website containing newsletter past issues and
articles, and receipt of three marketing books during the year.
Gold+ — Includes Silver and Gold membership benefits plus one-on-one and group
based tele-coaching, printed materials, additional coaching call-in days, and weekly
success-stimulator faxes.
Gold + VIP — Includes Silver, Gold, and Gold+ membership benefits plus three
“mastermind group meetings” two days each with personal coaching.
Platinum — Includes Silver, Gold, Gold+, and Gold+ VIP membership benefits plus
four mastermind group meetings. This level is by invitation only.
The following are several elements from these examples that are important to a
successful membership program. Each company provides different membership levels
with more offerings of service, discounts, speed, and accessibility at each higher level.
In the case of Costco, programs are targeted toward different demographic groups with an
increasing number of discount options.
In the case of Hertz, the express level increases accessibility and thus speeds the
fulfillment process. Also, awards are given based on purchase volume, motivating buyers
to purchase more.
In the case of Kennedy Inner Circle, each membership program offers a higher level of
accessibility to more in depth information.
Not every membership program has to be multi-level like those in the examples, but they
do need to provide an exclusive set of benefits that aren’t available to regular customers.
Let’s examine some membership benefit possibilities for various small businesses.
- Dry Cleaner
Basic Membership — 10 % discount on all cleaning
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Premium Membership — 10 % discount plus express counter service, pickup and
delivery, free alterations
- Certified Public Accountant
Basic Membership — Monthly tax saving teleconference calls, free newsletter
Premium Membership — Teleconference calls and newsletter plus express call-in
question and answer service, monthly one-on-one consulting, and monthly mastermind
networking meeting.
- Oil and Lube Franchise
Basic Membership — Reminder email service, free complete car cleaning, premium
grade motor oil.
Premium Membership — Email service, car cleaning, motor oil, plus free automatic
transmission fluid changing, engine cleaning, tire rotation, and one oil change a month.
- Movie Theatre
Basic Membership — 5 movies monthly for the price of three.
Premium Membership — 8 movies monthly for the price of five, monthly movie review
newsletter, express window, web-based ticket buying
In every business there are products and services that you can package to provide as
premium services in your membership program. It just takes a little creativity. If you only
offer one service or product, create more services and package them up to offer in a
membership program.
Pricing of Membership Programs
Membership programs have many pricing models and must be tested to determine the
right price for your business and clientele. However, pricing your lower membership
levels inexpensively is a smart tactic. Your goal should be to convert your customers into
members so that they’ll begin to feel an affinity to your business.
After your customers have joined, then you can begin to start the up-sell process by
providing tempting offers to move up the membership ladder. Look at your first
membership level as a “loss-leader.”
For example, it only costs $10 a year to be a member of Sam’s Club. It’s free to be a
member of Hollywood Video (video chain store). It costs $25 annually to be a member of
my local library. The low membership fees serve to attract people into the program, but
because it’s not completely free, customers will place a value on their membership and
use it.
Renewals: The Key to Membership Program Success
It’s one thing to package your services into a membership program and sell it, but
sustaining your subscriber base by getting customers to renew is another. If you don’t
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provide value and keep your promises during your customer’s membership, it will be
difficult to get them to renew.
To be honest, even if you have kept your promise and provided value it can be difficult to
get people to renew. Magazines consistently have this problem. In fact, companies have
been established with the sole purpose to help other companies to maintain a high
renewal rate.
The key to getting your members to renew is to provide value beyond what was promised
and to offer incentives to renew. The incentives should have a low cost to you and a high
perceived value from your member. For instance, suppose you offer a paid newsletter
service. Your renewal offer might include several free teleseminars or a free discount
coupons from a popular vendor that advertises in your newsletter.
Another option to improve your renewal rate is to sell renewals upfront by offering
multiple period memberships at a discounted price. For instance, when you offer a oneyear
VIP membership at your restaurant, up-sell the offer with a second year at a 35%
discount.
Locking your customers into multiple period membership programs should be an
important goal. Because your customer was willing to buy the first period, they’ll be
inclined to consider multiple years…if the offer is right. A powerful hidden benefit of
locking your customer into a long-term membership program is that you’ll also be
locking out your competition!
Use Membership Cards
Open you wallet right now and you’ll probably see several membership cards. That’s
how I came up with the membership prices for Sam’s Club, Hollywood Video, and the
local library. I also have a membership card from my local grocer, health club, and
airlines (Continental and Southwest).
Membership cards serve several purposes beyond just holding personal and transaction
information. They serve as a gentle reminder for your customer to take advantage of their
membership. You can also use a card as physical evidence for proof of membership. In
addition, you can use it to mark off visits or purchases of specific product, much like
Subway’s sandwich card.
You might even consider establishing your own charge card. According to stats from GE
Card Services, store credit cardholders will spend at least 50% more each year with that
retailer than customers not carrying the retailer’s card. Offering a credit card also makes
it easier for your members to buy your products by providing installment payments.
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Conclusion
Membership programs help to properly allocate company resources, increase customer
loyalty, provide predictable revenue streams, sell more products and services, generate
higher revenue per customer, and improve referrals. Every business has products and
services they can package into a membership program.
Make it easy to enter your membership program and once you have a good membership
base, focus on renewing your members to keep them in the program. Use a physical
membership indicator to not only improve data tracking, but to remind your members to
use their privileges.
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Street Marketing for Small
Businesses
It’s 2:00pm on a Saturday afternoon and you’re watching the Dallas Cowboys beat up on
the San Francisco Forty-Niners. You faintly hear a knocking at your door but you ignore
it because the Cowboys are in the “red zone” and are about to score again.
Again, you hear a knocking at your door and you grudgingly get up to go answer it.
Before you open the door you look through your trusty peephole that allows you to see
who is bothering you on a relaxing Saturday afternoon. There he is, an energetic-looking
young man with a big smile on his face.
You know what’s coming next…the sales pitch for something you don’t want. But the
young man catches your eye because he looks so clean cut. He has a nice shirt on with a
tie and looks really happy. Finally, you decide to open the door.
As you do, the young man promptly extends his hand and says, “Hello, my name is Alex
Gordon. I am trying to raise money for my college education and to do that I have teamed
up with, Dezinger’s, the best local restaurant in the area. Dezinger’s is offering you over
$500 worth of meals for free. It’s really an incredible offer. Can I take a moment of your
time to explain it to you?”
You think to yourself, “I’ve seen Dezinger’s. They’re giving away $500 of free meals?
Wow! This clean-cut young guy is working to raise money for his education…that’s
impressive.” You say to the young lad, “Sure, come on in.”
Welcome to One-to-One Community-Based Street
Marketing.
You have just witnessed (in your mind’s eye) the power of one-to-one community-based
street marketing. How many radio or newspaper advertisements can pull a football
fanatic out of his chair, during an exciting football game, to see or hear your
advertisement? The answer is NONE.
One-to-one community-based street marketing is powerful and effective because it
searches and finds your prospect and delivers your marketing message face-to face. No
other marketing medium has that power. Not even direct mail or the Internet.
It is said that consumers receive over 3,500 advertisements a day in one way or another.
It is difficult for even the best marketer to cut through that much advertisement clutter.
With thousands of advertisements being read, heard, or seen, your prospect can become
dazed and confused. Those businesses that take their customers by the hand and
demonstrate their value proposition will be the winners.
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Street Marketer Who Recently Came to My Door Selling
Cleaning Liquid
Most Any Product is a Good Candidate for Street
Marketing
Most any common consumable product is
a good candidate for street marketing as
long as the offer is right. However,
products and services that work the best
are ones that the consumer already
purchases, such as oil changes, haircuts, or
pest control.
The following are several popular items
that do very well in the street marketing
environment:
• Restaurants
• (especially pizza takeout)
• Golfing
• Auto Services
• Video Rental
• Sport Events
• Dry Cleaning
• Children’s Recreation Centers
• Movie Theatre
• Car Wash
• Hair or Nail Salon
• Liquid Cleaners
…and many more
Not long ago I purchased a coupon package for a local car wash. The car wash offered
me several free washes, carpet cleaning, upholstery cleaning, and even an engine
cleaning for only $25. I knew that I needed to get my car cleaned and I figured I could
make my money back in only two visits to the car wash. I bought it.
What are the Benefits of One-on-One Community-Based
Street Marketing?
We’ve already mentioned how effective street marketing is because it cuts through the
marketing clutter. But perhaps the biggest advantage is that it is extremely effective at
driving customers to the local establishment sponsoring the campaign.
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Think about it. Once you purchase a $25 set of coupons for a service, you’re going to use
that service to get a return on your dollar. So, in essence, it’s more effective to sell your
coupons than it is to give them away as free gifts.
Another benefit is that when a new customer carries the coupon into the establishment
and presents it to the service person, it acts as a flag to the business to give that new
customer(s) the red carpet treatment. When your new customer has a great experience,
they will come back again.
Who Walks the Street and Sells your Offer Door-to-
Door?
A good college student that needs extra cash is a great candidate for street marketing.
Depending on how you arrange the deal with your marketers, the person doing the door
knocking can keep up to 100% of the profit! How good is that?
For instance, let’s assume you were selling a dry cleaner coupon pack to residents for $20
and your closing ratio was 30% (not unreasonable for street marketers). It takes your
street marketer one hour to hit ten houses in which people are home. As the street
marketer, you close three of the ten houses and pocket $60. I don’t know of one single
college student that wouldn’t knock doors for $60 an hour.
Strategies for Making Community-Based Street
Marketing Work
It’s not difficult to make community-based street marketing pay off big if you follow a
few important strategies.
Strategy # 1 — Present an Irresistible Offer
The most important element of success for street marketing is the offer. If you can
present an offer that is nearly irresistible you will have a high probability of success. If
you understand your “total customer value” and your “customer acquisition cost,”
creating a great offer isn’t hard.
If you know these figures you’ll know how much products or services you can afford to
freely offer and still make a handsome profit on back-end sales (repeat visits, larger
follow-on purchases, referrals etc.)
