Here’s an idea:
Next time you run a promotion, use gift cards. Instead of doing the usual “Buy one get one free…” or “50% off…” just give away $20 (or even $5) gift cards or coupons. Technically, it’s the same thing. But a subtle difference in perception makes it work way better for you economically.
When you have an offer that says, “buy one get one free…” What you’re really saying is…
“I’m hedging my bet and only giving away something after somebody has already bought one. Because I don’t like to be taken advantage of.” It feels like a win to you because you bring at least SOME money in. But your prospect “wins” nothing.
On the other hand, when you give somebody a $20 gift card you’re giving them something of value. A tangible thing. Your prospects can win whether they buy something from you or not. And people appreciate that. But here’s what’s interesting…
Whenever I mention gift cards to business owners (restaurant owners especially)… they’re terrified. In their mind, it’s like printing $20 bills! “What if everybody brings the coupon in?! We’re not going to make any profit,” they say. But imagine for a second… what if everybody with the gift card DOES come in?
How great would that be?
When you do the math of it, there’s no chance of losing. Because here’s the thing: Every business can access its assets (goods and services) for free or at a wholesale cost. If you run a restaurant, for example, your best asset is your own food at a discount. The cost is only about a third or 25% of the total price you charge.
When somebody comes to your restaurant and uses their $20 gift card to purchase, say, a bottle of wine… At worst, you “lose” about $7. ( Or whatever the wholesale price you paid for that bottle.) But nobody comes to a restaurant just to drink wine. People order food, coffee, and dessert… they bring groups of friends… On average, they spend way more than the actual cost of that gift card.
And when you create an amazing experience for them… you get yourself a regular customer for years to come. Their lifetime value now becomes 10x, 20x… or even 40x the cost of the gift card you gave away initially. The whole purpose of a business is to get and keep customers. To get and keep those long-term relationships.
And one of the most valuable things you can do is… to look at all your unused assets… and think of ways to deploy them to start a relationship with a new client. Or, if it’s easier… just come up with an excuse to start giving away gift cards tomorrow. 😉
And don’t forget to report back all the profits you make!