Try an incentive.

 

Do you like eating and drinking? I do.

 

Do you like saving money? Me too. I’m so cheap sometimes I feel almost embarrassed.

 

Are you curious? Of course, or you wouldn’t be reading this.

 

So last Saturday, I went with a companion to The Cornucopia Cruise Lines. It sails along the Hudson River – with views of the New York City Skyline, Battery Park, East River, Brooklyn Bridge, South Street Seaport, and past Ellis Island to the Statue of Liberty. The deal: half price on the food.

 

The meal was excellent, and the boat was full. So, being curious, I asked the lady at the door how many people had come because of the offer.

“About half”, she said.

 

They surely didn’t lose money on us when we were paying nearly $80. You would have spent more, right?

 

Meanwhile, a girl I know works at a very good hamburger restaurant in Jersey City. Every day between 4.30 and 6.30 it’s almost empty; so she spends her time rolling paper napkins around knives and forks.

 

The manager, whom I also know, keeps saying they should run promotions – but they seem scared to.

 

It still astounds me how so few people realize two things:

 

1. Incentives pay if used wisely.

2. If you use them all the time you cheapen your brand.

 

Why do they pay? Because generally you get all the people you would have got – plus a few you wouldn’t have. I guess about 15% – 25%. And the extra ones convert into customers at much the same rate as the others.

 

Perhaps the wisest, and certainly the wittiest client I ever had was Roger Borsink, Vice President of Marriott International Hotels New York City division.

He said: “I have never seen a relevant incentive fail to pay for itself.”

 

If you’re not trying incentives, do.

 

If you are, test alternatives (it may make a huge difference).

 

So why do incentives work? There are three reasons.

 

They overcome the fear – of being sold something the prospect doesn’t need or can’t afford.

 

They overcome laziness.

 

They give an excuse for trying you.

 

For all these reasons they should be prominent.

 

Always describe your incentive, and say what it’s worth. If it costs nothing, it’s worth nothing. The more desirable it sounds, the more replies you’ll get. The more it’s worth, the more people want it.

 

If it’s a book (paper is so cheap!) on fitness, maybe – give it a title, say how many pages it has. If possible, sell it – thus setting a price.

 

Try more than one incentive. You can have one for replying, one for replying within 14 days, one for buying two or buying the luxury version, trying another product or service, or recommending a friend.

 

Try a few things people might lose – a threat if you like. It may work even better. In fact, studies suggest it does.

• They have to buy by a certain date, or on a certain day.
• There are only so many left.
• It’s a limited edition.
• It’s restricted to certain privileged customers.

People are cynical. They think the cost comes out of the product. Always say why you’re being so nice.

• As a reward for doing something.
• To encourage them to try.
• Because “we find it’s the cheapest way to get new customers”.
• Because it’s our centenary.

What makes a good incentive?

• The Golden Rule: add value, rather than cheapening the brand.
• A free Financial Planning booklet adds value; repeated discounts cheapen your brand.
• Discounts are better for acquiring customers or rewarding them.
• Use them sparingly.

I hope you found this interesting and helpful. Let me know anything that interests you – or that you disagree with.

 

Best,

 

Eric

 

PS Course I’m biased, but if this has struck a chord with you, I suspect you’ll find EricValdivieso.com more than helpful.