Reducing Fear and Uncertainty, Part 3

This week, I have been talking about the important marketing topic of decreasing consumer fear and uncertainty to increase sales. I conclude the series today with a discussion of introductory offers and giving away free service.

  1. Customers want to know approximately how much they should expect to spend in advance, without having to keep an anxious eye on the clock. This is often an issue for lawyers, CPAs and other highly compensated professionals who generally charge hourly rates. If this situation applies to your business, structure an introductory offer. For example, as an attorney with a billing rate of $250 per hour, you might offer to incorporate a new business, obtain all required permits and tax identification numbers and organize their corporate records for $499 including an initial consultation. If the project is completed within two hours, you earned your standard rate. If not, the introductory offer still works if you provide subsequent services using your regular fee schedule. You may also land full-price referrals because of your introductory offer.
  • As you complete assignments, you will likely find ways to reduce time and costs, lowering your breakeven point in the process.
  • The introductory price is independent of who performs the work. You can further reduce your costs if you can delegate portions of the assignment to your staff or outsource to lower-cost vendors.
  • For example, if you are a personal wealth manager, offer a free analysis of a prospect’s retirement investments. That is an important part of your main service. Your hope is obviously that some prospects will be so impressed with your knowledge and advice (or so unhappy with their current manager) that they will retain you to manage their portfolio. Other examples of providing a free service include a carpet cleaner who offers to clean one room free of charge, or an alarm company conducting a free home security analysis.
  • Jewelry stores illustrate an example of attracting customers with auxiliary services. They often provide free ring cleanings or replacement batteries for watches. With the highest gross profit margins in retail, very few prospects have to make additional full-price purchases in order to make the free service a successful strategy.
  1. My final suggestion under the topic of reducing fear and uncertainty to increase sales is an extension of the previous one. It is admittedly controversial. The idea is to provide free service in the hope of gaining new customers for full-price services. However, what you are giving away is neither the “2-cent sample” variety of the previous idea, nor the deluxe version of your service. It is somewhere in-between, probably closer to the former than the latter. Your free offering should be either a limited version of your primary service, or a less expensive auxiliary service.

I conclude the discussion of reducing fear and uncertainty to increase sales by reminding you of Monday’s quote by Mr. Ziglar. The next time you deal with an unhappy customer, take it as an opportunity to learn more about their needs while reducing their perception of risk. Remember also that helping them address their needs and concerns is critical to the ultimate success of every business.

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