Harnessing the Power of 'Soft Cost'...
It's no surprise that many businesses go into siege mentality when the economy tightens.
They cut back on marketing and advertising, and generally batten down.
Yet history shows, companies that maintain (or increase) their marketing during such times are more likely to win a lion's share of the market, and come out with even healthier profits.
This is not suggesting that you be cavalier or unwise with your marketing spend. Instead, it is a time for aggressively using 'creative' marketing to accelerate your acquisition of customers.
What do we mean by 'creative'? Here is an example...
Harnessing 'Soft Cost'
Soft cost is a powerful concept for accelerating the acquisition of leads and new clients. Soft cost refers to something you can offer with high-perceived value, but a low delivery cost.
Something you can offer for a small outlay to win an even bigger prize.
The classic example of course, is 'Buy one pizza, get the second one free'. The second pizza costs perhaps £2 (in materials), but has a perceived value of £14.
Overall, the pizza store makes a profit on a sale they otherwise wouldn't have got, and ideally wins a new customer they can nurture for the long term.
Let's say you're a software company with a product you sell in 'good times' for £500. The 'hard cost' to you of this product is say £25. (That covers the packaging, manual and installation discs.)
What if you offered that product for FREE when new clients buy your flagship £1500 programme? In their eyes, they've just got a £500 bargain. In your eyes, you've acquired another long term client for the extra 'cost' of £25, earned full margin on the flagship product, and now have a new client who may go on to spend thousands more with you.
There's any number of combinations and permutations for soft cost strategies.
This is not a strategy for those who can't look past the profit on the next sale.
The key requirement is that you have a strategy for producing future revenue from your acquisition.
And also, that you 'position' your attractive offer as adding value to the new client or customer as part of a commitment to a long term relationship, not as a mere discount.
Until next time...
Take a valuable first step in getting control of the growth of your business today and apply for a free Revenue Opportunities Analysis - it could be the best 75 minutes you spend in your business all year.
Based on an article by Chris Newton, founder of Results Corporation.