To develop your offer, sit down and write out a list of all your products and services.
Now separate the basic products and services from the add-ons. Then start bundling your
basic products and services with several add-ons using different combinations.
Strategy # 2 — Maximize Up-sells
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Structure the offer for maximum up-sells. For example, offering a free rug shampoo and
engine cleaning with a paid car wash forces the customer to pay for a car wash to get
their free rug shampoo and engine cleaning.
Hint: When developing your offer (coupon sheet) you need to give away several basic
offerings before you start bundling. For instance, if you are an oil and lube service
consider giving away three oil changes free of charge, then bundle a paid oil change with
other free add-ons. This allows the purchaser to clearly see that there is value even if they
just cash in on a few coupons.
Strategy # 3 — Make It a Fundraiser
Consider using your offer as a fundraiser for a local high school. Local fast food
restaurants use this tactic often. They allow the student to keep a portion of the proceeds,
which shows support for the high school and at the same time giving the fast food
restaurant a great reputation in the community.
But the most powerful part of using it as a fundraiser is that it gives residents a different,
more powerful reason to buy your services. Who can resist a local high school student
pounding the pavement to raise some money so they can have a uniform to play softball?
Another spin on this tactic if you don’t want the fuss of setting up a joint venture with the
local high school is to use a young college student. In their door approach script have
them say, “Hi, my name is David Frey and I’m trying to raise money for my college
education.” Again, you’ve now turned a selling situation into a cause-related charitable
donation, which dramatically lowers the barrier to purchase.
Strategy # 4 — Team Selling
Form your sales team into small groups of young people that attack a small
neighborhood. Just knowing that your partner is on the other side of the street also
knocking doors will motivate your sales force. It’s fun when the two street marketers get
to the end of the street and compare notes (and sales!)
Strategy # 5 — Set Goals
Setting goals is another excellent way to keep your street marketers motivated. Because
street marketing is a very results oriented marketing tactic that can be measure on a daily
basis, it’s easy to set, not only monthly or weekly goals, but also even daily and hourly
goals.
For instance, you might set a goal for your marketer to contact 15 homes every hour.
Another goal would be a “closing goal” that encouraged marketers to close four out of
every ten presentations for a 40% closing ratio.
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Once you’ve developed a set of simple goals that are easy to understand and measure,
rank your marketers and post results. The low performers will either be motivated to do
better or quit. Both are acceptable results, because you don’t want low-performers who
aren’t motivated to improve.
Don’t forget to recognize your top performers with rewards that they consider valuable
— whether that’s money, a vacation, a picture on the wall, dinner for two, or even a one
week sports car rental.
Strategy # 6 — Have a Great Product and Give Great Service
Getting the coupon in the hands of your prospect is only the start. Once they redeem the
coupon you must demonstrate high value. If you don’t, you’ve just wasted a lot of
money. You see your coupon is just a lead generator, nothing more.
Don’t be confused; they are not customers just because they bought your coupon pack.
They become customers when they’ve had a great experience with your product or
service so when they come in to redeem their coupon, give them 110%. Make it a real
“Wow” experience.
Street Marketer Demonstrating His All Purpose Cleaner on my Carpet and In my Shower
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Make a Big Splash In a Small Pond
Many small businesses make the mistake of marketing too big. By this I mean, they take
out ads in papers, on the radio, even on T.V that reach large areas, even outside of their
market area. Before they know it, their marketing budget is blown and they have nothing
to show for it.
Take a lesson from the real estate industry — choose a neighborhood and DOMINATE
it. Then move to the next neighborhood. Too many small businesses jump up and down
in an ocean and expect to make a wave while they should be jumping up and down in a
small puddle where they can make a huge splash. Street marketing is neighborhood and
community based. It attacks the small puddles. But after dominating about five or six
puddles, you’ll start seeing big results.
Conclusion
Door-to-door, community based marketing is more effective at cutting through the
marketing clutter than any other marketing tactic in existence. The offer presented at the
door by your marketer is the biggest determinant of success. Consider using young adults
who are trying to raise funds for college or a worthy cause. Send your marketers out in
groups and set personal and team goals for them to achieve. Be ready to give your new
customers the red carpet treatment so that they’ll stay customers for life.
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Using Customer Testimonials in Your
Marketing Message to Break Down
Fear and Skepticism
Let’s face it, today’s consumers are skeptical. Can you blame them? With all the
marketing hype and sales pitches people receive each day, we are all a bit jaded.
However, to make the sale we must overcome our prospect’s natural skepticism and
create a relationship of trust. One of the most powerful tools in your marketing arsenal is
customer testimonials.
It’s one thing to toot your own horn. People expect you to sing praises about your own
products or services. Because of this, there is an inherent disbelief in any marketing
message that comes from you. But when other people, who have nothing to gain from
your success, say good things about your products or services, your believability shoots
skyward. Providing third-party testimonials do just that and should be a part of your
marketing message.
Testimonials and the Magic Power of Persuasion
Testimonials are powerful. They create believability, credibility, and a sense of security
for your customer. They help to break down the natural barriers and distrust that most
buyers feel towards you or your business. Watch any infomercial and you will see that
they are loaded with customer testimonials. Why? Because they work!
Testimonials have the magic power of persuasion. Look at the success of the George
Foreman grill. Foreman has sold millions of dollars worth of this product. Better said, the
company that developed the grill has sold millions of dollars worth of grills by using
George Foreman’s testimonial.
People have an inbred automatic response to mimic what other people do. Why do you
think television producers play recordings of laughter when a punch line is said during a
sitcom? Because they know that it will make the live audience laugh, even if the punch
line wasn’t funny.
Strange? Even stranger is that the people in the audience know that it’s just a recording of
fake laughter but producers have found that when the recorded laughter is turned up, the
live crowd laughs even louder. It’s a natural instinct to mimic what others are doing.
Customers Who Give Testimonials Are More Loyal
An extra bonus is that testimonials will also create more loyalty in your customers. Once
people have put their name and reputation on the line by publicly endorsing a product or
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service (or person), they will stand behind that decision even if they find out it’s a bad
one.
* Sidebar *
It reminds me of the time when Bill Clinton when “on record” saying “I never had sexual
relations with that woman.” Even after overwhelming evidence he continued to deny it
until he was forced to admit his wrongdoing.
* End Sidebar *
In addition, when you ask your customer for a testimonial, they will feel as though they
are helping you and your business grow. Because they feel as though they have a direct
hand in the success of your business, they will stay loyal.
Ten Strategies for Successful Customer Testimonials
There’s more to obtaining testimonials than just asking your customers for their
comments and feedback. If you want to have powerful testimonials that catch your
prospects’ attention and build a relationship of trust, you should consider the following
testimonial strategies.
Strategy # 1: Try to get a testimonial from your customer as soon as possible. This could
be the day you make the sale, or within the first week after you make the sale. Your
customer will be at their “giddiest” and most motivated to write you a great testimonial
during this time period. Don’t wait until the honeymoon period is over. Consider having
them write the testimonial before they leave your office or store.
Strategy # 2: Always ask your customers to include your unique selling proposition
(USP) in the testimonial. For instance, if your USP includes exceptional customer
service, same-day installation, and a money-back guarantee then ask your customer to
attest to those qualities.
Strategy # 3: Don’t ask for customer testimonials in survey requests. Many businesses
make the mistake of sending out customer surveys to get feedback from their customers,
in addition to testimonials. Your customer needs to have the freedom to stay anonymous
and say negative things in your survey, which is opposite of what you’re looking for.
Strategy # 4: Have your customers be specific in their testimonials. For instance, if you
delivered your product the same day your customer purchased it, tell your customer to
include the time that it arrived. If you delivered some kind of outrageous act of customer
service have them write specifically about what you did and how it helped your customer.
Strategy # 5: Ask your customer to talk about the struggles they were having previous to
receiving the benefits of your product or service. Most likely, the reader will have had the
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same or similar struggles and will empathize. This will only make your prospect more
interested in receiving the benefits of your product or service.
Strategy # 6: Have your customer state their credentials. This will make their testimonial
even more persuasive because their comments will be seen as coming from a credible
source. People tend to believe others in positions of perceived authority.
Strategy # 7: Always try to get a picture with them using your product or service. As a
matter of fact, try to take the picture yourself so that you know you’ll get a good one.
Take several and make sure they are showing the benefits of the product or service.
Pictures double the effectiveness of your testimonial and bring the testimonials to life.
Strategy # 8: Make sure you get permission from your customers to use their
testimonials in your advertising. Thank them profusely and let them know that it is
testimonials like theirs that help your business grow.
Strategy # 9: Ask them if you cannot only use their name but the town (suburb) they live
in. Addresses, even if it’s just a city name, increase the believability of the testimonial. It
demonstrates that they are real people who live in the same community as your prospects.
Strategy # 10: Now here is a controversial tactic but it has worked every time for me.
Let’s suppose your customer procrastinates to send in their testimonial. Call them up and
mention that you know they are very busy but that you value them as a customer and
their testimonial is important to you.
Suggest that to save them time and hassle, you will draft a testimonial for them and they
can make any editing changes they want. Then send it back. Of course, you’ll want to
send a self-addressed envelope. You get the perfect testimonial and they don’t have to do
any work. Again, this tactic has worked 100% of the time for me.
Here’s a sample letter from the spa industry asking for a testimonial from a customer:
Dear Frank:
Thank your for purchasing your spa at Spa City USA. It was a great
experience helping you in your selection process. You were well informed
which made our job easy. We wish we had more customers such as you
who take the time to make a good decision.
We know you had several choices from which to purchase your spa and we
were flattered and grateful that you chose to purchase your spa from us. We
consider it an honor when someone shops around and comes back to
purchase at Spa City.
From time to time we ask a few of our special customers for their feedback.
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We often use this feedback as a testimonial in our marketing material.
Because we had such a pleasurable time with you Frank, could I ask you to
jot down a few words about your experience at Spa City and the people that
helped you, so that we can use what you say in our marketing material? You
would be helping us tremendously in our marketing efforts.
