If you’re not getting a lot of referrals, this could be a sign that you’re not giving all that much value.
Spending none of your money, time, or focus on getting referral customers or clients seems kinda crazy considering that referrals buy faster, they trust you almost immediately, they negotiate less, they’re more profitable, they buy more often, they more stuff when they buy, and they cost little to nothing to get.
Until you’ve fully exhausted your referral sources and methods, why the hell would you be spending tons of money on PPC or print ads or anything else that costs you money?
Being Smart About Buying Customers
When you know the lifetime value of a customer you know what you can invest to start a relationship with a customer. And you want to make the barrier to entry easy for the prospect to clear.
So one way to go about doing this is seeking to break even on the first transaction a customer has with you.
You can price an entry level product low and not make any profit on it.
You could pour any profit you make on a first transaction back into marketing or selling.
You could pour any profit on the first transaction into some bonus that makes your offer irresistible.
Think about how the CD and Book clubs used to give you ten CD’s or Books for ten cents.
They figured out the math in their business and knew they could easily afford to bite the bullet on the front end because the back end was so profitable. They were smart because they found a way to make it so easy to get the buying relationship started with them.
You have to be very wary of getting addicted to making money on your acquisition efforts.
If you do, you’re severely limiting what is possible for you. Making money on the front end is a poor tactic – breaking even or less on the front end is a strategy geared for the long haul.
You looking to get the perfect buyers in the door for the sequence of transactions you have down the line. If you don’t have a profitable sequence of products or services you’re offering after someone comes in the door, you need to change this because you’re completely missing the boat.
There are segments of your market that want, need, and deserve more from you.
If it is in the customer’s best interest, you should give them whatever they’ll buy. There are a lot of people in your market who aren’t just satisfied with a “basic” experience with you and would joyfully pay for a “deluxe” option.
One thing to keep in mind as well is that if you don’t have more to offer, look at how you can access more from others.
Almost no one considers the fact that if they don’t have everything the customer wants that this isn’t going to stop the customer from going out to get it from somewhere else.
Why wouldn’t you seek out the businesses they naturally should migrate to or do already ￼migrate to and figure out a way to make money by sending people directly to those ￼businesses?
If you only build pools but don’t sell pool equipment, why wouldn’t you figure out how to make money on selling pool equipment packages to the people you’re building pools for and get a commission on the sale from the pool company. The customer is going to have to buy that stuff anyways. Just because you don’t sell it doesn’t mean you can’t profit from it.
“Let me buy you your first consultation”
Jay Abraham had a psychologist that dealt with clinically depressed people put out the proposition that he would pay for a new client’s first $150 dollar session.
He positioned it as him paying to see how compatible they would be and if he thought he could help them and to make sure they felt comfortable with him. And if they didn’t or if he didn’t think he could help them, he didn’t want to add any more stress into their life.
This led to him getting flooded with business as a result of making the barrier to entry non-existent.
Another thing you do guarantee that a meeting with you will be profitable.
One of Jay Abraham’s clients put out the condition that if he couldn’t provide the person he was meeting with at least 10 times the value of the fee, then his services would be free and he would even absorb the client’s travel costs.
If you can lay out an awesome result that someone should expect to have happen upon meeting with you and you assessing their situation, you can do enormous business.
2. Get more money from the average transaction
3. Get people re-buying more often
The most difficult and most expensive activity you’ll ever do in your business is getting a customer.
If these customers see that you’re putting marketing and products that has their best interest in mind, they’ll gladly spend more with you more often.
A 10% increase in each of these areas equals 33% MORE revenue. So if you were making $200,000 dollar a year and you only improve each of these areas by 10%, you’re now making $266,200 dollars a year. Even if you’re lazy, you can accomplish 10% more in each area. If you’re ambitious, those percentage increases can be crazy high especially if you.
Enter new markets every year
Show up with new products/services every year
Buy a competitor’s business or assets every year
“The purpose of a business is to create and keep a customer.” ~Peter Drucker