The Question That Increased Sales By 13.75%
Martin McParland runs Lucky Leo’s Casket Agency in Stones Corner, Brisbane. Whenever a customer comes in to buy a lotto ticket, (say a Super Quick Pick), Martin always asks them the same question: “Would you like to try your luck with a Super 66 or a Scratchy with your change? You might turn it into some real money.”You see, nine times out of ten, the customer is handing over a ten dollar note for the $8 Super Quick Pick and has enough change to buy a $1.10 Super 66 or a $1 or $2 Scratchy. Martin tells me that 40% of customers say “Yes” with a result of an increase in the average value of each sale of 13.75%.
Martin says that the real secret to making this work is the way he asks the question. There’s no doubt that he has one of the friendliest customer relations manners I’ve come across, but it’s not just the smile and natural cheerfulness that makes it work… it’s the phraseology and strategy he employs. Notice how the question is phrased so that the option of keeping the change is less appealing than turning the small annoying loose change into notes. And he’s suggesting something that is much less than a ten dollar note they’re handing over. If he asked customers to buy something that made them dig out more money, it wouldn’t be anywhere near as effective.
This is a straight copy of the McDonalds cross selling technique “Would you like fries with that?” It may sound simple, but it generates an additional $22 million in sales for McDonalds!
Mass Marketing At A Fraction Of The Cost
Next time you’re driving around the Gold Coast, keep an eye for cars with a large ‘ARCHERS’ sticker on the back window. Archers is a smash repair and towing firm on the Gold Coast and they have an army of cars advertising their company. Owner, Rod Archer, is truly customer-focused.
If you have work done on your car, he gives you an attractive sticker to put in your back window. The sticker entitles you to a number of different benefits depending on the level of work done. For example, at the top end, your sticker means that you can go into Auto Affair Car Wash on the Gold Coast and get a free car wash for life. Plus, if you break down, they’ll tow your vehicle free of charge. If you’re having body repair work done, they’ll touch up any small chips and dents as well at no extra charge.
Now that’s great service. But it doesn’t stop there. There isn’t a car that leaves their shop that hasn’t been detailed free of charge. Customers are absolutely delighted and as a result, Rod wins unbeatable loyalty without regard to cost.
Remember, customers don’t necessarily want the cheapest price, but they always want the best value. With this approach, Rod builds real customer loyalty. And not just with customers. The stickers are actively sought after by non-customers who on occasion, have offered $200-300 for one and been turned down. Archers’ stickers are available only to Archers’ customers.
Smart Marketing Replaces Advertising
Is there a smarter, cheaper way to reach customers other than advertising? Maybe. Why not ask companies who have an identical customer profile but are not competing with you, if you can rent their database list? After all, they’ve already spent many thousands of dollars to acquire the names of people in the market so why not get some additional return on that investment? Provided you’re not competing with them, you can tap into this for a fraction of the cost and get directly to the prospects through direct mail.
Recently, we suggested this concept to clients of ours who run a specialist travel agency. They specialise in packaged health spa trips to Piestany in Slovakia (among other destinations). These health spas are particularly good for people suffering from locomotion disorders like arthritis and rheumatism. Instead of advertising in The Sunday Mail’s monthly “Looking Forward” feature, we recommended they talk with the owners of the motorised stair manufacturers and some of the other advertisers from the previous features.
Let’s face it, if you’ve bought one motorised staircase, it’s unlikely you’ll buy another and I suspect that company doesn’t know about having back-end products to sell their customers, so theirs is a one-off sale. Or is it? What if they rented their list of customers from the last five to ten years? They have nothing to lose and everything to gain since they won’t be making another sale to these people. Yet they could be making additional revenue from renting the list.
There are basically two ways you can reimburse the owner of the list. (i) You can pay them per name or (ii) You could offer them a commission on the sales you make. Or you could make it a combination of both. The best way is where you pay for results. If there are no sales – you pay nothing. One of the most effective methods is to have the business owner send out a letter on his own letterhead so it comes from someone the customer knows and trusts, rather than a complete stranger. Of course, this only works if that business owner has a good rapport with his customers. But whichever method you choose, it’s a good way to reach qualified customers at minimal cost.
Why Cross Promotions Are So Effective
How would you like advertising for FREE? That’s right – free! Free advertising is a new concept to most business owners, but the power of cross-promotions was certainly understood some 200 years ago when used by Benjamin Franklin. In some early editions of ‘Poor Richard’s Almanac’, readers could take advantage of valuable coupons from various merchants of the day. Ben evidently felt that discount coupons added to the value of his publication, making it easier for him to sell.
