Sunday, April 01, 2007

Week 31 - Fears are BAD, Repeat Offers are Good

There are certain types of businesses or organizations out there that can refer the perfect customer to you. The type of business will be different depending on your industry, but your goal is to establish the criteria around the perfect customer referral. Take some time to decide just what type of customer you want and then list all of the businesses that have these people as customers. Remember that even though a business may appear to have your ideal customers this does not automatically mean they will be a good source of referrals. Once you have your “ideal” list, eliminate all those you feel would not be in a position to influence the customer, then call on the businesses that remain.

There is a golden rule to making these relationships work: address fears up front.

Sit down with the business owner, explain how your product or service could benefit the customers they already have. Once you have covered their initial questions, ask them what their remaining fears may be! You might not want to be that direct, but the point is everyone has fears, fears you might give their clients bad advice, fears you make lure away their client and many more. Get them out on the table and be sure you are in a position to allay the fears. If you do not ask this crucial question your referral program will more than likely fail.

You can get really creative with referral programs. McGrath Real Estate is one of the most successful real estate brokers in Australia; they were constantly sending new leads to a well established and trusted furniture removals company. Instead of getting nothing in return or even a small payment (which wouldn’t have felt right in this instance) the removals company dedicated the sides of their removal trucks to advertising the McGrath business. Given the amount of time these trucks spend out on the road this truly is a deal that works for all parties.

How repeat offers can ignite your bottom line

Earlier I highlighted that your employees need to see your customers for their lifetime value rather than their single transaction value. The best way to ensure that the average customer does actually spend what you expect over their lifetime is to offer them an on-going “no-brainer” method to buy your product or service. Magazine and newspaper publishers already do this instinctively via subscriptions, but how many other industries can apply this method?

You may already be signed up to these services yourself. You know, the ones where your credit card is charged until you decide to cancel? Getting your customers onto such a program will dramatically increase your revenue. Inertia is a powerful thing – what I mean by that is than once your customers have subscribed to your product or service, they are likely to take a lot longer to actually make the call and cancel if they decide they no longer have a use for you (we will save this for another week, but do you have a program for those customers that do try and cancel the services you provide? You need to hold onto them so line up an impressive list of offers to turn around the conversation).

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