How To Grow Your Business By Making A Great Offer
How can offering your targeted customer an insanely good deal make you a lot more money in the long run?
At my local Softbank store (Softbank is HUGE in Japan, not so much in Barrie), they will give your family money if you leave your existing phone company and switch to their coverage. I've seen them offer is upwards of $1000!
There isn't one.
Softbank believes that an acquisition cost of $250 per user in a family of 4 is well worth the investment. Why do they offer such an incredible deal? They offer an amazing deal because Softbank is trying to win your business for life. They will gladly lose a bit of money on the front end of the deal if it means you and your family will become lifelong customers.
How much should you pay to acquire a customer?
It doesn't need to cost you anything to acquire a new customer. You just have to offer them value that they will feel good about. Granted, your offer could leave you with no profit margin for that particular product or service but that is short term thinking.
That initial offer is the price you are paying to acquire a new customer. This should be covered by your marketing budget. Some new businesses survive without much marketing at first and eek out a living relying on referrals. Friends, friends of friends and customers you had accumulated throughout the years and were waiting for you to open.
These types of business typically dry up and business owners tend to focus more on improving their service than actually finding people to pay for it.
Softbank pays out $250 per family member because they know you are signing a long term contract that will start to make them money within a year or two, and could mean the customer stays for the rest of their life.
The profit comes after the initial sale.
So what can you give away for free?
Think of all the problems that your business can solve. Write a list of them. Choose 1 that you can solve cheaply or for free and offer it to them. Make them like you. Make them trust you.
When my friend opened an English Language school in Japan he had zero students so he offered a 1-month free trial to everyone in the neighborhood.
70 students accepted his offer! However, at the end of the month, student after student after student left never to return.
On the bright side, 20 students stayed which meant he could keep his doors open.
He gave those 20 students a valuable positive experience whilst building credibility and trust.
Fast forward 14 years and my friend has 2 full-time teachers and over 200 students. Each student is worth well over $1000 a year and stays an average of 3 years.
His initial offer worked. He enticed people to come into his school by giving them the best "bribe" he could....his time. With a little bit of long-range strategy, my friend was able to gamble on himself knowing that if enough people were exposed to his unique teaching style his schedule would slowly but surely start to fill up.
So what about businesses that don't receive recurring payments?
Say you own a restaurant and you offer a free drink and dessert to every customer who buys a main dish. There will be some customers who come, only order a main for the free drink and dessert and never come again. Some, however, will buy a second or third drink. Some will come again next month, and 25 more times over the next 5 years.
When its all said and done, you've had a lot of NEW people come into your business and try your food.
If your new customer has had a great experience at your restaurant they are now a fan. Even better, they may start telling all of their friends about your restaurant and become your best salesperson.
This only works if your food is good, so give them something is truly representative of your business. This is the worst time to be cheap.
Top brands like Amazon, Apple and Ikea are thriving because they have built trusting relationships with customers who keep coming back. Apple’s plan is not to sell an iPhone to every person on the planet. Apple’s plan is to sell 20 iPhones to every person on the planet. Plus 10 Ipads. Plus Apple music. Plus 25 other products or services.
Businesses become successful if they Upsell, Downsell & Cross Sell.
The initial sale is the most important one so you need to incentivize that first one as much as you can. When you go to Ikea one of the first things they'll offer is a whole bunch of extremely cheap items you'd be crazy not to buy. Of course, I'll grab a $1.99 GNARP (a 3-piece kitchen utensil set).
They’re breaking the seal. You are now in shopping mode and they will try to cross sell, upsell, and downsell you everything in the store. How about a new table? And some chairs that match it? Some new cutlery? Might as well have some Swedish meatballs and your kids are looking longingly at a 2m anaconda glove puppet. You have now spent $500 and you are happy.
We, as humans, love to overbuy. We just need a little push.
Is Digital Marketing Expensive?
The fastest and easiest way to get these offers in front of the people most likely to accept them is through targeted digital marketing. The price of this can vary depending on what you're offering - selling a house is going to take a lot more time, effort and money than selling an iPhone cover.
The advantages wholly cover the cost though. Firstly you can target what type of person you think is most likely to buy from you.
I get ads from good digital marketers offering me video production software and camera equipment because that’s what I’m interested in. My wife gets travel ads because she’s been looking at places to go on our next vacation.
When we click on one of those ads or watch some of the videos, that is tracked and we are sent follow up retargeting ads. If we click through to their website or landing page that is also tracked and we get yet more ads.
If at any point we entered in our contact details, they can now directly send us ads and offers.
It will cost them nothing and they can do it forever.
How can this help my business in Barrie?
The importance of a good offer is that it’s the first step in building trust and credibility by giving them a positive experience that will keep them coming back. People won’t trust you until you have given them a reason to trust you. Building an excellent relationship through providing excellent service is the cornerstone of any successful business.
People won’t trust you unless you have a proven to them that you can deliver, and offering some incredible value is a golden opportunity to show off what can offer and start building your brand in their head.
We'd love to help you out. Click the button and submit your question and we'll get back to you right away.
Steve is in charge of content creation for S9D Digital Marketing. His videos have been seen over 4 million times (organically) ad he prides himself on his ability to make engaging, user-based content.