Giving It Away For Free Can Make You A Bundle

Just held a GREAT conference call for MYM Insider Members on the topic of "PRE-Customer Service." The idea here is simple: What can you do FOR your prospective customers that is valuable to them that allows them to experience your company and make deposits into their emotional bank accounts BEFORE they ever give you a nickel?

To implement this, you've got to have the right mindset--otherwise, you simply won't do it. You'll think it's too expensive, too hard, cheapens your product/service, or some other lame excuse. Instead, as you consider ways to "GIVE IT AWAY FOR FREE" to your prospects, carefully consider the following:

1. Understand the Lifetime Value of your customers: You’ll almost always have more $$ to spend than you think. Too often we only consider "how much will it cost right now?" While cash flow is important (very!), future revenue streams are too!
2. Understand the concept of Reciprocity, and how STRONG it is. When you give something to prospects for free, the very underpinning of societal decorum is at stake. They MUST give back. It’s in the dad-gum DNA… and it comes back in the form of buying stuff from you! If you don't believe me, test any of these ideas in a small scale setting and watch what happens.
3. Understand the value of List Building and nurturing. You should be psycho about building your list and nurturing it with frequent, valuable touches. What better way to build your list than with giving people something for free (targeted somebodies, that is)? What better way to nurture your list than by giving them something?
4. Understand the concept of Allocating Freebie Costs As MARKETING EXPENDITURES. I don’t get how some people can shell out huge dollars for a freaking ad or website, but then balk when it comes to giving somebody something for free. The end goal is the same—to get a new customer! If your marketing budget is $10,000 for a month, try allocating $2,000 of it to free stuff for a month or two. Then sit back and watch which part of your budget is paying the biggest dividends.

That being said, there are 8 ½ strategies for implementing PRE-Customer Services (PCS for short)… I went over all of them in detail on the call, and gave no less than 5 examples for each. Sorry, but I ain’t got that much time on this blog. So on to the highlights!

• CARVE IT OUT: Carve out some time from your regular schedule to do service for free to prospective customers. A pool repair company said he’d love to sneak into people’s back yards and put his sticker on their equipment so that when it breaks they see the sticker an call him. Too bad about trespassing laws. Why not simply knock on somebody’s door, tell them you want to do a $99 maintenance service for free (cause you’re in the area anyway) and get the goodwill, email address, and Twitter following (if possible) of that prospect. Review the list of 4 things at the top. And make sure you REALLY deliver a $99 value service--don't just "say" it's worth that much. Haircut stores could offer free neck shaving and sideburns trimming to anyone who comes in at certain hours… or could just dedicate somebody to it. Beats the heck out of buying ads in the valpak. Auto dealers could keep their service departments humming by offering free oil changes. Landscapers could landscape part of somebody's yard. Sure, some people will take advantage, and in marketing, its ALWAYS a numbers game. But you got to play the game to take advantage of the numbers game!

• BRING IT TO ‘EM: Cousin to the above strategy: For something that people have to normally go out to get, bring it TO them. Why on earth could a dentist NOT get an RV, convert it into a cool mobile dental studio, and go around town giving free checkups? Again, knock on the door and say “Hey Mr. Johnson, I know that most people hate to go to the dentist, so we’ve brought it to you.” Lifetime value of dental patients is tremendous. Dentists will easily pay $100 for a new patient, $200, no sweat. So you get this RV, graphics it up, pay a hygienist and driver, and you’re in it for $10,000 a month. 100 new patients later and you’re making money hand over fist. Run the numbers—you give 500 free exams in a month (20 per day) and convert 20% immediately into customers, and another 30% into customers later (See #3 above) and you are a billionaire dentist before long. Of course, you’d have to ACTUALLY DO IT!!!! Other examples of bringing it to em: local car wash does hand washing in your neighborhood for free to get you hooked; a donut shop delivers 2 dozen free donuts to 5 businesses a day, 5 days a week (remember, just allocate the dollars to marketing); A flower shop does the exact same thing (except with flowers, not donuts!); A store that makes prepared meals stores knocks on your door at 5:45 and asks if you have anything planned for dinner (and of course you don't) and asks if you'd like to try their stuff. This ain't rocket science. Or instead, they could sit there in there little store all day thinking of new ways to run ads that nobody sees, cares about, or acts on. Either way.