You might want to include specifics such as names, positive incidents, and
how you feel today about owning your spa. Again, this will help us as we
market our products and services here in the Seattle area.
Enclosed you will find a form to use and a pre-paid envelope with which to
mail it back to us.
Thank you so much for your help and for being a great customer.
Cordially yours,
David Frey
This testimonial request letter butters up your customer and makes him feel as though he
is really helping out your business (and he is!). It makes him feel special and that his
comments will count. It also makes it easy for him to fill out and send back. The easier it
is to respond, the higher your response rate will be. Always follow-up a testimonial
request letter with a phone call and a letter, especially if it hasn’t come back after a
couple of weeks.
Always Thank Your Customer for Their Testimonial
If you thank your customer for their testimonial it will increase the good will you already
enjoy and confirm the customer’s choice for extending their good name and giving you a
testimonial. Take a moment to send a personal letter thanking them for their time and
effort. The following are a couple of example letters you might use as a guideline for
thanking your customer.
This sample letter is designed to go to people who have given you an unsolicited
testimonial after purchasing their spa or pool (or your product or service).
Dear Mr. Jones:
I wanted to take a moment to thank you for your kind remarks in the letter I
just received from you. Your praise of our store and its people is most
gratifying.
It is unusual for someone to take the time to express his satisfaction with a
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product or services. It’s people like you who make our special effort
worthwhile.
I am very pleased that you like your new Maxis spa as much as you do.
When I sold it to you, I really believed it would help your back problems
and allow you to relax after a long days work. I hope it gives you many
years of enjoyment.
Thank you again for your kind words. I’m proud to know I’ve been of
service. If you need anything don’t hesitate to call.
Cordially yours,
David Frey
Thanking your customer always tends to improve your rapport and solidify your
relationship. Besides, it’s common courtesy.
How To Use Customer Testimonials Once You Get Them
It’s not enough to receive customer testimonials. Knowing how to use them in your
marketing activities is what makes the difference. The following are seven ideas you can
use to implement testimonials into your marketing program.
Idea # 1 — Create a “What People Are Saying…” report. I once heard the story of an
independent consultant who, after proposing on a project, was asked for his resume.
Instead of sending his resume, he made copies of all the testimonials people had sent him
(hundreds) and put them in a shoe box and sent them to the company. Needless to say, he
got the project.
Create your own “What People Are Saying…” report by putting copies of your best
testimonials together in a booklet and giving them to prospects. This will become a very
powerful marketing tool for you.
Idea # 2 — Put testimonials on your website. Scatter testimonials from customers all
over your website. Many webmasters make the mistake of creating a testimonial page and
putting all the testimonials one page. Place testimonials wherever you make bold claims.
If you have testimonials pertaining to a specific product, place those testimonials under
that product.
Another great area to place testimonials on your website is on the right and left borders.
They will be a constant reminder of your credibility. If you have a sign-up page of any
sort, consider including a testimonial that talks specifically about what you are asking
your visitor to sign up to, whether it be your newsletter or access to special information.
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Idea # 3 — Always include a testimonial in your advertising. You’ll never see an ad for a
weight loss product without a testimonial. Why? Because those advertisers know that
people are skeptical of all ads (not just weight loss ads) and testimonials overcome
skepticism more than any other marketing tool.
Idea # 4 — In every direct mail piece you send, include a one or two page full of
testimonials. This gives automatic credence to whatever offer you are sending. You can
make the testimonials a part of the sales letter but from my experience, sending loose leaf
pages of testimonials make a persuasive statement.
Idea # 5 — Include customer testimonials on an audiotape. It’s one thing to read a
testimonial but another to hear a real live person. You can even include the pictures and
bios of those people on the tape in your mailer. I know of one marketer who sells
information products who includes an audiocassette tape with his sales letter. All the
audio tape contains is a recording of customers praising his product. It’s powerful.
Idea # 6 — Do joint endorsed mailings. If you have an associate that has customers who
might be good prospects for what you sell, ask if he would like to participate in a joint
endorsed mailing in which your associate would send a letter to his customers endorsing
(giving a testimonial) you and your products and services. In return you send a letter to
your customers endorsing your associate’s products and services. It’s a win-win.
Idea # 7 — Do an endorsed referral letter promotion. This tactic is similar to Idea # 7 but
the promotion is done with your customers. Hold a contest of some sort and award prizes
(incentives) to those customers who send in the names and addresses of three friends who
they know would benefit from your products or services. Then send each of the three
friends a letter with the testimonial of the person who referred them. This could give your
referral program a jolt.
Start a “Testimonial Drive” Today
Chances are, you have not been diligent in asking for customer testimonials. I would urge
you to make a commitment today to start asking for testimonials from 100% of your
customers. You can’t have enough customer testimonials.
Make a plan today to begin a “Customer Testimonial Drive” and set a goal to obtain 100
customer testimonials within the next three months. Put a thermometer on the wall if you
have to, but start today. Draft your testimonial request letter and send it out this week.
Then start following up on your requests by phone next week.
Conclusion
Testimonials are a powerful tool in helping you to break down your prospects’ skepticism
and fear. When customers give you a testimonials, they work to solidify your relationship
with them because they have “gone public” with their statement of support for your
business.
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Ask for testimonials from your customers as soon as they purchase your product or
service. Ensure that their testimonial is very specific. Always get a picture of your
customer to use with your testimonial. Don’t forget to thank your customer for pledging
their public support for your business. Find innovative ways to integrate your customer
testimonials into your marketing program.
Now go and get some great testimonials!
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The Key To Guaranteed Repeat Sales
There is no more customer loyalty! Let’s face it, people go where they get the best deal.
By that I don’t mean the cheapest prices, but the best value for their money. Just because
your customer purchased from you once, don’t be fooled into thinking that they will buy
from you a second time. Even though your customer may have had a “wow” experience
with you or your company, they are likely to buy the next time from someone who
provides a product as good as yours but that costs a little less or is delivered a little faster.
Since the 70’s there has been an explosion in consumer choices. For example, in the 70’s
there were only four types of milk. Today there are over 20. In the 70’s there was only
one type of contact lens. Today there are over 40 unique styles. Competition has also
become fiercer with the rise in consumer choices. It’s hard to find a market (large or
small) that doesn’t already have multiple competitors battling for their piece of the pie.
Three Types of Customer Relationships
So how do you keep your customers coming back time and again?
To answer this important question you need to take a moment and think about what
would keep a customer coming back to a business. Three instances come to mind:
1. The Customer and the Business Have a Positive Relationship
In this instance, the customer has formed a positive relationship with either a person who
works for the business or with the business itself. Perhaps they had a great experience and
they now have an emotional bond with the business. Unfortunately, unless the emotional
bond is nurtured, it dies a fast death — and quite frankly, there are extremely few
businesses that nurture their relationships with their customers.
2. The Customer Has Incentive to Continue the Business Relationship
People are human and because of that we are naturally greedy. The principle of
greediness is what makes capitalism successful. Companies who reward (bribe) their
customers with coupons, points, credits, and bonuses create an incentive-based
relationship that crumbles once the incentive is taken away.
3. The Customer “Has” to Continue the Relationship Because the Cost to Change is Too
High
This is an instance in which the business has tied its operations into the customer’s life or
business so closely, that to move to another product or service provider would cause
damage emotionally, socially, operationally, or financially. An example of this type of
relationship would be a person who is emotionally dependent on his therapist (emotional)
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or a customer who has purchased proprietary computer software that isn’t compatible
with other hardware (operational). I call this type of relationship an “Integrated
Relationship” because it extends into the life of a person or into the operations of a
business.
Of the four types of Integrated Relationships (social, emotion, operational, financial), the
operational relationship is the most powerful. Operational relationships exist when the
actual work processes of two businesses overlap. Untangling business processes is a mess
and always has a very high switching-cost.
The Secret Key to Guaranteed Repeat Sales
Each of the three types of relationships just mentioned keep customers coming back, but
the first two are somewhat easy to break. The Integrated Relationship, however, has
severe penalties for breaking the relationship and, therefore, forces the customer to come
back again and again whether he likes it or not. This is the ultimate customer relationship
and the secret key to guaranteed repeat sales.
Look at most highly successful companies and you’ll find that they have developed
Integrated Relationships with their customers. The following are three excellent examples
of companies that have created Integrated Relationships.
1. Campbell Soup
Campbell’s Soup has developed a successful vendor-managed inventory (VMI) program
with its customers. A VMI program provides continuous replenishment for its customers
by monitoring the customer’s inventory levels (physically or via electronic messaging)
and makes periodic re-supply decisions regarding order quantities, shipping, and timing.
In effect, Campbell Soup has literally taken over the entire replenishment function for its
customers.
FedEx
FedEx installs computer terminals in many of their customer’s businesses that help to
determine shipping requirements, track shipments, and even integrates into the
customer’s inventory, accounting and order management system to automate the returns
process. This literally forces the customer to use FedEx for their express mailing needs.
2. CHEP
You’ve probably never heard of this company (see CHEP.com). They were my arch
nemesis in one of my former careers. CHEP is a wooden pallet management company
that manages the flow of pallets between suppliers and customers. They continue to grow
unchallenged. Why? Because their “system” of managing pallets is so tightly integrated
into their customer’s operations that their customers would experience a serious
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disruption in their business if they moved to another provider. (If you enter a Sam’s Club
you’ll see the blue CHEP pallets everywhere.)
What is the common thread between these three companies? It’s the high level of
integration into their customers businesses. That’s what has made them monopolies.
Customer switching-costs are too high to not use them.
How Do You Create An Integrated Relationship In Your
Business?
Now that you know the key to forcing customers to do business with you, how do you
create that same situation in your business? You don’t have to be the Campbell Soup,
FedEx, or CHEP in your industry; all you have to do is create the same type of Integrated
Relationship they have created with their customers. To do this you must provide a
unique offering and find ways to extend your operations deep into your customer’s
business.
