How To Grow Your Business On A Shoestring
Budget
By Leslie Sprankling
There are three, and only three, ways to increase (grow) your business.
These are:
1. Get more customers;
2. Get your customers to buy more;
3. Get your customers to buy more often.
The tactics to cover all three ways would fill a 190 page book* so,
in this article, we�ll cover just one component of one of the three strategies,
getting your customers to buy more often.
OK! So you want me to prove that I know what I am talking about, hmm?
How can you encourage customers to buy more often? Big businesses do
it with loyalty programs. Airlines do have their frequent flier programs.
Credit Card companies have their Rewards programs. Many large oil companies,
department stores have loyalty programs.
But they all have one thing in common. They�re BIG!
But what if you�re a small or medium business. How can you afford to
set up and administer one of these loyalty programs? How can a corner deli,
a small hairdresser, a local hardware store, absorb all these costs? How
can you compete?
That�s a lot of questions. Let�s answer them for you.
Most small businesses, and probably you too, have said, I can�t compete
with these giants and their loyalty programs, they are just too costly
for my business.
One way is to co-operate with other, non-competing businesses, where
a number of you in a locality or mall, get together and share the costs
of the venture, thereby reducing the individual cost. That�s worth thinking
about. But that�s not what we�re here to help you with today.
Every business needs, and should have, a loyalty program. That�s a fact
of life.
And you can have one too� Today!
It won�t cost you an arm and a leg to set up, and it won�t cost the
other arm and leg to run. Nor will it take much of your time. It�s quick,
easy and you can have it today.
So Listen up!
Have you ever used a Subway® store for a quick snack or lunch? When
you pay for your meal they give you a stamp to stick on your little loyalty
card. When your card is full, you get a free sub. That�s a loyalty program
and it is easy and cheap to run. The cards and little stamps are cheap
to print. The fulfilment cost is of the free sub is minimal, yet the perceived
value is the price of the meal. �Yea, but,� you say, �they�re a big company.�
Yes they are, but they�re program is �el cheapo.� And it works!
Coffee shops offer a similar card, with a stamp or a �clipped� section.
After 8 to 10 paid coffees, you get one free. They get you to buy 8 or
10 coffees at full price and then they reward you with a free coffee. Again,
cards are cheap to print and the fulfilment cost is about 10% to 15% of
the price of the cup of coffee. Yet your perceived value is the full price
of the coffee.
A fresh chicken shop gives away a small cheaply printed card with a
purchase of chicken. The card says that if you purchase 4 lots of chicken
priced at $25 or more, they will give you $5 of chicken free. The card
is good for 12 visits so you can be expected to buy at least $300 worth
of fresh chicken and chicken products. For that you will get a perceived
value of a total $15 of fresh chicken which will cost the store about $7
or $8 to fulfil. That�s about 2.5%. Is that costly, or too much trouble.
Hardly!
An airport parking company offers a similar card, giving one free parking
after you pay to park 4 times. They use a small rubber stamp to mark the
card each time you park there. As the turnover of cars parked in the lot
is high, the actual cost to the company is virtually nil, yet your saving
is the perceived cost of a single time park at the lot.
All these are very cheap and easy to administer, loyalty programs. The
key is to have a small, cheap to print card (do it on your home computer
if you like), and the low cost of fulfilling the reward, such as a cup
of coffee that costs just a few cents, compared with the value the customer
perceives.
If you�re an accountant who charges $195 per hour to do work for your
clients, but you have 5 spare hours each week, where�s the cost to you
in offering a free 30 minute tax, investment or business consultation valued
at $97.50, for time that otherwise may be idle, yet can give you loyalty
from your clients or bring you in new ones?
Let�s face it, 10 cups of coffee at $2.00 each is $20.00, one free cup
may cost you 25 or 30 cents. Isn�t worth spending 30 cents to get $20,
and only have to spend it after you have got the $20 in your bank?
And it will bring in lots more repeat business.
So, put on your thinking cap, open your eyes and look around your business
and identify your most popular selling item, one that can be offered at
low cost to yourself. Then start your own loyalty program.
Do you have only one product or service? Great! The decision is already
made for you. Now you only have to decide how you will incorporate it into
your own loyalty program.
Here are some ideas: * A lawn mowing or garden maintenance service can
offer a free service for every 5 or 6 six paid services
* A hairdresser can offer a free treatment or product for every 5 or
6 paid treatments
* A dog wash service can offer every 5 wash free
* A liquor store can offer a free bottle of wine on every sixth visit
All these can be run with a small, cheap card that can be printed on
your home computer.
Another way to get your customers to buy more often is by starting a
loyalty club. This takes a bit more work, but the rewards to you can be
enormous
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