• FREE MEANS FREE: Send vouchers for free products or service that have NO STRINGS ATTACHED. If you’re a box company chasing million-dollar-a-year accounts, why not send a huge (18” x 24”) gift card (I learned this from Costco) for $1,000 worth of emergency rush boxes, just so you can get your foot in the door? Send one every month, and let them save them up and spend $12k at a time with you after a year. One good account and you’re golden. Other uses: Printer repair company offers $1,000 (or less, or more, depending on their setup) of free service; A plastic surgeon offers free facials/face peels, A graphic designer offers to do an ad or brochure for free (or they can be one of 227 designers sitting around hoping somebody gives them money); A courier service stops by 5 offices next to the one they are delivering to and drops off (again) huge vouchers for 2 free deliveries (allocate the expense to marketing, remember!); A commercial roofer tells prospects that they'll fix their WORST LEAK for free--this is smart given the fact that over half of commercial buildings have UNFIXABLE leaks that they just learn to "deal with" over the years.

• Other Strategies: Send in the Dogs, Free Niceties, Free Consultations, Information Bearer, HOTLINE!, and Ongoing Consultation.

No time to detail the rest. Maybe next week!

10 Nuggets, No Fat

If you're not familiar, I hold at least 10 training conference calls a month... covering topics from strategic marketing to tactical marketing. I have a Power Strategy Call (where callers ask questions about any marketing topic) an Ad Clinic Call (where people submit ads for review) and and Innovation Hour Call (where I talk about how to make your business better).

And every month, we compile 10 of the best training moments into a CD and send it to our membership base. Here's this month's Top 10 for you to enjoy.

Fast Company Blows Chunks

My apologies for the headline. I know, gross. But the politically correct headline for this article, "Compensating For Laziness With Non-Essential Bells & Whistles" just didn't sound as interesting.

Let's just say that Fast Company Magazine has gotten lazy and tried to compensate for a crummy magazine by adding bunch of non-essential bells & whistles, to the point where I felt the need to blow chunks while reading it. Sorry, I did said it again.

What the gate attendant was calling "weather problems" left me stuck in the Seattle airport with an extra 90 minutes on my hand. I quickly exhausted reading the iPhone version of USA Today (with it’s teeny tiny articles) and my usual fix of ESPN.com. 40 minutes and two mini-power naps later, I was bored stiff, so ambled into the Hudson Bay emporium of overpriced candy, drinks, and magazines to consider my options. Speaking of blowing chunks, if I see Barrack or the First Lady on another magazine cover, it’s gonna be airport restaurant nachos, part deux.

Fast Company caught my attention—and not just because it has a girl on the cover with an 80’s caliber Sigourney Weaver woman afro, either. The moderately interesting headline promised to showcase the 100 most creative people in business. I took the bait and forked over $6.66 for the magazine and a bag of Skittles. The price turned out to be a harbinger of what was coming. I later dubbed this purchase the “Devil’s Rag & Bag Combo.” But I digress.

Before I systematically dismantle the magazine, let’s first review the reasons why a business person, such as myself, would want to read this kind of magazine in the first place: 1) To get some good ideas that I can use in my own business, 2) to read about interesting business people that are doing interesting things (ie, profiles of successful people or companies), 3) to learn about technology that is useful, interesting, or both, and 4) to read something that’s fun to read—lighthearted, funny, interesting, etc.

Strike one. Strike two. Strike three. Strike four.