Cross-promotions are sometimes called “poor man’s direct mail”, a term not so richly deserved, for they have made many a merchant anything but poor. Take for example, Nautilus Fitness Centre. Nautilus’ manager met with the owner of a local tennis club to explain how the two companies could work together. After explaining how Nautilus’ equipment could help prevent tennis players from tennis elbow and increase the power of their serves, he provided the owner with special half price coupons for introductory memberships for the members of his club. The coupons were then distributed as a value added service from the tennis club, giving the members a little extra something for their loyalty.
Best of all for the tennis club owner, the program cost nothing! Nautilus paid for the paper and printing of the 1,000 coupons that were inserted in the tennis club’s monthly newsletter. Nautilus had eight coupons redeemed for the introductory memberships. Five of those eight were converted to one-year memberships and one to a six-month membership. Gross sales for the promotion totalled $1803 and it only cost Nautilus $40.
The cost? The principle cost was the printing of 1000 coupons which were distributed for free. But why would anyone want to pass out your advertising to their clients for free? They wouldn’t – unless there is something in it for them. Therefore, you must create a perceived value for your cross-promotion partner. This is usually in the form of adding value to their customers and can be done in two ways; either as an unexpected gift or as a tool to help sell their product.
A wedding function centre may be able to link up with several cross-promotion partners and offer a 10% discount off car hire, floral arrangements, photography etc, when you buy from them. Their price can then be even be higher than their competitors without losing customers since they are providing savings on associated products that their customer would have to purchase as well.
Think of businesses with associated products or services that tie in well with yours and approach them with a view to what’s in it for them. Show them what they’ll get out of it not why it’s good for you. The more attractive you make it for them, the more they’ll co-operate.
Consider, vertical markets that you’d like to target and find out which companies have newsletters you could write an article in or insert a flyer/coupon. When you do this, it appears to the reader that your product/service is being recommended by the company sending the newsletter. Or simply insert your promotional piece in their mailing.
When accessing another company’s database like this, you must make a strong offer. You can afford to do this since your advertising cost is so low. Explain that it’s exclusive to members/clients of the club or company who is sending it. What other businesses could you work with to cross-promote?
One last thing. Don’t forget the other side of the coin; you can have your invoicing costs by getting another company to insert a flyer in your mailing.
Market Marketing
Fred Madgen has a Kwik Kerb franchise. They make that instant curved garden edging. Instead of spending thousands on advertising in local papers, Fred bought a weekly stand at the Rocklea markets. Every Sunday morning for five hours, Fred demonstrates his product to people who wander by. When you stop to consider that the Rocklea markets have 10,000 people go through every Sunday, you can perhaps understand why Fred says this one marketing idea accounts for around 70-80% of his business.
When he first started, the stand was more like 90%, but as business has grown, he gets more referrals so it’s the percentage that’s dropped, rather than the amount of work he gets from the stall. The stall costs $100 per month – $25 per week. That’s 25 cents for every 100 people he is exposed to! Compare this to taking a stand at a trade show – that’ll set you back at least ten times the market rate per day.
Simple Ways To Reduce Direct Mail Costs
1. ‘Piggy-Back’ Mailing. This is when you insert your mailer into someone else’s mail out. For example, Super Cheap Auto regularly include a flyer with Queensland Transport’s registration notices. It’s perfect target marketing for Super Cheap Auto since they know every flyer is going to a car owner.
Super Cheap would be contributing to the cost of the mailing but it would be considerably cheaper than sending a stand alone letter which in many cases will be tossed in the bin. Not so, with Queensland Transport mail! Alders Duty Free insert a 5% discount voucher with every international air ticket Discount Flight Centre give to their customers. Again, perfect target marketing. Everyone flying overseas is a potential customer to a duty free store.
2. ‘Twin-share’ mailing. This is very similar to piggy back mailing. However, instead of one company inserting marketing material into the other’s mail out, both companies join together and share both the mailing costs and databases.
This way your offer is exposed to a whole range of potential new customers who will have more confidence in your company since you are linked in with another company they know and respect.
Companies with complimentary products/services are ideal partners for this strategy, for example, pest controllers and plumbers; accountants and insurance brokers; wedding photographers and reception venues.
3. Sell the reverse (blank side) side of your flyers to a complimentary business. When you consider that the vast majority of letterbox drops go out printed only on one side, you’ll see my point. By adding another offer to your flyer, you increase your chances of success since some prospects may be more interested in the other offer. This means they will keep the flyer instead of throwing it in the bin which gives your offer a better chance to be accepted by them or someone else in their household. Regardless, you’ve still halved your costs.
Team Up With Your Competitors So Everyone Wins!
An article in Success Selling Magazine suggested that teaming up with competitors may not be such a bad idea to boost sales. And if you’re doing it tough in a down-turned market, it may be the fastest way to get results.