1. Provide a Unique Offering
Providing a unique offering attracts customers to you. Being unique will compel your
prospect to consider your product or service above all others. Eventually, your
uniqueness will differentiate you and becomes the reason your product or service is
chosen over another.
2. Integrate Your Product or Service into the Life or Business of Your Customer
Develop a product or service (if you don’t already have one) that you can integrate
socially, emotionally, operationally, or financially into your customer’s life for business.
This means that you need to develop new ways to extend your product or service into
your customer’s life or business.
* Sidebar *
During the Internet gold rush I lost a ton of money on the Dot-Com company named
Webvan. Webvan spent a huge sum of money creating massive automated warehouses to
deliver groceries to people’s homes. The company eventually went down in flames. I
always thought that Webvan might have survived if they had extended their system into
the customers’ kitchens (rather than just their personal computers) by creating a device
that attached to the door of the consumer’s refrigerator that allowed them to reorder
groceries electronically without going to the Web. Hey, but what do I know.
* End Sidebar *
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Questions to Ask Yourself to Jumpstart Your Creative
Thinking
The following are questions that you can ask yourself in each of the four areas of
Integrated Relationships that will help give you ideas about what you can do to create an
Integrated Relationship with your customer.
Operational
1. Do you have a technology that you can deploy into your customer’s business?
2. Can you take over or manage a portion of your customer’s business operations?
3. Can you house or manage your customer’s data or assets at your place of business?
Social
1. Can you get your customer to be a public poster child (i.e. provide a public
testimonial) for your business?
Hint: An easy way to do this is by writing articles and submitting them to trade
publications about how your customer solved their business problem with your product or
service.
2. Can you create a brand so “cool” or popular that to not use it would be embarrassing?
3. Can you present an award to your biggest customer(s) (or target prospect) and
announce it to the industry?
Financial
1. Can you offer a program that requires a large upfront investment that delivers products
or services over time?
2. Can you offer your significant customers an opportunity to financially invest in your
business?
3. Can you lock your customer into a long-term contract with penalties attached for
breaking the relationship?
Emotional
1. Can you hire influential people in your industry (i.e. recognized industry experts, highlevel
executives in big companies, popular service professions) that already have very
close relationships with target customers?
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2. Can you provide your customer with so much support (i.e. advice, attention, help) that
they can’t do without you?
3. Can you align your product or service with that of an existing, highly-popular product
or service?
Examples of How to Create an Integrated Relationship
The following are several examples that will help to clarify how to create an Integrated
Relationship with your customer. By the way, you don’t have to be a big business to
make this strategy work. And remember, any one of these strategies alone may not create
a high switching-cost, but combined together they may create a formidable cost to your
customer.
Example # 1 — Virtual Assistant (a person providing online secretarial services)
House your client’s records and files in your home.
Client Switching-Cost — They run the risk of getting their files messed up.
Build and host a website for your client.
Client Switching-Cost — They have to move their site to a new hosting provider.
Know the details of your client’s processes.
Client Switching-Cost — They will have to train someone all over again.
Know all your client’s passwords.
Client Switching-Cost — They will have to change all their passwords.
Maintain all your client’s financial data on your computer.
Client Switching-Cost — They will have to move all their detail data somewhere
else.
Example # 2 — Print Shop
Maintain all your customer’s original documents and forms.
Client Switching-Cost — Your customer will have to recreate his forms with a
new printer.
Deliver your customer’s documents to their place of business.
Client Switching-Cost — Your customer will rely on this service and won’t want
to give it up.
Create a private web-based ordering portal that remembers previous orders and
preferences.
Client Switching-Cost — The customer will lose the ease of personalized
ordering.
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Carry your customer’s forms in inventory for fast delivery.
Client Switching-Cost — The customer will now have a significant lead-time to
get their forms.
Other Integrated Relationship Examples to Consider
The following are a few more examples of little “hooks” that can be created to construct a
high switching-cost to the customer. Remember, the more personalized and intrusive
your services are the harder it is for your customer to switch to another provider. For each
example, think about why the switching-cost would be high.
Dry Cleaner — Create a home pickup and drop-off service in which your customer uses
a personal “dirty clothes basket” in their home that you have provided for them.
Corporate Personal Trainer — Create a personalized weight-loss program and weekly
accountability meetings for corporate clients.
Lawyer — Offer an annual long-term, fixed fee, legal advice service that people pay for
up front.
Restaurant — Prepare meals for businesses onsite and deliver to offices (so employees
don’t have to go to lunch).
Child Care — Provide an internet-based camera system with email and pager alert for
each parent (provide a free pager to each parent).
A Personal Example In My Own Business
The Integrated Relationship strategy has hit home with me several times over the past
year. I use www.1ShoppingCart.com for my online businesses. Their system provides me
with a number of services such as:
1. List management
2. Merchant account integration
3. Advertisement tracking
4. Affiliate program management
5. Autoresponder service
6. Digital product downloading
7. Sales reporting
Over the past year, 1ShoppingCart.com has gone through many growing pains, which
adversely affected my Internet businesses. There were a few times that I wanted to give
up and go somewhere else, but the sheer effort required to separate by web businesses
from their system forced me to just grin and bear it.
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Fortunately, they have improved their services immensely over the past year, but the fact
remained that I HAD to continue my service with them. The switching-costs were just
too high for me. It would have taken me weeks to recover and would have cost me a lot
in lost revenue. They are in an enviable position. Their business has become a toll booth
for me in which the cash register rings every month.
Conclusion
Take some time to brainstorm how you can create Integrated Relationships in your
business. Think about how you can extend your products or services “into” your
customer’s business so that their cost to switch to another provider is overwhelming.
Take some time to ask yourself (or your employees) the questions that I’ve shared with
you and I guarantee you’ll come up with some worthwhile ideas. Remember, the most
powerful relationship is one in which you and your customer’s business processes are
intertwined, so focus on creating Integrated Relationships.
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Lead Generation: How to Flood Your
Small Business With Hot Qualified
Prospects
NEWSFLASH! The number one issue facing small business owners today is not having
enough qualified prospects.
OK, so that’s not such a big newsflash.
Every small business owner would like to have more high quality prospects, but most
either don’t have the time or just don’t know how. There are a myriad of ways to generate
leads and each has its own merits.
In this article I will share with you what I have found (after years of experience) to be the
most powerful lead generation system in existence. I call it the “Ultimate Lead
Generation System” or The System for short.
Benefits of The System
The reason I call this the “Ultimate Lead Generation System” is because it contains all
the qualities that the “ultimate” lead generation system should have? It is one that . . .
1. Requires little manual effort to effectively run it — it has the ability to be put almost
entirely on autopilot.
2. Generates names, addresses, and even email addresses (80% of the time) of people
who are interested in knowing more about your specific product or service.
3. Gives permission to you to contact them and give your best sales presentation about
your specific product or service.
4. Creates a positive relationship of trust and generates a perception that you are “the”
authority in your industry about your product or service.
5. Generates predictable results. The system works like a radio volume control that
increases your business when turned up and maintains your business when turned
down.
The System does all this and more, which is why I call it the ultimate lead generation
system.
Using Psychological Triggers to Make People Respond
Generating hot qualified prospects is, in fact, a simple system based on human
psychology. People are motivated to action by simple psychological triggers:
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Trigger # 1 — People are naturally curious and will go to great lengths to know
information that other people don’t know.
Trigger # 2 — People are natural consumers. If you take the risk away from taking
action, people will be more apt to respond to your offer.
Trigger # 3 — People are turned off by traditional sales-based advertisements. They
don’t want another sales pitch. People want good useful information that will benefit
them as consumers (and in their quest to get a great deal). In fact, people are seven times
more likely to read a traditional news oriented editorial style article that they are an
advertisement.
Trigger # 4 — People will sit up and pay attention to things that directly affect them. For
example, people suffering from arthritis will find information about arthritis interesting
(and will read everything they can get their hands on about arthritis), while those who
don’t suffer from arthritis will not be interested in the least.
Trigger # 5 — People can’t resist a free offer. It’s the oldest, most worn out offer in the
books; however, there is no risk in responding to something for free. The highest
response rates are from free offers — always have been and always will be.
Each of these psychological triggers compels the average person to take action. Using
these triggers in a powerful small business “advertorial” (a cross between an
advertisement and editorial article) advertisement will bring in high quality leads.
The Five-Step Lead Generation System
Follow these five steps closely to develop your business’ “Ultimate Lead Generation
System.” Each step is significant, so take the time necessary to do it right.
STEP 1: Find Out Why People Buy From You
List the three most compelling reasons why your customers buy your product or service.
Take the time to ask your salespeople and even your customers to find out the true
problems they are trying to solve when customers buy from you.
STEP 2: Create a Special Report
Your special report should provide “insider” information that the average prospect would
not know. It should be highly educational and should NOT contain “sales” information.
Your special report could be a written report, an audiocassette, a video, or a CD-ROM.
Create an exciting title for your report. The best pulling titles (from my personal
experience) start with “How To,” use numbers, and are framed to avoid the fear of loss.
For instance, “How To Avoid Six Common Income Tax Mistakes that are Costing You
Thousands of Dollars.”
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STEP 3 — Develop a Direct Response Advertisement
Create a small ad that looks just like a newspaper article that includes the following
elements:
Element # 1. A strong compelling headline. Hint: Use the same headline as your special
report.
Element # 2. Identify the problem in the first sentence. For instance, “85% of Chicago’s
small business owners are losing thousands of dollars every year by making dumb
income tax mistakes…”
Element # 3. Announce the solution to their problems by offering your special report.
You might say, “Recently a new special report was released that identifies what these
income tax mistakes are and gives a simple step-by-step explanation about how to avoid
them.
Element # 4. Tell people how to get your report and what benefits they’ll receive by
acting immediately. For example, “Stop making these mistakes and save yourself
thousands of unnecessary tax payments right now by calling 000-000-0000 and
requesting your special report right now.”
You can elect to offer your report for free, which will increase the number of leads you
receive. Some of those leads may just be “tire kickers.”