The headline from the Letter from the Editor page set the absurd tone: “Think Randomly, Execute Strategically.” What the H-E-double-hockey-sticks is that supposed to mean? You would think that an editor of a magazine would know how to pen a one-page editorial so it would instantly grab the reader and make him want to devour the magazine. This waste of 400 words left me wondering if Robert Safian (Editor) needs to tap into his 100 creative people for new ideas for his magazine. It only served to apologize, ahead of time, for the trainwreck to follow.

In the Old Testament, God decided a “do-over” was necessary and ordered Noah to build an ark—on PAGE 10 of the book. Page 10 of a 1,000 page book! Similarly, I was ready for a do-over on my devil purchase when I got to Fast Company’s page 10. Note to Fast Company: Nobody gives a crap who your contributors are. Let them put a little bio of themselves on the page that they wrote. Dedicating prime real estate right here on page 10 only serves the ego of the four people profiled. Get to something interesting already!!!

Pages 11 through 20 featured 8 ½ pages of advertising, and 1 ½ pages of Feedback on previous articles. Tim McClure from Lisbon Falls, Maine tipped me off that something would be wrong with his gripey-yet-poignant submission: “I was at a loss for words when I read ’10 Ways To Jump-start the auto business.’ Nationalize health care! Four dollar gas! Put a cop on carbon! Fake bankruptcy! These ideas are ludicrous! The solution to our economic problems is to allow the free markets to work.” A theme is already emerging: FC wants to posture itself as the eco-friendly business rag, and is dedicated to pretending like a magazine has anything to do with helping the environment. A secondary objective appears to be kissing big technology companies’ butts.

So now I’m 20 pages in, and nary an interesting tidbit to be found. It gets worse. The next 10 pages feature 5 ads and 5 pages of some kind of calendar thingy that highlights events that are coming up in the month of June—and dedicates an entire paragraph to describe each event. Apparently somebody out there cares that Waste Expo is being held in Las Vegas on June 8, that the 10th is Ballpoint Pen Day, the 14th is the Special Libraries Association Conference, and the 18th has something to do with environmental friendly water (read it twice and still have no idea what they’re talking about or why it’s relevant). Other calendar-worthy items included the International Plastics Showcase, Wimbledon, Virgin Atlantic’s 25th anniversary, the SIFMA Technology Management Conference, and the International Whaling Commission Annual Meeting. Try to keep it down—the magazine AND the chunks. They got the “think randomly” part down at least.

Finally, on Page 31, they printed an actual story called “Through the Fire.” “Cisco, Corning, IBM, Intel, and Schwab have weathered worse economic storms. Five strategies to come out of this one even stronger.” Uh, oh. I go on to read that Intel was investing more than $7 billion upgrading its factories, and how Corning had stockpiled enough cash to absorb a $400 million loss and has avoided cutting its R&D budget. Dang, wish I had thought of that. If I had only thought to stockpile a billion dollars in cash, this last year would have been much easier. What kind of out-of-touch idiot is writing this junk? That’s their strategies? Likewise, Schwab, IBM, and Cisco all blah blah blahed to get through it. Fortunately, it was a really short article. Looks like FC should have thought to stockpile a billion dollars in cash so they could hire more interesting writers. Or a better editor. Or both.

The next feature was about a design firm. Boring. Next.

Then a one-page (short) article about a company called Twine, maybe the next big thing on the Internet. Not big enough to write an interesting article about though.

Page 42: Hey look—ergonomic chairs that are designed cool. Page 44: Some guy who’s trying to make wool cool again (yes, the fabric). My gosh. Page 48: London’s public transportation system might get buses made by Aston Martin. I’m thrilled.

Page 51 yielded the only interesting article in the entire magazine, compliments of the Chip and Dan Heath, authors of Made To Stick. The article builds a good case against using the employment interview as the most integral part of the hiring process. Useful, memorable, and relevant. I’d expect nothing less from the Heath brothers. Maybe FC should just hire them to write the entire freaking magazine.

If you’re as bored reading this review as I was reading the magazine, feel free to quit. I won’t blame you. But do at least skip to the bottom for the tombstone engraving.

