What Do Perks Do to Increase Your Business?
Spending money on perks may not be in your budget yet, but it should be. Perks are gifts given to customers to thank them for patronizing your business. There are two types of perks, the proactive and the reactive. I’m going to use Starbucks and Horseshoe Resort as my two personal examples, but I’m sure you will have many more.
These perks are incentives given as a bonus for purchasing now. Maybe you have received an additional upgrade, BOGO (buy one get one) at half price, or “buy today” incentive. These perks are usually open to anyone that is willing to purchase from you that day.
A few examples of companies that use these well are department stores and grocery stores. Both these types of companies have weekly specials and events to entice people to purchase today for additional savings. The benefit to them is, while in their store it is likely you will see and purchase more items than you came for.
What can you do in your business to entice people to buy today and maybe see and purchase more items then they came for?
These perks are aimed at previous clients. People they know have purchased in the past and they want to incentivize with options to continue to think of them first when purchasing in the future. The goal in your marketing this way is to stay top-of-mind with your clients. Go ahead and tier your perks to give more back to the people that give the most to your business.
I have two personal examples of places that have done this really well. I recently got a piece of gold plastic in the mail that made my day. In fact, when I showed others this card the ‘envy factor’ went way up and I felt even more special than I did when I received my Starbucks Gold card with my name on it. Check out this story about how the little things matter, on my blog.
The other event that happened recently was when I was looking for a venue to host my 2-day business workshop with my partner Lara Veltkamp. We had visited a few venues. Horseshoe Resort wanted our business and made it easier for us to experience their facility by giving us access to some of their offerings. By creating a relationship with us so we could feel what it was like to be a part of the day-to-day events and the atmosphere it made them the top runner for the location.
Additional Incentives – Issue reaction
The third place you should recognize that you may need to give an incentive to return and buy again is if your client had an issue with their purchase. You do not want many of these, but take a look at the lifetime value of your average client and decide if giving away something is a great investment in continuing the relationship. This cost comes out of your operations/customer support budget but may include some of the same perks you would give a great client.
How Do I Afford This?
To calculate what would be valuable to a client of yours you need to know how much your client is worth. Determine what an average client brings to your company in sales over the lifetime of your relationship with them. If you were to lose that client, it would cost your business their lifetime purchase value. Every client you lose, because you are not their first choice to return, is increasing your marketing budget.
Determine how much it costs to get a new client? Your time in particular is used up in so many channels of marketing just to reach the new customer. You can justify the cost of an incentive campaign by knowing what you spend, what you gain, and what you can save.
So, how much are you willing to pay into your marketing campaign to ensure that this client never leaves you.
If you do not have a marketing budget then you are not set to grow your business. Ask yourself, “do I want to get more clients, work less, and still make more money?” If you answered yes to this then you need to stop winging it and start planning your business.
Do you have more examples of some great perks you have received for being a valued client?
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