Small Business Makeovers

“If they don’t try you the first time, then they’ll never try you the second time and they’ll never try you the first time if you don’t give them an irresistible reason to!”

- T. Harv Eker, NY Times Best-selling Author of “Secrets of the Millionaire Mind”

Harv tells a story about an ice cream retail store that was located in a low-visibility location in a strip mall. Business was slow and the owner was on the brink of closing the shop. She had tried all the usual marketing ideas and nothing seemed to work.  The problem was that nobody knew the store was there.

Case Study – Cones ‘R Us

Then Harv explained the concept of the irresistible offer: offer something at a ridiculous price or for free to get people to try you for the first time. So they put up “bandit” signs and posters all over the area that read:

FREE ICE CREAM CONES
Saturday June 12
Cones ‘R Us – 3345 Main St. Plaza

What do you think happened? The little store was swamped with people all day long. There was a line-up out the door of people wanting free ice-cream cones.

Now Cones ‘R Us was on the map. People had tried them the first time. Now the job was to get them to come back. This was accomplished by giving everyone who got a free cone a coupon for a $1 discount on their next purchase of $5 or more. The cost of the ice cream that they gave away was nothing compared to the profits that they made on the repeat sales to all those grateful and enthusiastic customers. Do you think people told other people about the free ice cream? You betcha.

That ice cream store was later sold for a tidy profit, all thanks to the irresistible offer.

Create Your Irresistible Offer

Okay, so maybe your product costs more than ice cream and giving it away would be nuts. I get that. But can you give away a taste, a sample, a trial, some advice, a consultation, an inspection, a seminar, a free report, free video or free CD.

Remember to tell people why you are giving it away from free. The best reason is because you want them to try you out. Other reasons might include that you are so passionate about what you do that you want to help as many people as possible. I’ll talk more about what to ask for in return the next tip.

In many small businesses, referrals or word of mouth advertising is the main source of new clients. This is especially true if you provide a product or service that requires skill or special expertise.

We all prefer to do business with people we know, like and trust and we tend to look to others for recommendations when we are looking for a trusted service provider. In my experience, clients will tell others about you if you deliver great service. And I’ve also discovered that some clients will go out of their way to tell others about your business if you give them an incentive to do so.

Here are just a few businesses that can benefit from a formal referral program:

• Financial Advisor, Mortgage Broker, Realtor, Home Inspector or Insurance Agent
• Health professional: Dentist, Chiropractor, Massage Therapist, Naturopath
• Personal service provider: Esthetician, Hair Stylist, Wedding Planner or Photographer
• Business supplier: Web Designer, Graphic Designer, Lawyer or Accountant
• Home service provider: Plumber, Builder, Electrician, Painter, Flooring Supplier
• Children’s Services: Camp, Lessons, Private School, Tutor, Day Care

Case Study

The rack card on the right was designed to let clients know about the rewards program. For all new referrals, clients receive a choice of two rewards – 1) a night at the movies for two, OR 2) a $50 gift certificate at a nearby spa.

“Now wait a second,” I hear you saying. “That’s going to cost me a lot of money.”

You’re right. It is. And yet it really isn’t. The only marketing dollars you have to spend are to promote the program and you can do this through low cost no cost ways like posters, bill inserts, email, point of purchase hand-outs or rack cards. The back of your business card is another great place to promote your referral program.

Unlike paid advertising, a referral program doesn’t cost you anything until you get a new client! It’s like having your clients as commissioned sales people. The revenue that one new patient will bring will be hundreds or even thousands of dollars. So the cost of promoting the program and giving the rewards is easily justified.

Another benefit is that people will talk about you. I remember when we bought a new horse trailer and told a friend about the great service we received. They soon bought a horse trailer of their own and the dealer sent us a $50 dinner certificate as a thank you. We must have told dozen more “horse” friends about the reward we received and about our trailer. The word of mouth advertising that the dealer got for that $50 was priceless.

What Kind of Rewards Should You Use?