Page 54 is a feature called “Green Business” that talks about an algae based airline fuel which might (or might not) be available in 6 to 10 years. We get it. People are looking for alternate fuels. When somebody actually has a workable solution, tell me about it. But seriously, I’m sick of hearing about the 910 different things that might be coming. So far no of them have come. I’m tired of hearing about them just so you can satisfy your craving to be seen as reporting the eco friendly business news. Reduce carbon dioxide emissions already by keeping your pie hole shut.

I quit halfway through reading the article about the lady who fell in love with her sales prospect and couldn’t bring herself to ask him for money. Sheer stupidity. I mean really, this was one of the worst business magazine articles I’ve ever read. I was embarrassed for the magazine.

Hey look—an ad for Fast Company on my iPhone. There are four sample articles shown on the screen, and you guessed it, two of them are eco-friendly articles. Now I can get composting dung on my phone, too!

Finally, the main article about the 100 most creative people in business. The introduction encourages us to quibble and complain about their choices. I’d rather quibble and complain about this idea for a magazine article in the first place. I really don’t care who they choose for their 100 most creative people—the head design guy from Apple got #1, Melinda Gates got #2, and the CEO for Netflix got #4. Great. My problem is the absolute lack of interesting, useful, and relevant information about what these 100 people actually did that should make me want to spend 30 seconds or 3 minutes of my life reading about them. Rich Ross from the Disney Channel expanded his brand to a worldwide entertainment empire and has plans to launch a channel for “tween” boys. What am I supposed to do with that information? How do I benefit from knowing that? JJ Abrams made some cool TV shows and movies. Fantastic. Tyra Banks has aired 100 shows. Okay.

This goes on for 53 grueling pages that I can flat guarantee nobody read. Worthless doesn’t begin to describe how bad this issue was. I’m sure the staff over at FC patted themselves on their green little backs for a job well done… never once stopping to consider that this issue—the creativity issue—was the least creative thing they’ve ever reported.

All I want is my $4.95 plus tax back (I already ate the Skittles… an excellent value, even at inflated airport prices). And money for new shoes that I’ll have to replace now that they’re covered with chunks.

So here’s the tombstone engraving for Fast Company: Because it was trendy to talk about going green, we talked about going green. A lot. Too much. Because design is an important part of business success, we decided to write about chairs. When it came to creativity, we tripped on our own shoelaces and fell face first into a cowpie.

Rough, but true—especially since Inc. has been on a tear for the last year with some of the most fascinating, relevant, and interesting articles of the last decade. Their interview with Jim Collins—priceless. Their profile of the guy who started PlentyOfFish.com—inspiring. Their article about Zappos—relevant.

So now for the marketing principle... Fast Company has fallen into a classic trap getting lazy and delivering a substandard (relative to their standards) product and compensated by trying to load up the product with attributes they THINK their target market will value... and accidentally butchered their main prodcut even worse in the process.

Sure business readers appreciate going green, technology issues, and interesting lists and rankings. But what we value most is relevant information that can help us grow our companies. Their own 2007 article about Johathan Goodwin (the guy that makes 100 MPG cars) was a great example of how good they used to be... and how far they've fallen. It featured an interesting guy who did interesting things and had an interesting adversary. That he happened to be a major part of the "green movement" was just fine. But it wasn't what made the article cook.

Their "Creative 100" list, on the other hand, was IMO a simple issue of laziness. People Magazine publishes their beautiful people list, Forbes has the richest list, and Inc. has their fastest growing company list. So the FC folks decided "let's kill half an issue putting together our own list... how about creative people!?" Problem is--the beautiful people are all famous and the point is to ogle and bicker about who should be where. Rich people are a ranking of wealth--there's no bickering, but plenty of ogling. Inc.'s list goes to extraordinary lengths to draw principles of growth out of the companies it features on it's list--they know we've never heard of these companies (and don't particularly care about them), but they know how to give us the info about these companies that's useful to us. FC just throws a list at us. Don't even get me started on the laziness factor of throwing a junior staffer on the "calendar" project just to kill 10 pages.

