"How Free Giveaways Can Boost Your Spa and Pool Revenues"
By Simon Cope
Offering free giveaways to prospects and customer is a powerful business building strategy that can result in a flood of new and repeat spa and pool customers.
It may seem counter-intuitive to give away your products and services to build your business; however, people can't resist the lure of receiving something for free. The word free, as worn out as it may seem, is still the most powerful word in marketing and has a hypnotic effect on people.
Why Free Giveaways Work
The reason free giveaways work so well is two-fold. First, prospects that test your product or service risk-free will hopefully recognise its value and continue purchasing what you offer. Or even better, your prospect will get "hooked" on your product or service and won't be able to live without it.
Second, the fact that your product or service was given to your prospects as a free gift will compel them to return the favour by continuing to purchase from you. This principle is called the "Law of Reciprocity," which simply states that people naturally feel an obligation to return favours as a way of expressing their thanks.
The Law of Reciprocity works! For example, the Disabled American Veterans organisation reports that it's simple direct mail request for donations produced a response rate of 18%. But after they started giving away personalised mailing labels to potential donors their success rate nearly doubled to 35 percent. It worked like a charm.
Know Your Total Customer Value Before Giving Freebies
The key to safely offering free giveaways is to know your "total customer value." This is the amount of profit you will receive from your spa and pool customer over the total length of your relationship. This figure not only includes business that you will receive from your customer, but also any referrals you may receive from them.
For instance, suppose your average spa customer stays with you for five years and the average spa sale amount is $5,000. Now consider that your average annual chemical sales are $180 ($15/month), parts sales average around $60 a year, and your average customer purchases two spa covers at $160 over the life of their spa.
Hypothetically speaking, your total customer value over the length of your relationship could amount to over $6,520 in total revenue. But wait. What if your customer, whom you have served well, brought you two referrals? Now, your total customer value will leap from $6,520 to $19,560! Assuming you have a 30% gross margin, one customer could mean $5,868 to your business. Knowing this, how much would you invest to acquire one customer? $100? $200? $300?
The answer is "yes" to all of the above.
Why wouldn't you invest $100 to gain $5,868 in profits? Coincidentally, this is why most spa and pool business owners are nervous about offering free giveaways. They don't understand the principle of "total customer value."
Information – The Ultimate Free Giveaway
Ideally, it's best to offer free giveaways that are low cost but have a high perceived value to the person you are giving it to. Information is a great example of a free giveaway that has a low product cost and a high perceived value. This is why it's smart for small businesses to use special reports containing "insider" information as a free giveaway for new customer lead generation.
Your special report could be a written document, an audio cassette/CD, or a video/DVD containing subject material that your target market would be interested in. Videos/DVDs especially have a high perceived value.
There are hundreds of useful videos/DVDs that you can give away as a premium to lure customers to your store.
Giving away free informational videos/DVDs can turn a mediocre offer into a valuable and compelling offer.
Free Giveaway Case Studies
There are a myriad of ways to offer a free giveaway and many effective types of giveaways (other than information) that your spa and pool business can use to attract new and in-active customers. The following are a few ideas on how to give away products or services to build your business:
Idea # 1 – Free Pool Cleaning Services
Offer your pool cleaning services for several months completely free of charge. Once you are onsite, do a thorough pool structural and chemical inspection and present a written report of findings to the owner as your leave.
Idea # 2 – Free Chemicals
Make an offer to pool owners who are not your current customers to receive a free chemical package. When the customer comes in have them fill out a short questionnaire about their pool and chemical usage that you can use to market to them in the future.
Idea # 3 – Free Accessories
Build value by giving away a poplar pool accessory that is low cost to you but has a high perceived value such as a spa side table or a towel rack.
To attract new customers you must offer your free giveaways to prospects that haven't yet done business with you. Explore the possibility of exchanging a "free gift certificate" stand at businesses that sell complimentary products. You might even partner with a non-competing, but complimentary business and do a joint mailing to each others customer base.
Justify Any Deal That's "Too Good To Be True"
If your offer that includes free giveaways appears "too good to be true" to your prospect, it could decrease it's believability and your credibility. To avoid this you should always give the reason why you can offer such a great deal.
It might be that you goofed and are now overstocked, you got a great deal from your supplier, or you just want to say thank you in a meaningful way. Whatever the case may be, give a reason. It doesn't even have to be a good reason; it just needs to be believable.
Remember, your prospect is very skeptical and has good reason to be. We've all been duped at one point in time by a "too good to be true" scam. Furnishing your prospects with the reason why you can offer them such a good deal helps them to logically reconcile your offer in their minds. In turn, this will give your prospect the comfort level needed to act on your offer.
Using free giveaways is an effective spa and pool marketing strategy if used correctly. Think about what you can offer free-of-charge that your prospects would consider valuable and that you can give at a low cost to you. Don't forget to compute your total customer value so you know how much you are able to invest in attracting a new customer. Lastly, make sure your justify any offers that are just too good to be true.
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