There are many ways to set up a referral program and I’ll cover them all in my “Low Cost No Cost Marketing” Business School video training course for small business owners. Here is just one creative reward idea:

• Partner with one of your clients or suppliers in a joint venture. They provide the reward for free to you (or at a discount) and they benefit by receiving new clients from you. For example, a Chiropractor might partner with a local restaurant. When a referral is made, the person making the referral receives a gift certificate to the restaurant.

An added spin to this is to offer the same reward to the new client as a welcome gift. So now both the referrer and the referral receive rewards. That means you’ll have to clients raving about you!

How Often Should You Reward?

Reward for referrals every time – don’t make your clients reach 3 or 5 or 10 referrals before they receive a reward. People like recognition every time, even if it’s small. By all means, when someone reaches 5 referrals, give them a special bonus.

Referral programs are a great way for you to get creative. Find out what rewards would interest your clients and make them fun and exciting. And remember to tell your other clients about your top referrers in your newsletter so that the buzz spreads.

If you do business locally then regular face-to-face networking with your ideal clients and with those people who are connected to your ideal clients is a must. My personal practice is to attend one networking event per week.

Some formal networking groups such as Business Networking International (BNI) or the Chamber of Commerce require an annual membership fee and on top of that you pay $10 or so per meeting. Others are free to join.

Which Groups to Attend

Depending on your target market, certain networking groups are going to be more suitable (and profitable) than others. For example, my ideal clients are small business owners and self-employed men and women aged 35 to 60 with annual revenues of $50K to $1M who are looking for cost-effective ways to grow their business.

I have discovered that I can connect with my ideal clients at BNI, my local Chamber of Commerce, Roaring Women, local Entrepreneur groups listed on Meetup.com and industry association groups.

Attending BNI as a guest is free and is a great way to see if there is a fit with your business.

Meetup.com is a great free service that has hundreds of niche groups that you can join in your area (right). You can also start a Meetup group of your own.

According to a 2005 Harris Interactive Survey only 20% of respondents feel very passionate about their jobs, while 33% believe they have reached a dead end in their career and 21% are eager to change careers.

Based on research, there are a number of benefits to be gained from increasing employee engagement. The correlation between passionate, engaged employees, happy customers and profitability is strong.
Passionate, engaged employees have been shown to have a strong, positive effect on customer engagement. The research has shown that engaged employees grow in their ability to positively affect customers.
Overall, most companies have three kinds of employees :

1. Passionate and engaged – Employees work with passion and feel a profound connection to their company. They drive innovation and move the company forward and creates at least $32,000 per year in additional revenue for the company.
2. Not engaged – Employees are essentially “checked out.” They are primarily at work for the pay cheque and they only do what they have to in order to get by.
3. Actively disengaged – Employees who aren’t just unhappy at work; they are actively acting out their unhappiness. Every day these workers undermine what they’re engaged workers accomplish. Disengaged employees cost their companies about $16,000 per year.

In average companies, the ratio of engaged to actively disengaged employees is 1.5:1. In world-class companies, the ratio is 8:1. Our intent is to help our clients get to at least the 8:1 level.

What Can be Done?

Using an innovative model called “The Passion Test for Business” can help management to:

• Clarify the company’s unique value proposition that your clients pay you for.
• Identify the things that matter most for the company to deliver that value. We call these the company’s passions. This is about what you do to deliver your unique value to clients and customers.
• Help employees identify their own top five work-related passions. These are things that matter most to them in their life at work. We also help employees identify their core passions, which means “why” they consider their top five work passions to be so important to them.

The idea is that when you match employees’ passions with job roles that reflect the company’s need to deliver it’s unique value to it’s clients, you create the opportunity for employees to be fully engaged in delivering that value.

Workplace Application

For successful talent management and succession planning, including meaning and passion in the formula for long-term success is the basis for identifying and culturing tomorrow’s leaders. Passionate employees are more engaged. If employers can identify the core passions of their people then jobs and career paths can be planned that align the individual’s core passions with the needs of the organization.

Are you looking for ways to improve your organization’s performance? Leading edge companies now realize that employee engagement can be a huge competitive advantage. Contact Geoff Affleck to schedule an assessment of your organization and see if you can benefit from this innovative approach.