The only way to avoid this is to make it a little difficult for your prospect to respond.
Charging a small fee for your special report will ward off some freebie seekers but I’d
rather deal with a few tire kickers then lose some potential customers.
STEP 4 — Set Up Your Response Mechanism
Prepare to receive a lot of leads by developing a response mechanism that logs all leads
and tracks where they came from. The worst mistake you can make is writing a hot
report, running a great ad, and then losing your precious leads.
Use a toll-free, direct response phone system to capture names and addresses. The
telephone makes it easy for your prospect to respond and using a toll-free number lowers
the risk of loss for the prospect. It also allows you to handle many incoming calls
simultaneously without any effort on your part.
I recommend using Automate Marketing Solutions
(www.automatedmarketingsolutions.com/hotlines) for your toll-free line. Their system
was developed specifically for managing lead generation programs. (Tell them David
Frey sent you — I use them personally.)
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You’ll need to create a phone script to welcome the caller, repeat the offer, and invite
them to respond by leaving their name and address. I always make a second offer for an
extra free gift that I can email to them to get their email address.
Include the words “free recorded message.” This lets the caller know that they won’t be
getting a sales job when they call, which again, decreases the risk of responding.
STEP 5 — Set Up a Follow-Up Fulfillment System
Suppose you’ve run your lead generation advertisement and calls are coming in
requesting your free report. How do you manage all your new prospects? Imagine if you
are going to send them three to five follow-up marketing pieces? It will soon become a
nightmare if you’re not careful.
I highly recommend using ACT Contact Management System to manage your leads. It is
not the only software that can manage your leads, but it is the simplest. And it also has a
feature called, “Activity Series” that is extremely powerful and keep your entire
marketing program organized and simple to manage.
The Activity Series allows you to set up a series of marketing activities performed at
specific times. For instance, after you have received a lead you will send out your special
report immediately. You might call the prospect in two days. You then might send a
follow-up postcard in five days and finally send a sales letter with a spectacular offer in
ten days.
Once you’ve set up your Activity Series you simply attach it to your new lead and the
software does the rest. The next morning you arrive and select the task list and it will tell
you all the marketing activities you have to do that day for all the prospects you’re
managing. It’s poetry in motion!
A High School Kid Can Do It!
If you’ve set up your system using AMS and ACT your system will nearly run itself. In
fact, I have clients that have high school kids running it. Once it’s set up and running,
anyone can manage it.
Here’s a typical scenario…
The direct response ad is run in the local community newspaper. Prospects respond and
leave their name and address on the AMS system. The next morning AMS sends you an
email containing all your fresh, hot leads.
You import them to ACT and attach the appropriate Activity Series to them. The operator
then selects the “Task List” in ACT and prints out all the marketing tasks to be completed
that day.
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That’s it! That’s all there is to it. After the ads are developed and you know which ones
pull best and you’ve developed your follow-up marketing materials you can hand the
system over to your lowest level assistant for them to manage.
The Magic Is In the Follow-Up
In the system that I have just presented to you, generating leads is the easy part.
Converting the leads to cash-paying customers is the tricky part.
You must follow up immediately, persistently, consistently, and persuasively. DON’T set
up and kick off your lead generation system without first putting some real thought into
your follow-up marketing system.
Use telemarketing, postcards, sales letters, email, and voice broadcasting couple with
powerful, juicy, irresistible offers in order to persuade your prospect to become your
customer.
The System Can Be Used With Any Advertising Medium
Let me clarify a common misperception that many people have. You can use any type of
marketing medium to generate leads — radio, cable TV, voice broadcasting, signs, the
Internet, etc.
In fact, one of the best lead generating efforts using The System that I have every
implemented was for a company that participated in a lot of trade shows.
We created a large sign that said “FREE SPECIAL REPORT! Hot Tub and Pool Buying
Secrets Revealed.” We posted the sign in the booth and had a sign-up sheet for people to
leave their name and address, which we would use to send them the report.
TRADE SHOW BOOTH BANNER
The booth was half the size of its competitors. We ended up getting three to four times
the amount of leads as the “big guys” and converting 20% of those leads!
DON’T BUY BEFORE READING THIS REPORT
ASK ME FOR OUR FREE REPORT NOW!
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Some of the most effective radio spots ever done were ones that offered a free
audiocassette to the first 50 callers. It generates amazing results!
Today, I will never create a radio, television, or print ad without offering a free special
report. It’s my opinion that if you have not gotten the name and address of your prospect
from an ad, it’s a colossal waste of advertising dollars.
Spend Your Precious Marketing Dollars On Qualified
Prospects…Not Everyone and Their Cousin!
Not long ago I watched a Disney commercial that gave away a free video. The
commercial showed all the Disney characters in the background but the picture of the
video and the toll-free number never left the screen.
The narrator of the commercial told the viewing audience all the interesting information
that the video contained and that it would answer all our questions about a Disney
vacation.
It was a spectacular commercial and, most likely, experienced spectacular results. You
see, Disney allocates some of its marketing dollars to airing their “lead generation”
commercial in the vacation decision-making months of January through March.
After collecting hundreds of thousands of leads, they then spend most of their marketing
dollars trying to convert their leads into customers.
Compare this to some big companies that just “spray” their commercial over the airwaves
and “pray” that someone comes into or calls their business.
I refer to this method of advertising as “spraying and praying.” Big companies have the
marketing budgets to do this but small businesses don’t!
Invest the majority of your precious marketing dollars in converting qualified prospects,
not blasting your marketing message to the masses.
Any Business Can Use This System
One of the most frequent comments I hear from business owners is, “This probably
works great for your business but we’re different. This won’t work for us.”
Ridiculous!
The System will work in most any business that sells a product or service. If your
business doors are still open it’s because you are solving a problem. People exchange
their money for your solution. Every viable business solves a problem.
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Take a moment and think about the problem that you are solving in your business. It may
be helping someone look or feel better, helping people to save money, or making
something easier for someone to do.
The key to The System is offering special information that helps people to avoid pain or
to achieve gain. If you can do that, The System will work for your business. Just take
your blinders off and think about what problems you solve and the rest will fall into
place.
Improve and Expand The System!
If your lead generation system is now running on autopilot, start analyzing your results to
see how you can improve. Can you tweak your headline for a higher response rate? Will
a different follow-up marketing piece provide more impact?
Can you provide a special offer to capture email addresses so that that allows you to setup
a follow-up email autoresponder series?
Continue to improve your results by looking at what others are doing, implementing
slight changes, and tracking the results for improvement.
Now once you’ve found what works, expand it. Widen your advertising to other mediums
and markets. Step on the gas and flood your business with more hot, qualified prospects
than you’ve ever had before.
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Charity Marketing: Growing Your
Business Through Charitable Giving
Many savvy small businesses are affiliating themselves with charities to market their
businesses. Not only is it a primary means for developing a powerful network but also it
helps others in the process.
People like to associate themselves with businesses that support causes, which help
disadvantaged people in a meaningful way.
Don’t think that charities are oblivious to your motivations. Most charities today
understand your secondary purpose for participating in charities and are experienced at
helping you receive a return on your charitable investments.
In Which Charity Should I Participate?
Choosing a charity is sometimes confusing. Each has its own demands on your time and
a variety of different positions in which to contribute. The following are three criteria
you should consider when seeking out a charitable organization with which to partner.
Criterion # 1 - Look for charities that you believe in and to which you have some
affinity. Not only will it be more fun, but also you’ll be happier giving your time and
means.
Criterion # 2 - From a business standpoint, look for charities that will give you
meaningful exposure to a large number of influential people.
In my corporate consulting days most of the partners sat on the boards of various
charities with other business executives. You’ll also want to volunteer your time in a
position that will show your talents and skills.
Criterion # 3 - If you are sponsoring a charitable event, try to choose one in which your
target market would participate. For instance, if you run a senior living community,
consider getting involved with charities for retired veterans. If you manage a sporting
goods store, consider sponsoring a little league baseball team.
Criterion # 4 – Does that charity promote a religious, political, or social agenda that is
questionable or controversial in any way? The last you want is your business’ reputation
to be soiled by associating with a controversial charity. In addition, make sure you check
out the charity’s history to be sure it has a clean slate.
Use Publicity to Associate Your Name With That Of the
Charity
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Linking your name with the charitable cause is an important part of charitable marketing.
Even if you are participating in a charity for altruistic reasons, there’s no reason why you
should not benefit from the resulting positive exposure. Here are some ideas to maximize
your exposure:
1. Publicize your donations of goods or services to charities by sending press releases
and photos to the local media.
2. Include your charitable involvement in your marketing materials such as newsletters,
brochures, signs, displays, advertisements, and commercials.
3. Get involved with high-profile causes that attract the media’s attention.
4. If you have given significant support to a program, ask that it be named after you or
the name of your business.
5. Give away information about your charity as a part of your business transactions such
as placing pamphlets in your retail outlets, having employees wear clothing or pins
and buttons publicizing your charity, or placing charity information with your product
when it ships.
6. Lastly, be sure to ask your charity to recognize your support in their publicity efforts.
Market Your Products and Services To The
Constituencies of Your Charity
Most charities have thousands, even millions of people that either belong to the charity
or who have some type of affinity with your charity. These people make excellent
prospects for your products or services because of your indirect association with them.
Use these ideas to sell more of your products and services to your charity’s affinity
group:
1. Direct market to the employees, clients, members, family members, and any group
that is directly associated with your charity. Make this group one of your niche
markets by creating a marketing program tailored to their wants and needs.
2. Advertise your products and services in the communication vehicles of your charity
such as newsletters and magazines.
3. Offer special discounts and targeted promotions to people who are associated with
your charity.
4. Consider offering a percentage of the sale of particular products or services as a
donation to your charitable cause.
5. Develop a ‘membership program’ or a ‘preferred customer program’ or even a ‘buying
club’ for constituents of your charitable cause by offering special benefits to
members.
