Studying economics in College many moons ago, I was fascinated a term used by the professor. “Loss Leader”. Although my Professor used to drone on for hours, I did remember something. Supermarkets pioneered this in order to draw customers into their store. Offering something way below cost price that was popular, in need and colourful to advertise was the key. Washing powder, cornflakes and butter drew in the crowds.
Once in, customers were then up-sold vigorously.
It happens all the time in retail stores so now is the time for us to bring the concept into our companies.
In all your client acquisition methods, work on the basis that you bring customers into your fold by offering them something free or low cost, once in your “club”, you up sell them. Don’t be tempted to sell to them straight away, just give them a taste of what you’re about, then up-sell them.
Let’s start with prospecting and the much hated cold calling. Instead of trying to make an appointment or to sell something, make it so the prospect would be happy to receive something from you. Something free. Any excuse you can find to send them something of interest and of real use and value. Then put them into your incubator or your prospect funnel and continue to provide them with free valuable stuff and maybe something at a very low cost. But don’t make it the cheesy fact filled white paper which is then followed 2 days later by the heavy appointment making phone call. Come on, wise up, customers have changed.
Remember the customer is now in control, not you, so help them inside your company, and let them participate in what you do, subtly and carefully. Don’t sell, just open the door.
Website visitors should be encouraged to join your “club” whatever that looks like. An eZine, newsletter, password access, free app for their iPhone, free downloads, anything. Once involved in your game, give them more things then sell them something very low cost – your loss leader. Put the cost down to a marketing spend if you need to.
Once they’ve enjoyed the cost item, then sell them your usual items at normal price or maybe a member discount.
Here’s the facts. Research carried out by Google shows that:
- High performing websites capture 15% of visitors into their “club”
- Of this, 4% take up the early cost price offer
- And of this 30% take up the full price deal
You can see why can’t you? Once they’ve experienced your service, your quality, your product feel, they want more, trust you more, and believe in you. Moreover you’re helping the customer to buy, in this decade customers don’t want to be sold anymore; they are empowered to buy instead.
So I must thank my economics professor from all those years’ ago for loss leaders, but he does remind me of the economics teacher, Ben Stein, in Ferris Bueller’s Day Off. You can watch the clip here on YouTube, it’s a real hoot. Click here