As business owners, we sometimes don’t see ourselves within the bigger picture of our customer’s buying behavior.
We just see their interaction with us and market ourselves to acquire more and more customer interactions.
There’s nothing wrong with that of course.
But when we start to look at the bigger picture, we can start to uncover profits that were previously hidden.
It’s like finding a $50 bill in a jacket you haven’t worn in a while but on a much bigger and more profitable scale!
Who Has Your Clients Before You?
Your customer’s transaction with you is one of many they will make that day.
Before their transaction with you they did business with someone else and after you they’ll do business with someone else.
The transactions may or may not be related but one thing is for certain – someone had your customers before you did and in all likelihood they spent a good deal of money on sales and marketing to acquire that customer.
Finding other complimentary businesses that your customer deals with before they deal with you can help you uncover untapped profits in your business.
Setting up a joint venture (JV) arrangement with one or more of these businesses that is not in direct competition with you can be a cheap or free source of leads.
If you’re a lawyer, an accountant might make a great source of new leads. If you’re a car detailer, a mechanic could be your source of leads. If you’re a pet food retailer, a vet might be your ideal source of new customers.
While this may seem obvious, it’s rarely done and it is even more rarely done well.
Read on and I’ll share with you some strategies you can use immediately.
Give Away A Part Of The Profit From A Sale You Would Never Have Had
Setting up a JV arrangement can be tricky. The most obvious and direct route is to pay either a finders fee or a commission for incoming leads or sales.
However, some business owners may not feel comfortable about taking cash for leads they send you and in some industries this may not even be legal.
While it’s smart to pay for leads of known buyers who are “hot”, there are other less direct ways that work just as well or better.
One awesome strategy involves creating a gift card or voucher for your products or services. Let’s say for example you’re business is “Mike’s Pet World” – a pet food retailer.
You could create an arrangement with a local vet. Find out what kind of pet food this vet recommends to his clients, then create a voucher or gift card that he can give away to new clients.
The beauty of this is that it is good will all round, no sales pressure, no conflicts of interest. The vet would say something like, “I recommend XYZ dog food. You can buy it at most pet food retailers but you’re a good customer so here’s a $50 voucher which you can redeem at Mike’s Pet World who are down the road. They always carry plenty of stock of XYZ dog food”.
It’s a win-win for every party involved. The vet creates massive goodwill with the customer because he is essentially handing them $50. The customer receives an unexpected discount. You, as the owner of Mike’s Pet World, acquire a new customer who’s lifetime value is potentially huge in exchange for a voucher with a face value of $50 (and a wholesale cost which is much less). You also get transferred much of the goodwill the customer already has with their vet.
Now it’s true not all customers will redeem a gift card or voucher but the vast majority will. It feels too much like throwing out money to throw out a voucher or gift card that you know has a monetary value associated with it.
Let’s say that you conservatively calculate that the average lifetime value of a new customer at your pet store is $5,000.
You’ve given away a part of the profit from a sale you would have never have had. Genius!
Who Has Your Clients After You?
Flipping it back the other way, you should analyze who has your clients after you.
You’re sitting on a gold mine. The by-products of your business are valuable to someone else. Don’t let them go to waste.
After you’re done servicing your customer, there is very likely someone else in a complementary line of business that would be willing to pay handsomely for hot, qualified leads.
This can be a great secondary source of revenue while increasing the value of your offering to the end customer.
Offering or referring complimentary products and services can enable you to offer a more complete solution.
Your customers will thank you and so will your banker!