How To Grow Your Business On A Shoestring Budget
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
© 2005, Leslie H Sprankling. All Rights Reserved. Leslie H Sprankling is an Australian Business and Marketing Consultant with 30+ years in business. Want more ways? It’s all been done for you in a 220+ page book, where you can get all the “Simple Secrets” to all three ways to grow your business on a shoestring budget at http://www.better-n-chocolate.com/simplesecrets. Plus many business and personal software programs & business publications to help you develop and grow your business that are not available anywhere else on the internet. Also, you can get many free business articles like this one, for your own use or for publication and distribution.
NOTE: This article may be freely used, published or distributed in ezines, newsletters or websites providing the articles remain unchanged in any way and this resource box is included intact. For more information or inquiries please contact Leslie at firstname.lastname@example.org.
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