Do this: evaluate your business and its product or service offerings. Make sure that you're staying true to your core, excelling at whatever your core competency is, and not drowning that core in non-essential bells and whistles. Don't let the quality of your offering suffer due to staff cuts or decreased revenue. Your customers are too smart--they'll sniff you out and drop you like a hot rock.

It’s really a pretty simple formula.

Million Dollar Snuggie

By now everyone’s seen the incredibly stupid Snuggie; aka the blanket with sleeves. But did you know that using a pop-culture phenomenon as a part of your marketing program could make you millions of dollars? At least it can if you use a little imagination, like my friend David did.

I recently profiled David’s company, Bana Box, on one of my MYM Insider training calls on the topic of knock-down lists (KDL). The idea of the KDL works best for B2B companies, and is really pretty simple: identify a relatively small set of prospects that you’d really like to convert to customers, and start sending them stuff all the time. The more interesting the stuff, the better.

I first worked with David over 10 years ago and helped him implement this strategy into his company. Since then he’s taken the wheel and gotten pretty good at sending interesting stuff. He started off with normal stuff like pens, slinkys, and stress balls… and then he got creative and started sending prospects an entire box full of pencils, or the world’s largest Hershey’s bar—just to make sure he got noticed.

Then he upped the ante and started sending fun things like shocking cigarette lighters, remote controlled flatulence machines, and fake lottery tickets. He believes that if he can give somebody something that would help them be the center of attention, he’d get the indirect credit for making the recipient Mr. Popular. There are too many famous stories to recount here—like the customer in Mexico who thought he’d won $50,000 on a scratch-off card, and drove almost 1,000 miles to Lottery headquarters in Austin, TX only to discover the ticket was fake. Or the CEO who screamed like a girl in front of 10 board members when he found out the cigarette lighter David had brought him was designed to shock the snot out of him. According to David, the emotions of love and hate are actually very close together. His sales volume would suggest he’s right.

One night David was watching TV and saw the now-ubiquitous Snuggie commercial on TV. A blanket with arms, a backward bathrobe. So stupid, so weird, so absurd, so ridiculous—right in David’s wheelhouse. He called the number and asked if there was a discount for buying a THOUSAND of them. A few transfers later and he ended up talking to Captain Snuggie himself, who agreed to sell a thousand Snuggies for six bucks each.

David owns a box company, so creating a custom, branded box to send the Snuggies out in wasn’t a problem. He then had his sales people drop off the boxes to about 400 companies in the area that they wanted to get as customers. Here’s an approximation of what happened when Joe Purchasing Agent got the gift:

Joe opened the box and saw the Snuggie and thought “this has got to be the stupidest thing anyone has ever given me.” A few minutes later, Nancy Nosey from the next cubicle over wandered by, saw the Snuggie, and made a comment. Joe, decidedly unimpressed with his gift, asked Nancy if she wanted it, to which she eagerly affirmed she did. In possession of her newfound treasure, she excitedly IM’ed co-worker Jana Jealous… and Jana, naturally, immediately asked Joe why she gave it to Nancy instead of her. Minutes later, the Snuggie was out of the box being tried on by various Dilberts from around the office. A few days later, Joe is watching TV with his wife, and comments on the Snuggie commercial when they see it, and recounts the story of office excitement to his wife. She immediately scolds him for giving it away instead of bringing it home for her to use, and Joe wonders what the big deal is.

That’s a true story, by the way, acted out in various versions in 400 offices across the area in the days and weeks following the Bana Box Snuggie deliveries. Which makes the next part of their strategy THAT much more impressive and effective.
David had his salespeople call all the recipients on the phone with this specific script: “Hey Joe, my name’s Jordan—I’m the one who dropped off the Snuggie over there last week. I was just calling to let you know that I’ll be in the area on Thursday, and I have some extra Snuggies—how many would you like for me to drop off for you?”