In Chicago, ten competing hat designers revved up their profits by forming the Millinery Arts Alliance in June 1995. The alliance sponsors a variety of events to encourage hat wearing, which hasn’t been routine among women since the 1950’s. Currently, the alliance hosts weekly dinners at a local restaurant at which hat-wearing patrons receive a free desert. The milliners take it in turns selling their wares at the event. The designers organise a the annual Feast of St. Catherine, which honours the patron saint of milliners.
They also host a party that benefits a charity, as well as a tour of their shops. Some of the designers report that their sales have jumped 50% since they created the group. And sharing the customers is not a concern. “We take the long view,” says alliance president Christina Bevilacqua. “Anyone out wearing a hat is better for all of us.”
The Fastest Way To Increase Profits
I once sat down with Diana O’Hanlon from Select Video to show her ways of increasing profits. Select Video hire audio/visual equipment for functions. After some discussion, I discovered that Diana hadn’t had a price increase in quite some time so the obvious and most immediate way of increasing her profitability was to put her prices up.
When I suggested this, Diana’s reaction, (like most people), was to think that all her customers would leave and go to her competitors. It took some doing, but finally I convinced her that this wouldn’t happen. She put her prices up by 5% and increased her June turnover from $28,000 to $40,000. Dianna says that it’s the best June she’s had in seven years!
She was initially scared that customers would complain if she put her prices up. However, not one of her customers complained. A couple actually mentioned it was about time she put her prices up.
Stand Out From The Crowd
I was on my way home with some friends after a few drinks on a Friday night and as soon as I got into the taxi, I wondered why he hadn’t put it in the boot. His guitar that is. It was positioned directly between the two front seats of his cab. But when we pulled up to a red light, Tom, our driver, picked it up and started picking. He played all those great old classics that everyone knows the words to: “The Gambler”, “Hotel California” and “In The Jungle” etc, and he sang reasonably well. It wasn’t long before he got us all singing too. And that was the trip home – every set of lights, he picked up the tune and started strumming.
It was certainly the most entertaining taxi ride I’ve had for a while. When we reached our destination, I gave Tom a ‘better than average tip’ for the fun and asked if that was a regular thing – bigger tips. He told me that his tips had gone up five times since he packed his guitar on board! Here’s a business owner doing something different, and it’s working.
John Muldoon sells commercial waterproofing products and as a result, he’s in contact with a lot of building firms and architects. When John first visits potential clients, he leaves behind a ring-binder type folder with his brochures and technical details of his product range.
But John’s folder is a little different…
John has inserted tiny, battery-powered, red flashing light in the spine of his ringer-binder. It’s certainly a talking point when he first walks in but you can bet when they think ‘waterproffing’, they think of John and his red flashing folder. The battery lasts about three months so he leaves a truly lasting impression. What a way to stand out from the crowd!
A few years ago, Mark Blunski and partners started a chain of shoe stores in Wellington, NZ, with some fairly interesting marketing ideas. The business started (as so many do), when three staff members of a major shoe retailer decided to start their own business – Mischief Shoes.
This was the whole thrust of their marketing – mischief. They had a blackboard on the footpath outside their store with a message changing daily. One day it might read “20% off all shoes for people wearing yellow ties!” and the next day it might read “15% off ladies shoes for all people wearing red socks!” and so on…
It may sound a little silly, but it worked. I’ve personally witnessed people enter the store wearing bow ties cut out of yellow paper just to get the discount! The main thrust of their marketing was designed around the name of the store – Mischief. This is just one of many crazy ideas they came up with (and still do today), some seven years on. Simple, fun-oriented marketing like this helped them grow their business from one store to four stores in under two years. in three years, they grew the business to more than seven stores. What can you do that’s different?
Repeat Businesss – Keep Customers Coming Back
An optometrist asked his customers what frustrated them most about dealing with his firm. The general consensus was the hassle of having to visit the shop regularly to collect new contact lens. The optometrist also found that of 1500 contact lens patients, only 150 were generating repeat business. The rest were just going to the nearest source which meant approximately $90,000 a year in lost profits.
The solution was simple. The optometrist sent a newsletter explaining a new system where repeats would be delivered automatically. Even if only a quarter of the clients took up the offer, it adds $22,500 on the bottom line!
Play The Secret Shopper
A fast food owner with two outlets in Melbourne was finding business slow. He believed his staff were practising suggestion selling (“Would you like a Coke with that?”). But when his accountant posed four times as a customer buying pizza slices, only once was he invited to add something.
The owner, merely by re-training staff, increased sales within a fortnight by $1000 a week and profit by 15-20%. That meant $25,000 more profit a year and $75,000 more in business-sale value. Are you checking up on your business?
