Make Deposits with your Customers' Bank Accounts

Your intention is to run a profitable business, so it makes sense that each transaction you have with customers should be profitable, right? Well maybe, but here's where many businesses go wrong. If you think about the profitability of each transaction, the tendency is to scrimp on value while extracting a maximum price from the customer. But does that make them want to return? Are they going to be blown away with the quality and/or customer service? Do they feel compelled to tell their friends how impressed they are with your business? And most importantly, does it maximise the lifetime value of this customer? No, no, no, and NO!

It's about the Lifetime Value of the Customer

In almost all businesses, customers should be seen as an investment. Yes, they're the source of your income, but if you view your potential income over the next year (or even 5 years), then you'll easily see why you should forget about maximising the return on each transaction.

These types of surprise gifts are often more powerful than incentives as they show genuine care, and encourage the customer to feel favourably towards you and your business. Remember, the lifetime value of your customers comes from;

• the average size of their order
• the number of times per year they purchase from you
• the number (and quality) of the people they refer to you
• the length of time they remain loyal to you
  

But how? (Go out of your way to be nice)

Instead, do something your competition is too scared to do. According to returncustomer.com, you should surprise your customers and make their day with something:

• Free – it isn’t a surprise if you have to pay extra for it
• Unexpected – surprises come out the blue without warning and without high expectations (they are not an incentive for doing something, they're a thank-you)
• Exclusive – is your surprise a special gift for the customer that non-customers can’t get?
• Relevant – your surprise should be a good match, companion, or accessory to the main purchase.

Go out of your way to find a reason to give your customer something extra. How about;

• You are the nicest customer I've had today, please take this as a token of my appreciation.
• I love helping parents/students/pensioners - here's a small gift.
• Hey, you're the 50th customer of the week.
• Thank you for being the first/last customer of the day.
• Because it's your first time here, please take this to remind you to come back.
• I know it's your birthday this week - please have this on us.
• Thank you for trying us out, it means a lot to us.

But what can you give away? Something that means something to your customer - enough to make them remember you - without sending you broke. Some examples of surprise rewards could be;

• Free shipping, delivery, gift wrapping etc
• Vouchers for return visits to reward loyalty - e.g. 20% off on your next visit
• Vouchers to give to a friend - invite a friend for free
• Secret sales - for members/email subscribers only
• Privileged information - for customers only (eg industry insights, fashion tips, secret recipes)
• Thank you notes/calls/emails - done soon after the purchase, perhaps checking up to make sure everything is O.K
  
• Christmas & birthday cards/small gifts (eg flowers, chocolates, movie tickets, book vouchers, bottle of wine, nice pen, dinner voucher, etc)
• Surprise gifts tailored to individual customers. Watch this for an extreme example, but if you've got high-value customers, you probably should tailor some gifts specifically for them. It's not that hard to pick up on their hobbies and passions and find a gift that is relevant and hand-picked for them.

Harness the Power of Reciprocity

Social psychology tells us that it's human nature to respond to a positive action with another positive action. So make sure you leave your customers thinking that they owe you something - because you've gone out of your way or given then something extra. If you consistently give more than is expected, you'll be amazed at how customers will respond.

Go on, make an unconditional deposit with a few of your customers today.

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How to use Special Offers Effectively

Win New Customers without Sabotaging Profitability

There's no question about it, special offers and discounts can be a great way to win new customers, boost short-term revenues, move stock, fill excess capacity, and achieve other business goals. But how do you use them effectively to get the best results?

Don't be Half-Hearted!

Firstly, if you're going to use an offer, make it an attractive! Not many people are going to change their buying habits for a 5 or even 10% discount. If you're looking for offers to really drive more new customers, you need to think of the discount you're giving away as the cost of acquiring a new customer. Yes, in the shoft-term your margins might take a hit, but think of the discount as part of your marketing investment. If your customers generally go on to generate a lot of repeat business, then you can probably afford to be very generous with your new customer offers.

Choose Your Audience Carefully

Secondly, you need to think where you're going to promote the offer. If it's only promoted to people that have signed up to receive offers (eg Groupon/Scoopon/Spreets), you want to tread carefully. This market is looking for the latest deal and is likely to continue that behaviour. It would probably take a pretty sensational experience to persuade them to become a loyal customer (they're likely to continue shopping around for a better deal elsewhere). If you can present your offer to people that fall more naturally into your target market (but still need a little encouragement to give you a try), then you're likely to be much more successful.

Be Smart when you Craft your Offer

Thirdly, try different ways of packaging up your offer. The same effective discount could be presented as...

• 25% off!
• Save $50 (when you spend more than $200)!
• 2nd person dines for HALF Price!
  
• Kids eat for FREE
  
• 2 courses + a bottle of wine to share for only $99!
  
• Dine with us and see a movie for FREE

What sounds more effective to you? They might each cost you the same, but they'll sure to get a different level of response. You could also incentivise repeat business. For example, "start your weekly clean this week and get your 3rd week FREE", or "Get your Nails done today, and Get a Voucher for the next Manicure FREE".

The type of offer that works best will vary depending on your audience and your product/service, but often;

• Percentage Off is the least enticing (unless you're able to give away more than 30%)
• Dollars Off sounds more attractive (even if you need to put a minimum spend as part of the offer conditions)
• Something Free is even more enticing, so long as it's something customers actually value (free delivery, buy something - get something else free, buy 2 - get a 3rd free, etc - but please don't throw in a canvas bag!)
• Bundled offers can be exceptional (if done well) - the beauty industry often does this well with various "pamper packs", but why don't restaurants do this with the nearby cinema, or gyms provide a massage every 6 months, or computer services bundle in phone-support or virus protection?
• Give-Aways and Go-Into-the-Draw to Win can be good, but the give-away or prize needs to be spot on (and fairly large for a Draw-Prize)

Businesses on WOMOW.com.au can use Special Offers to effectively target people that value quality and good service (the ideal type of customer). The offers you include on your profile are emailed to the members that have elected to hear about the reviews and offers from business in (and servicing) their areas. These are an extremely effective way to get more exposure and win new customers. So make sure you're making use of it and changing your offer frequently to keep it fresh and test what works best.

Special Offers combined with positive customer reviews? Unbeatable!