No request for an appointment. No attempt to sell a box. Just a simple question of how many Snuggies they could bring by. The average answer was FIVE—with many of the recipients requesting as many as TEN additional Snuggies.

The Snuggies cost $6,000 total, and the boxes to deliver them in cost a little bit extra. Not a bad investment, it turns out—since the companies they gave them to placed orders in excess of $2 million over the next 2 ½ months. Remember, these were all new customers that they had been trying to get… not orders from existing customers.

So let’s identify the principles:

Knock-down list: actively trying to convert high-potential customers by sending them periodic gifts.
The Snuggie: A pop-culture sensation. Definitely has an “expiration date,” but when used at the appropriate time, had tremendous interrupt value.
The follow up: non-intrusive, non-threatening. Capitalizing on the series of events they knew had occurred since the initial delivery.

Anyone who reads this and attempts to buy a truckload of Snuggies has missed the point by a country mile. This isn’t about Snuggies; it’s about being imaginative and finding something to send that’s fun, timely, and interesting. It’s about winning at marketing by having a brain that constantly engaged—looking for the next thing that will make a difference, that will get noticed, and that will break through the sea of clutter.

It’s your move. What’s YOUR idea?

You Suck, Now Admit It!

Want to endear your customers and prospects to you? Try messing up once in a while.

Yesterday we sent out an important email for a client to about 1700 prospects. The email, despite being proofread by about 900 people (okay, 2 people!) contained a minor but significant typo. Minor meaning it was only one letter off; significant meaning it drastically changed the meaning of the sentence. When the typo email started hitting inboxes, they heard about it immediately from a small handful of recipients.

The client was ticked off--and rightfully so. Always a calm head, I suggested that we send a short follow up email acknowledging the mistake and apologizing. I explained to the client that admitting fault and showing a little human frailty can actually endear customers to you. In fact, some companies I know have intentionally messed stuff up so they can apologize and reap the benefits (not that I recommend it... but it is possible; Internet printing giant VistaPrint.com is famous for this tactic... or infamous I should say; they started looking really stupid on about the fourth time they pulled it.)

I've even used this tactic in my own marketing before--I got to thinking about it and combed my archives and found this little gem all the way back from 1996:

We Screwed Up!

We received several calls from people who requested our FREE Audio Cassette.... saying that the tape that they received had a terrible tape hiss that made it extremely annoying to listen to. Well, we spot checked the entire batch of 1,000 tapes, and best we can tell, the entire bunch has been infected with this “HISS.” We checked with the duplication company, and apparently they had the settings wrong when they duplicated the master.

Our Mistake Is Your Opportunity.... Get A FREE Video Just For Asking.

The next seminar is scheduled for December 12th... and I know that several of you are interested in coming, but would like to preview the seminar before you decide. So what I’ve done is arranged to have a video that we recently shot duplicated and sent out to you as soon as possible. The video is a 45 minute overview of the Monopolize Your Marketplace System that was professionally recorded at the Studios in Las Colinas.

We got a huge response from that letter--far more than usual, if i remember correctly. I wouldn't be surprised, because guess what happened yesterday with my client when we sent the follow up email? That's right--far more response to the mess up mail than expected, almost all of it very positive and supportive.

Here's the principle: People want to do business with people they like and trust. Real people. Just like themselves. Don't be afraid to admit when you mess up. Don't hesitate to show some of your weaknesses. Don't worry that people will think you suck just because you admit fault. It's very disarming. Read this ad and watch me take this principle to the extreme.

So go ahead--SUCK!

They Both Still Suck (At Marketing)

More of the same tonight in the debate... what we need is a candidate who's willing to break the PC protocol and get a little p'oed. If I hear McCain call us his "friends" one more time, or if I hear Obama call nuclear weapons a "game changer" again, I think I might toss cookies.