When was the last time you rang your business to see how your team answer the phone? When did you last have a secret shopper investigate the level of service your company is providing? Most people answer this question “never”. If that’s the case with you, you could be missing out on valuable opportunities.
Selling Without Sacrificing Price
The sales rep had been after the account for three years. And that in itself deserves a sale for sheer perseverance! Remember, the majority of salespeople give up after just two “no’s”. This guy was a stayer. In fact, he was the company’s top gun. But even he was having real trouble sealing this particular deal. The account was LARGE. Several million dollars worth, and the commission was, well let’s say, ‘worth having’.
Many other sales reps wouldn’t make that in a year. The rep had explained about the quality and reliability of his product and all the other good ‘stuff’ that takes the focus off price. And the customer (or should I say ‘would be’ customer) agreed.
The problem was the customer still said “Well Bill, I agree with you on all of that. I’d love to do business with you and no hard feelings but the trouble is, you’re just too high on the pricing.” Ever had that? If you’re in sales, and any business owner worth his salt should be, then I’ll bet you have. How would you like a surefire way to get around that? Here it is…
Bill maintained that they were as low as they could go and still make the deal profitable for his company. But then in a flash of inspiration, he turned to the customer and remarked, “You know, those are beautiful boots you’re wearing”. Well, the customer was surprised at first but then went on for a good few minutes explaining how the boots were not only good looking but practical as well.
He explained how they were worth every cent he paid for them. Bill then asked him, “They sure are nice, but tell me, why did you spend so much on them when you could have bought a pair for a fraction of the price at an army surplus store?”
The grin on the customer’s face spread as he walked around the desk, shook Bill heartily by the hand and said “The deal’s yours”. Now, that’s no ‘rep’, that’s a professional!
The moral of this tale is simple – relate things back to your prospect. Analogies make a point without saying the customer is wrong. Remember, doubt what you tell them but they prospects believe what they say. So don’t tell them anything you can ask them. So stop telling and start selling.
The Lifetime Value Of Customers
Try to avoid thinking of customers as a once only sale. Think in terms on lifetime value i.e. how many times they purchase each year times the number of years they’ll be a customer. When you do this and actively encourage customers to come back, you can do things to attract them, that stun your competitors.
A good example of this is that of a gymnasium that was starting in Melbourne. The owner knew all about the lifetime value of a client. He knew that if he could get people to come in a few times, these people would sign up for an annual membership worth $600. He could sign them up year after year. So instead of trying to sell memberships straight away, he gave everyone FREE membership for a month. He ran ads in the local paper telling people they could come in and use all the facilities at no charge for one month. People came by the thousands.
After a month he approached these people and sold his entire membership for the year in just a few weeks! The business has never looked back simply because he had the foresight to look forward.
How To INcrease Sales By 500% With A Question
Sales trainer, Fred Herman developed a phrase for the American oil company Amcol, that increased their sales by 500% in less than a week’s time. What would happen was, the service station attendant would come out, fill your tank with petrol, clean the windscreen, lift the bonnet and check your oil. He’d pull the dipstick out, wipe it off, put it back in again, pull it out, look at you and say: “You need four quarts of oil.”
Apparently they had people jumping out of the car, looking under the bonnet saying: “What do you mean four quarts of oil?”
The service station attendant would show them the dipstick and say “Well, look at how dirty that is. That’s chewing up your engine. You’d better get it out of there or you’re going to have problems. Five minutes, you’ll be on your way with tremendous peace of mind.”
If you asked that same person “Would you like an oil change?” they’d say “No thanks” or “Catch me next time.” So you see it’s so often the positioning of your approach that makes all the difference. Admittedly, this approach is a little more forceful, but it isn’t aggressive or confrontational in any way. If people say “No thanks”, you can cheerfully say “OK, well maybe next time you’re in.”
The point is they asked every customer who has dirty oil. Now not all their customers who needed an oil change opted for one, but enough of them did to increase the sales by 5 times. Why not develop a similar strategy in your business?
Service At Its Best
The best example I can think of great customer service is a classic from that most upper crust of companies Rolls Royce. It seemed that a wealthy Arab experienced problems with his Roller’s transmission.
He sent a telegram to the London dealer who had sold and shipped the vehicle to him. With no fanfare at all, a serviceman was flown out and fitted a new transmission to the car. Then he returned to London. After some time the owner had received no bill from the dealer and so sent another telegram inquiring why. Immediately he received a telegram in response that said:
Thank you for your wire. Stop. We are sorry but we have no record of a Rolls Royce transmission ever failing. Stop. But if it ever occurs we will replace it at no charge. Stop.