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Give it Away and Watch Your Revenue Soar!

Give it Away and Watch Your Revenue Soar!

March 22, 2008

WARNING: You may want to hide this advice from your marketer. Or, at the very least, you'll want to come up with a strategy for sharing this information because your marketer won't believe it. You may not even believe it, but it could be the most powerful tool you use to increase your sales.

Instead of trying to get your prospects to say 'yes' to your offer, get them to just say, 'maybe.'

Most offers are positioned to have a prospect either take action such as pay now, call or go to a website to make a purchase ' or not. And that's my point, it's an either/or proposition. Either the prospect says, 'yes,' or 'no.'

Why not get them to just say, 'maybe?' Trial offers, test drives or free samples are terrific examples of how you can get prospects to just say, 'maybe.' The prospects haven't said 'yes' or 'no.' They're simply agreeing to review your product or service before making a purchase decision. I can already hear your marketer now: 'But we'll just be bringing in people who want free stuff ... they'll never buy ... it'll increase our costs ... we have no way of tracking whether they bought later or not.'

Let me give you the kicker:
When prospects agree to try your products first, they are 64% more likely to continue with your service and say 'yes' to your next offer.

How you can double your traditional response rate
A typical direct marketing promotion yields anywhere between 1-3% in sales. Let's give our marketer the benefit of the doubt and say we had a 3% response rate on a 10,000 piece mailing. Three hundred prospects agreed to say, 'yes.' Now, if we asked prospects to just say, 'maybe' we can increase our response rate to 10%. Of the 1,000 responses if 64% said yes to our next offer, we would have 640 buyers ' more than twice as many if we just asked them to say, 'yes.'

The "just say maybe" offer is similar to what's often referred to as 'the puppy dog close.' It goes something like this. Your son sees a cute puppy in the pet store window and when he goes inside to pet the puppy, the store owner suggests you take him home for a few days 'just to try it out.' Before long, you're a dog owner.

The 'puppy dog close' and getting prospects to just say, 'maybe' both involve the Law of Reciprocity that says: When I give you something, you must give me something in return.

Remember the Hari Krishnas who used to pass out flowers in airports? They didn't ask you whether you wanted the flower. They simply said, 'here' as they handed you a tulip wrapped in plastic. More than 90% of the people accepted the flower and when they did, 30-45% of the people felt compelled to give a donation even though they didn't support the cause. They felt an obligation!

5 easy steps to convert your leads into buyers!
The Law of Reciprocity is a powerful technique to convert your leads into buyers. Here is a 5-step process to help put it to work in your business.

Step 1: Start by offering something for free that your prospects will find valuable. This could be a free report ,a free mini-course, a free seminar or a short trial to give your prospects a taste of what you can offer them. Remember: It has to be valuable, but not so valuable that you can't afford to give it away either.

Step 2: Make your offer again while your prospects are getting their free sample. Remind your prospects that you're willing to give them something for free with the expectation that they will become a buyer. In your free seminar and free mini-course, promote your paid products. Don't be shy about it.

Step 3: Follow-up afterwards and not once or twice but five or six times. Most of your competitors will give up after only one or two attempts, but most buyers don't make their purchasing decision right away. Persistence pays off.

Step 4: Track your conversions. Here are the metrics you'll want to track:

  • Number of prospects who responded to your free offer.
  • Number of buyers.
  • Conversion rate = buyers / prospects
  • Which subsequent offers did the buyers respond to?
  • How long did it take or how many efforts did it take to convert a lead into a buyer?
  • Acquisition cost per buyer = total cost of efforts / number of buyers
  • Sales per buyer = total revenue / number of buyers
  • Net profit per buyer = (revenue ' cost) / number of buyers

 

Step 5: Evaluate your metrics and see if there are ways you can reduce your costs and increase your conversion rate. If a particular effort is responding well, move it up in the series and test it. Set it up as an A/B split so half your prospects get the series you had been sending and the other half get the series with the stronger effort positioned earlier. The most important thing here is to evaluate your metrics and test new approaches that will increase your response ' and of course, your net profit.