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Invite Your Charity to Market Your Products or Services
If you want to put your marketing in overdrive and multiply your charity marketing
efforts consider inviting your charity to market for you in a way that you and your charity
receive a significant benefit.
Idea # 1
Invite your charity’s members to sell coupons for your business and keep a percentage or
the entire amount of the proceeds. A good example of this would be to allow local high
school band members to sell coupons to the neighborhood that you service. Auto repair
shops, chiropractors, beauty salons, massage therapists; fast food restaurants can all take
advantage of this tactic.
Idea # 2
Designate specific products as ‘charitable’ or ’cause-related’ products that, when sold,
financially benefit your charity. Invite the charity to promote these products. For
instance, if you own a barbershop, a portion of the proceeds from all haircuts done on
Tuesdays could go to your charity.
Idea # 3
Invite your charity to sell admission tickets to a special sale, celebrity appearance, or
grand opening to build traffic for your business. Allow the charity to keep all the
proceeds, while you benefit from the increased traffic.
Idea # 4
Create ‘packages’ during special times of the year such as Easter, the Fourth of July, or
Memorial Day that can be donated to your charity or even sold to them at cost. They in
turn can resell the packages or you can sell the packages and give a percentage to your
charity.
Partner With A Charity to Target a Niche Market
Charities, like businesses, are interested in building their membership base. The best way
to do this is through marketing to specific niches that are inclined to develop an affinity
with your charity.
Partnering with your charity to market to a niche will bring new customers to you and
new members to your charity.
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For example, suppose you owned a fitness center. You could partner with a health
related charity for senior adults by doing targeted promotions offering them free health
classes in your fitness center.
Using your name and the name of your non-profit charity in your promotion will lend
credibility and breed trust in your offer.
If you manage a financial planning firm you could partner with the American Association
of Retired Persons and provide free tax consultations at the local library.
Or suppose you invented a product such as the mentholated candle (visit
www.vaporcandle.com). You could partner with the local health clinic to jointly promote
flu shots and your candle product.
Create a Co-op Business Venture With Your Charity
Taking the idea of charity partnerships a bit further you may consider establishing a fulltime
commercial venture with your charity. Both parties would provide specific
resources to run the venture.
For example, you could provide the financial funding and the charity could provide the
staff, expertise, and equipment. Although there are a lot of legal and tax issues to address
with this strategy, many such ventures are being established with success.
Don’t Forget The Networking Opportunities
Perhaps the biggest advantage, from a business standpoint, to be involved with a local
charity is the opportunity you’ll have to network with other like-minded professionals.
If you are an independent professional such as a consultant, C.P.A., lawyer, insurance
agent etc., this may be the primary source of business for your firm. Make sure you put
your new friends on your networking list and make it a point to keep in close contact with
them.
Send thank you cards, meet for lunch, make brief phone calls, remember birthdays, and
include them in your newsletter to stay in touch. Make sure that you attend meetings and
events where other professionals will be. Volunteer to sit on boards or committees when
time permits. You might even consider urging your employees to become involved in
charitable networking activities to extend their sphere of influence.
Conclusion
Although this article has been about building your business through charities. Your
primary motivation should be to help other people. We should all leave this world a
better place. Hundreds of opportunities exist for you to make a difference in your
society.
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My wife and I are personally involved in a charity called Families Supporting Adoption.
We have two of the most beautiful children in the world that joined our family through
the miracle of adoption. We have started a non-profit website for people who are
involved in adoption to share their heartfelt stories of successful adoptions.
When I was a college student I chaired the ‘Gifts From Santa’ program, which sent gifts
purchased by students to servicemen serving overseas. I was once a young serviceman
who served overseas during several holiday seasons and have experienced the loneliness
of being away from my family. It was my small way of giving something back.
My wife and I have established our own little special charity for a family in Bolivia that
has children with severe medical challenges. Believe it or not, our dollar goes a long way
in a foreign country. This one activity has been a great blessing to our family and theirs.
In fact, we probably benefit from this charitable act more than our Bolivian family does.
Everyone has a potential affinity with a charitable organization. Search one out this
holiday season and enjoy the sweet feelings you’ll surely receive from helping someone
else. And don’t feel ashamed to profit from your charitable giving. Hundreds of
charities are searching for special businesses to help them in their cause. Find them and
lend your helping hand.
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Bumps, Up-sells, Cross-sells, and
Down-sells
Too many small business people spend inordinate amounts of time and money trying to
increase their profitability by attracting new customers, when all along they’re allowing a
goldmine of profits to slip by right under their nose.
What is a “Bump?”
Yes, on each and every transaction you have the opportunity to increase your margins
dramatically with a simple “bump” or “up-sell.” Bumps are offers made at the point of
sale by giving a simple suggestion.
For instance, my son and I go to McDonald’s every Saturday morning. He likes to meet
new friends and play in the children’s recreation area, and I like to sit down and read a
book. I always order a regular breakfast and each time I go to order, the counter person
asks me if I’d like to have the “big breakfast” instead for only a dollar more. This is a
good example of a bump.
Bumps Add Up!
Although it only amounts to an extra dollar in revenue for that order, on an annual basis
McDonalds rakes in millions of dollars based on that one simple suggestion. You see, an
important marketing principle to understand is that when people are in the act of buying
something, they are in the buying mood and are highly susceptible to buying more.
This is especially true if you’re giving a related offer. Why wouldn’t your prospect want
to buy more of what they’ve already decided to buy, especially if they can do so at a
heavy discount?
Nine Simple Ways to Create a Bump
There’s a bump for everything — you just have to be creative. The following are nine
ways to create a bump:
Bump # 1: Unbundle your product or service and offer one of the pieces of your bundle
as a bump.
Example: Unbundle a training kit and offer one of the CDs when selling the training kit.
Bump # 2: Offer instructions on how to use your product on video, CD, or a manual.
Example: An instructional video when selling a new lawnmower.
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Bump # 3: Offer additional tools to make your product or service easier, faster, and
simpler.
Example: A hands-free car adapter when selling a cell phone.
Bump # 4: Offer a low-priced complimentary product.
Example: A hand shovel when selling a full-sized shovel.
Bump # 5: Offer an extra unit of your product or service.
Example: Two pans instead of one.
Bump # 6: Offer something to clean your product.
Example: Lens cleaner when selling sunglasses.
Bump # 7: Offer a “secrets of” special report.
Example: Secrets of Do-It-Yourself Beauty Makeovers when selling a haircut.
Bump # 8: Offer a consumable product.
Example: A set of VCR tapes when selling a VCR machine.
Bump # 9: Add extra shipping and handling.
Example: Add a shipping and handling fee 30% above the actual cost.
The Importance of Scripts When Bumping Customers
Scripts are essential for bumping customers. Your script should be a simple suggestion
made to the customer at the point of sale. After deciding on your bump, create a script for
your employees to use. Make the script simple so that your lowest level employee can use
it effectively. More than one or two lines usually tend to confuse employees (especially
lower level associates).
Now that you have a script and you’re comfortable that it’s working, weave it into your
business process. By this I mean, put measures and controls around it to make sure it’s
happening and being delivered effectively.
You might do this with periodic mystery shoppers or simply calculating a percentage of
bumps by employee and charting it. When you see the bumps-per-person go down, it’s a
flag that something isn’t right.
You’ll be amazed at the power and the profitability of a simple suggestive bump. Now on
to up-sells.
Creating Profits Out of Thin Air Using Up-sells
Up-sells are offers made to customers for larger, more expensive products and services.
Many business people think up-sells are bumps, but in reality an up-sell is the process of
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persuading buyers to purchase either a premium version of the same product or an
additional premium package of products or services.
The key to effective up-selling is in the “value quotient.” The value quotient states that
Value = Perceived Benefits / Price. When price stays the same and the perceived benefit
goes up, value goes up. The process of up-selling attempts to increase the perceived
benefit more than the increase in price, resulting in an increase in value and hopefully a
successful up-sell.
Let me give you a few examples. Suppose your customer enters your hot tub store and
wants to buy a $3,000 hot tub. As an experienced up-seller your next move should be to
introduce them to the $5,000 model and by explaining all the added benefits of the
premium model and make an offer that includes better payment terms (i.e. for only $15
more a month you can own…) and a host of additional accessories as a free gift (stuff
they would have purchased with the smaller hot tub).
The goal is to add so much value that your offer becomes irresistible. But don’t get
greedy. As my friend Brad Anton once said, “Bulls make money, bears make money, but
pigs get slaughtered.”
Up-selling to a Package of Products
Perhaps you have a higher priced product or service package (and I hope you do). Why
not offer your customer the entire package? The following are a few examples of single
products and potential packages:
• Oil change -> Total Engine Service Checkup Package
• One Video -> Monthly All-You-Can-View Video Continuity Program
• Tax Return -> Comprehensive Personal Financial Analysis
• Dinner -> Multi-Item Coupon Sheet
• Hot Tub -> Premium Hot Tub
• Vacation Package -> Hotel Upgrade + Additional Activities
The idea is to create higher priced-upgrade packages that are offered at a discount of
what they would normally cost.
As with bumps, your up-sell strategy should be preplanned by developing up-sell scripts
and creating incentives for your salespeople to close the up-sell offer. Put some thought
to your incentive program because without it, your up-sell program will fail.
Other Ways to Offer Up-sells
There a many ways to offer up-sells other than in person. A tricky way to offer an up-sell
on your website is to send your visitor to an up-sell webpage after they have clicked on
the “Buy” link. On this page you can place a short sales letter upgrading them to the
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premium version of what you’re selling or simply selling an additional but
complimentary product.
If you’re using direct mail you can put an up-sell offer in a second envelope that goes
inside the main envelope. This creates intrigue and separates the main offer from the upsell
offer.
Every time someone buys from you, why not include a sell sheet or catalog inside the
product package that you are sending to your customer? This allows your customer to
look over and purchase even more products from you. If they’ve bought from you once
they are likely to do it again.
