In last week’s post I talked about recurring billing, and it’s powerful effect on generating continuous income. But I want to move away from that line of thinking today and focus on an even more powerful method to get repeat business from the same clients.
The simplest and most effective way to upsell customers is by establishing a relationship. When people make decisions, they usually do so after consulting friends and family. There are numerous psychological and evolutionary reasons that I don’t have the time to get into with this post, but let’s look at a few anecdotal examples. When people choose a college to apply to, it’s usually done with the input of family, intimate friends and a guidance counselor. When a woman at a bar is approached by a man, within a few minutes she’ll instinctively signal for her friend’s approval with her body language. If her friends don’t approve, they’ll give “the raised eyebrow look” or simply turn their back to the man and give him negative body language. Our need to ask for approval and consultation when making choices is done both consciously and subconsciously. The decisions we make are naturally biased to include the opinions of our peer group.
So if you really want to grow your business, if you want word-of-mouth buzz, increased conversions and customer loyalty, you need to work on developing more than just a customer/client relationship. To do so entails changing the way we think about our clients.
To change our relationship with our clients, we have to stop thinking about them as potential leads. Instead, we should think about how we can best benefit them without the need to get paid back. If the focus is on getting fair compensation for value that we give, then inherently the value of the transaction is degraded. If instead the focus is on giving as much to our clients as we can, they’ll then in turn value the relationship with us that much more.
They’re are numerous ways to give value to our clients, but the best way to do so is for FREE. What? Don’t people devalue things that are free? Not necessarily. If what we give away is of little value, for example a corporate sponsored water bottle at a marathon, then we associate little to no value with the transaction or the other party. If however, we give something meaningful, something above and beyond what people normally associate with “free”, then we’ll get a whole lot of customer loyalty. People will talk about how they got a “great deal” or know “this guy” that gives them special treatment.
Have you ever read Alice Schroeder’s “The Snowball: Warren Buffett and the Business of Life?” It’s a fantastic biography and I highly recommend it. There’s one passage in the book that I found quite salient to this topic. Every year, the little known investment bank (at least for non-financial people) Allen & Co. hosts a media conference at Sun Valley. The most highly regarded media and tech CEO’s, the Steve Jobs, Bill Gates, and Warren Buffetts of the world always attend. They might shun media conferences from bigger and more well known investment banks like J.P Morgan, but they almost always go to Allen & Co. The two main reasons they go is because a.) everybody who’s a bigwig goes and b.) the deeply personal relationship that Herb Allen’s, the CEO of Allen & Co., has built with them.
How can one guy build a relationship with the top industry leaders, including diehart competitors, across numerous sectors? Free surf n turf, babysitters and exclusive schwag like Allen & Co. Golf Polos. Most of that stuff costs Allen & Co. pennys. But the effect is powerful. The kids of the CEO’s always want to come back every year. And Warren Buffett, one of the richest men on earth, admitted that he relishes putting on the Allen & Co. polos.
So make a list of what you can give to your customers right now, that would cost them nothing to receive. Make it big. A couple of helpful hints on your blog, or a free newsletter is just the tip of the iceberg. Do you have a book, a video or some other form of content that you can give away for free? How about a sample version of something you’re selling? If your business is offline, make sure to include hand written thank you note. Sooner or later, you’ll repeat the rewards. It may not be in the form of direct income. It may be through word or mouth or new relationships which are often more valuable than money.