Once your prospect has purchased from you, put them on a scheduled follow up direct
mail program that triggers a direct mail letter to be sent at preset time intervals. So let’s
suppose your customer purchased a lawnmower from you. After the purchase they will
get an offer for an additional bag one week after the sale, an engine cleaner the second
week, a mower cover the third week — you get the idea.
The Art and Science of Effective Cross-selling
Cross-selling is similar to up-selling; however, it happens over a longer period of time.
Another word for cross-selling is “back-end selling.” If you’ve ever heard of the term
“back-end,” then you already know about cross-selling.
Usually cross-selling to your customer comes after you have established a relationship
with them over a period of time and they have purchased one or several products from
you already.
To set up your cross-selling system you should start by developing a cross-selling list.
This will be a one-to-many list, which identifies all the products you carry that
compliment (or that someone would be interested in) one product. Once that list is done
then you move on to the next product.
Examples of Complementary Cross-selling Lists
If I sold business opportunity courses such as Profiting from Real Estate, my cross-sell
list might contain:
1. Information Marketing Course
2. Internet Marketing Course
3. Stock Investing Course
4. MLM Marketing Course
If I sold marketing courses my cross-sell list might include:
1. Copywriting Mastery Course
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2. Referral Marketing Course
3. Direct Mail Marketing Course
4. Print Advertising Course
5. Free Publicity Course
If I were a CPA and I sold tax return services my cross-sell list would include:
1. Bookkeeping
2. Personal Financial Advisory
3. Life Insurance Investments
4. Asset Protection Consulting
5. Will and Trust Consulting
If I were a pest control company other services I would cross-sell would be:
1. Tree Cutting Service
2. Lawn Care and Maintenance Service
3. Landscaping Service
4. Small Hope Repair Service
5. Mosquito Repellant Systems
What Happens If You Don’t Have Other Complimentary
Products or Services
A common problem is business owners who sell only one product or service and don’t
have anything to sell as a back-end. If that describes you then you should either be
licensing other people’s products or developing joint ventures with owners of businesses
that offer complimentary products and services.
You see, your customers are loyal to you and trust you. They would rather pay for a
home repair done by you even though you do pest control than from someone who does
home repair as 100% of their business.
Your relationship with your customer has value and that value is called “customer
equity,” much like the equity you have in your home. Take advantage of it by
consistently making complimentary offers to your good customers.
Down-selling — The Little-Known Psychological Trick
that Results in Hefty Profits
Down-selling is based on the fact that if people buy respectable amounts of your high
priced product or service, they’ll buy lots of the same (or similar) product or service at a
much reduced price.
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Haven’t you ever wanted to purchase something but you just couldn’t bring yourself to
open your wallet or purse and give up the money? What if at that point you were offered
a slimed down version of that product or service at a much reduced price? The average
buyer would jump right on it. That’s the down-selling concept.
Robert Cialdini, Ph.D., in his book, Influence: The Psychology of Persuasion, noted that
people are magnetically attracted to a lower priced version of a product or service (and
more willing to purchase it) once they’ve been exposed to a higher priced product or
service in which they’ve shown interest (as compared to those who were just exposed to
the lower-priced product or service).
If They Don’t Take the Bait — Lower the Gate
Always offer the higher-priced, “bells and whistles” version of your product or service
first. If your prospect doesn’t take the bait, then present them with a better offer for a
scaled down version of your product or service that keeps the same fundamental benefits
of the high-priced version.
For instance, pool builders who sell to home owners should present their high-end megapool
that includes a diving board, automatic built-in filtration system, custom shaped
gunite molding, etc. etc. Then if the customer says it’s too much, you can offer the next
line down at a reduced price.
If you’re selling consulting services offer the comprehensive service package. If the
client shies away, then offer a scaled down version that provides the core benefits that the
client is looking for.
If you’d like to see a live Internet version of a down-sell, visit www.MakeTheGrade.com,
scroll down to the bottom, and look at the asking price. Then click off the site and read
the popup. I get a lot of customers opting for the down-sell version.
Conclusion
Bumps, up-sells, cross-sells, and down-sells can all mean significant additional revenue
for your business. In fact, your margins will be significantly higher on sales made using
bumps, up-sells, and cross-selling strategies because you didn’t have to pay any
marketing costs to get the customer…they were already yours.
To simplify this marketing strategy you always first want to up-sell and then bump on the
up-sell. After you’ve up-sold and bumped then you want to try and cross-sell your
customer more products and services. If they didn’t take the bait on your sales effort,
make a down-sell offer.
People like to receive offers on products and services that interest them. Even the
rich and famous want good deals. All you’re trying to do when you up-sell, bump,
cross-sell, and down-sell is make irresistible offers that your prospects can’t refuse.
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How to Create an Offer that Your
Prospects Can’t Resist
May I share with you a little secret about how people buy? It may sound strange but
people don’t buy ‘things,’ they buy opportunities!
It’s true. People don’t buy cars, office equipment, electronic gadgets, or even ideas. They
buy opportunities like special discounts, long-term financing, bonus products, and simple
payment terms.
When you package up all the opportunities you’ve created to sell a product or service it’s
called an ‘offer.’ They key to selling any product or service is to create an irresistible
offer that your prospect can’t refuse.
Your challenge is to create an offer so irresistible that your prospect says to herself, ‘I’d
be a darned fool if I said ‘no’ to this opportunity.’
The Risk – Reward Response Rate Equation
Before you learn how to create an irresistible offer its important to understand why
people respond to offers. Once you know this formula, it will be easy to create an offer
that is so compelling that it will be difficult for your prospect to say, ‘no.’
There is a risk – reward conversation that takes place in the mind of a prospect when
considering your offer. They ask themselves, ‘Is the promised reward greater than the
required risk?’ If it is, the prospect will usually buy. If not, they won’t.
To break this principle down further, people respond to offers based on two factors:
1. The perceived value of the offer (what you get)
and
2. The risk involved with the offer. (What you give)
In essence, you could express this relationship as…
Response Rate = Perceived Value / Risk
If the perceived value goes up and risk stays the same, your response rate will increase.
If risk goes up and your perceived value stays the same, your response rate will go down.
BUT, imagine if your perceived value went up and your risk went down, what would
happen to your response rate? It would skyrocket!
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That’s exactly what you want to do when you create an offer. You want to increase your
perceived value and lower your risk. To do that we need to know what’s inside the
components of ‘perceived value’ and ‘risk.’
Perceived Value and Risk
As I’ve already mentioned, perceived value is defined as what you get from the offer and
risk is what you have to give to receive the benefits of the offer. Again, the trick is to
increase your perceived value and decrease your risk to create an irresistible offer.
So let’s look at several elements that will increase the value of your offer and several
elements that will decrease the risk of your offer.
Elements to Increase Perceived Value:
1. Adding free bonus items such as accessories or third-party addons.
2. Giving two or more products or services for the price of one.
3. Packaging multiple complimentary products together with a lower overall price as
compared to buying the products separately.
4. Explaining why your product or service is unique and its specific advantages over
other competing products or services.
5. Explaining how well built the product is and giving proof to how long it will last.
6. Describing in detail the specific benefits that will be received when using the product
or service.
Elements to Decrease Risk:
1. Provide the strongest guarantee possible.
2. Provide free or low cost extended warranties.
3. Try-it-before-you-buy-it offer.
4. Provide low, affordable payments.
5. Provide a pay-for-performance only offer.
6. Delay payments with no accrued interest.
7. Give access to follow-on help after the sale.
8. Prove a fast or large return on investment.
9. Give actual proof of the results of the product or service using real case studies.
10. Have other people give proof of the results.
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Using one or a combination of these elements in your offer will increase your response
rate. The more elements you use to increase the benefits and decrease the risk, the higher
the response rate you’ll enjoy.
Value is Based On Perception Not Reality
You’ll notice that points 4, 5, and 6 all start with either the word, ‘explain’ or ‘describe.’
That’s because value is based on the prospect’s perception and not reality. The quickest
most inexpensive way to build value is to simply explain in detail how valuable the
product or service is. This can be done by explaining that the product or service:
• Is performed by most qualified and professional people.
• Is built with the highest quality parts.
• Is created using a very meticulous and careful process.
You can also build value by describing the benefits that the prospect will receive in terms
of ‘universal benefits.’ By universal benefits I mean, those benefits that appeal to every
warm-blooded human being. These universal benefits include the desire to:
• Be beautiful
• Be popular
• Be wealthy
• Have fun
• Not have to work
• Have sex
• Be smart
• Have power
• Be healthy
• Be loved
• Avoid pain
• Avoid guilt
Now take the features of your product or service and express the result of these features
in terms of universal benefits and you will have created immense value out of thin air.
For example, let’s use the ‘Thighmaster.’ The Thighmaster is one of the hottest selling
products ever sold through an infomercial. It was promoted by Suzanne Somers who
became very wealthy as a result of promoting this product.
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The Thighmaster was a simple device that you put between your legs and squeezed
together to exercise the lower half of your body and supposedly, tighten up your ‘buns.’
According to the infomercial the Thighmaster…
• Made you more beautiful because of your tight ‘buns.’
• Because you were more beautiful you would be more popular with the men.
• It was even fun doing exercises with the Thighmaster because it was easy to do. No
running, sit ups, squatting, or walking. You could even lay down and watch T.V.
while doing exercises with the Thighmaster.
• The Thighmaster increase your health and vitality and kept you in shape with
minimal work.
• You would never have to worry about the embarrassing pain of being fat, out-ofshape,
and having buns that jiggled like jello.
• And because you didn’t have to spend a lot of time at the gym you wouldn’t feel guilty
of not being at home when your family needed you.
• In fact, you would love you even more because of the increase time you’d now be
able to spend with them.
Did the Thighmaster actually do all those things? Probably not, but after watching the
infomercial the thousands of people that purchased the product probably thought it did.
People bought it based on its perceived value (versus its actual value).
How to Decrease the Risk In Your Offer
To reduce the risk in your offer you need to address the following questions that people
have in their minds when they consider an offer:
1. Is the price too high for what I will receive? (price)
2. If I don’t like it can I get my money back? (guarantee)
3. If something goes wrong can I get help? (warranty)
4. Does it really work? (performance)
Each one of these areas should be addressed when creating your offer. Let’s look at each
individually.
Your Price
The asking price is most often the ‘risk’ that people take to get the product or service you
offer. The closer you get to making your offer free (or perceived as being free) the less
risk you expose your prospect to and the higher your response rate will be.
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There’s no wonder why the most powerful word in marketing is the word, ‘FREE.’
Because it reduces the risk down to zero. Who wouldn’t take advantage of an offer that
provides relevant benefits and is free? Even if it didn’t work there was no risk so there’s
no harm done.
However, you can’t just give away your product or service for free…at least not forever.
But you can give:
• Free samples
• Free demonstrations
• Free trials
• Free information
• Free ’stripped-down’ products
All these reduce the risk of responding. You can also give a perception of a lower price
by…
1. Selling the monthly installment price (versus the entire price)
2. Delaying payment for an extended period of time.
3. No accrued interest with extended payment.
4. Offering a rent or lease-to-own option.
5. Offering guaranteed buy-back agreements.
6. Providing resell rights.
7. Displaying the ending numerals in a price as $.97 or $.99.
You can also reduce the perception of price simply by the way you present it. Always
give an apples to oranges comparison of your price.
For example, you could introduce your price by saying, ‘This Valuable System Can Be
Yours For the Price of a Starbucks Capuccino.’ or ‘You Can Have Your Very Own
Private Airplane for What You’d Normally Pay for a Used Honda Accord.’
Then you would go on to explain and justify how the simple monthly payment that you’d
normally pay on a Honda Accord will buy you a new airplane.
To go one step further you can actually reduce the price of the product or service by
offering:
1. Sliding scale discounts
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2. Volume discounts
3. Time limit discounts
4. Seasonal discounts
5. Discounts based on payback time (i.e. 2-10 net 30 days)
6. Manufacturer discounts (rebates)
Your Guarantee
Your guarantee is your secret weapon to decreasing the risk in your offer. You should
always provide the strongest guarantee possible. Go out on a limb. Don’t be afraid to
provide a strong guarantee because statistics are on your side.
The large majority of guarantees are never executed. There’s a erroneous perception that
if you provide an aggressive guaranteed that a slew of customers are going to take
advantage of you. That’s simply not true.
Most people DON’T…
1. Send things back when they get broke.
2. Ask for their money back if they are dissatisfied.
3. Complain when they are frustrated.
Why? It’s human nature not to be disruptive. Most people are passive and don’t take
action to resolve conflict.
Your Warranty
Warranties are like insurance, they provide security in the case that something goes
wrong. How many of you who have been paying for insurance for years and years have
actually made a claim? Statistically, very few will ever make a claim on their insurance
and the same goes for a warranty.
So, like guarantees, why not provide a strong warranty?
If the part on a hot tub usually lasts for seven years but statistics say that most people
only keep their hot tub for seven years why wouldn’t you provide a ‘lifetime warranty?’
You might have a few people take you up on the warranty after seven years but the
perceived value of a lifetime warranty will far outweigh the cost of honoring a lifetime
warranty.
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In fact, you can provide a perception of a strong warranty just by providing a phone
number or physical address to call in case things go wrong. Most people won’t use it and
if they do, studies say that it will be used only within the first three months of ownership.
Pay-for-Performance
And if you really want to make your offer ‘risk-free’ you might consider a ‘pay-forperformance’
offer. Pay-for-performance is when you give the product or service away
with the agreement that the customer will pay only when they’ve received the benefits of
your product or service.
This is the ultimate risk-free offer because it’s as close to offering your product or service
for free as possible. If your product or service doesn’t perform, you don’t get your
money.
When entering into this type of agreement, you should increase the price because you
(the seller or service provider) are taking all the risk and hence, your reward should be
higher.
Make Your Offer Believable
One of the worst mistakes overzealous direct response marketers make is to create offers
that are so full of hype that they are not believable.
This addresses the, ‘Does it really work?’ or ‘Is this too good to be true’ questions that are
barriers to closing the sale. We’ve been taught that if an offer is too good to be true, it
usually is. And it’s true!
One way to offset the believability issue is to PROVE IT!
There are several ways to prove your offer but the best way is to provide customer
testimonials and case studies. People believe comments from other people that have no
vested interest in your success.
Pictures with testimonials are strong but video testimonials of actual customers can’t be
beat. That’s why infomercials are packed with testimonials.
Case studies are also great ways to prove that your offer really does provide results. A
case study should described by…
1. Explaining the problem or situation
2. Providing the solution or how the problem got solved
3. The results of the solution
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Real case studies that show statistics, graphs, before and after photos, bank account
statements, etc. provide compelling proof that your offer really is true and that your
product or service really does work.
Reason Why
Ultimately, if you have an Almost-Too-Good-To-Be-True offer you need to tell the
reason why you can make that offer. Even if its a far-fetched reason people still need to
reconcile in their mind why and how you’re able to make such a great offer.
Common reasons why are that…
1. ‘We goofed and ordered too much stock and now we’ve got to clear it out.’
2. ‘My accountant (or boss) is out of town so he doesn’t know I’m making you this offer’
(Note: Yes, this one is a stupid reason but people still fall for it)
3. ‘Our year end is here and we are going to get killed on taxes if we don’t clear out our
stock before December 31′ (Note: Actually, this will increase their tax burden but it
still works)
4. ‘I buy from a secret source in India (or some far away land) and I can get unheard of
deals so I’m passing the savings on to you.’
5. ‘After inspecting our warehouse we found a bunch of slightly damaged inventory so
our accountant says we have to unload it at less-than-cost.’ (Note: Even I’ve fallen for
this one.)
Whatever the reason is, then tell it. People want to know the reason why!
Inject Scarcity To Compel People to Action
An offer without a compelling reason to act now is dead in the water. 99% of all people
are passive. They don’t act even if its a great offer. You have to give them the extra
incentive to compel them to act now.
One of the greatest motivators is the fear of loss and by injecting scarcity into your offer
you’re playing on people’s fear of not being able to take advantage of a good deal.
The two most popular ways to inject scarcity into an offer is to…
1. Limit the time that people can respond to the offer
and
2. Limit the quantity that you are offering.
Limited Time Offer
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Time sensitive offers provide deadlines in which prospects can take advantage of your
offer. That’s why you see so many weekend sales that end on Sunday. It compels people
to get up out off their couches and get down to the store.
It’s a good idea to always include a deadline with your offer. The shorter the deadline the
higher the response (almost).
You can’t make it so short that people don’t have enough time to act but if you hold an
offer open for a month people will just put off responding and eventually forget your
offer. Of course this depends on what you’re selling as well.
Once you’ve made your offer you should continue to remind your prospect how much
time is left to take advantage of it.
Limited Inventory Offer
This past Thanksgiving Walmart ran some commercials that offered a 3.1 Megapixel
digital camera for $150 to the first 200 people who arrived. People camped out there all
night long to take advantage of that offer!
Another type of limited inventory offer is to simply mention in your offer that there are
only 150 in stock and you’re selling them on a first-come, first-serve basis.
Limit Your Choices – Confused Minds Always Say ‘NO!’
Always limit your choices when creating an offer. You can give one option or two
options but once you give your prospect a third option they get confused. This can kill
your offer.
A marketing friend of mine from Canada, Don Campbell, teaches that confused minds
always say, ‘No.’ It’s true. People would rather not choose than have to go through the
agony of making a complicated choice.
With that said, I do believe in giving two options when doing direct mail or on a website,
Option A and Option B. Option A might be the ‘basic package’ while Option B might be
the ‘deluxe package.’
But when you’re developing a print advertisement you should focus on the one action you
want your prospect to do. Build your whole ad around the prospect doing that one action
and nothing else.
Tell Them What You Want Them To Do…Exactly
People need to be taken by the hand and told exactly what to do. You must be clear and
concise when giving instructions on what you want your prospect to do next.
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Do you want them to…
• Visit your store today?
• Pick up the phone and call?
• Click the order button?
• Fax in their warranty now?
• Email you within 24 hours to register?
Notice that each of these ‘call-to-actions’ starts with an action verb. Even though you
might think its obvious what your prospect should do, you still need to tell them.
Then you need to tell them what will happen when they do respond. For instance, ‘If you
cal right now and order your free report, I will personally go down to the post office and
send it to you via priority mail.’
When you add ‘what happens next’ the offer becomes clear and concise and leaves no
confusion. Remember, confused minds always say, ‘No!’
Know the Objective Of Your Offer
So far, we’ve just been talking about offers for a product or service but there are offers to
get your prospect to do many things.
For instance, you might just want your prospect to call your place of business or you
might want them come down to your store.
Before you begin to develop any advertisement, design your website, direct mail piece,
promo video etc. you MUST KNOW YOUR OBJECTIVE!
What is it that you want your prospect to do? Then, and only then can you create the
right offer. Here are some examples from the pool and spa industry:
Offer to call your store:
The first 20 people that call today will not only receive our Special Report
titled, ‘Five Steps to Eliminating Back Pain Using Hydrotherapy’ but you’ll
also receive a 30-minute taped seminar titled, ‘The Secret to Raising a
Close-Knit Family.’ This audio seminar is usually sold for $29.95 but is
yours FREE if you are one of the first 20 people to call today.’
Offer to come down to the store:
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Acme Pool and Spa was able to make an awesome deal with a major travel
company to send 20 people on a relaxing three-day vacation. We had to
do some serious arm-twisting to get these wonderful vacation passes, but
we finally prevailed.
We will be awarding the first 20 visitors to our store today with a
complimentary three-day, two-night vacation package to any one of ten
vacation areas in the U.S. This offer won’t last for very long so get here
early before all the free vacation passes are taken!
Conclusion
Creating an irresistible offer takes time but the rewards are great. If you increase the
perceived benefits and lower its associated risk, you will improve your response rate
dramatically.
Here is a checklist that you can use when you create an offer…

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