How to Double Your Profits - By Giving Your Product Away

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If I said to you that by giving away your product or service you could double your profits in under 30 days, would you think I was crazy?  If I also said that the technique you must use will get you new customers EASILY and will involve the CHEAPEST way to get all the new customers you need, would you think I was insane?  Well read on and prosper...

If you are in business how many times have you offered say a 20% discount or "3 for 1" deal and hardly got any new business?  You may have spent lots of hard earnt cash on a new advertising campaign or a new web site and got a few extra calls, but certainly not a FLOOD of new customers.  This is probably because you don't know the Lifetime Profit Value (LPV) of each of your customers.  The simplest way to work out the customer LPV is to multiply the average purchase profit per customer by the number of times they buy from you each year by the number of years you expect to have them as a customer.

For example, if a hairdresser makes an average profit of $20 each time a customer cuts their hair and this customer cuts their hair 9 times a year and they are a customer for about 7 years then every new customer is worth $1,260 to this business in terms of LPV.

Once you have figured out the LPV for your business you then appreciate the worth of every new client and can be more compelling in your promotions - that is, you need to start giving stuff away in order to buy new clients.  Why?  Because people are creatures of habit and you must give them a compelling reason to change those habits.  That is, of course, unless you have a monopoly and have a captive market.  Otherwise, you must earn people's trust by getting them to sample your product or service.  So long as you have a good product or offer good service or good value most of them will come back.

Most important of all, don't just rush out and give away anything to anyone.  Make sure you know your target market.  Make sure you try out a few offers on a limited test market to see which one works best for you.  Analyse the results and keep trying new things until your success rate dramatically improves.  Your new customers will keep coming back if you don't forget them after the first give-away and develop a relationship with them and show them you value their custom.  Be honest about why you are giving away something for free - e.g. "I'm so confident you will like our new menu and invite all of your friends that I'm happy to have you eat your next meal on me…"  Followup that first visit with a thank you note or a call - remember it may have cost a little bit over $20 in order to make $1,260 over the next 7 years.  What is a new customer worth to you?

When KFC advertised a free meal earlier this year they had so much demand that they were forced to modify their offer:

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Nino Selimaj has an upmarket New York restaurant which offered victims of Bernard Madoff's investment scheme a free meal - nothing on the menu was off limits.  Read about it here.

Also, here is an example of a free Bankruptcy consultation offer from a legal firm.  Do you think they may get a flood of new clients? Do you think many of these clients may become lifetime clients?

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Chris Pattas

Chris Pattas lives in beautiful Melbourne, Australia. He is happily married with two children. Chris is a successful business leader who enjoys helping organisations reach their full potential. Whether it is driving greater profit or sales, growing market share in competitive industries, inspiring executives to achieve great things, negotiating compelling business deals or working as a board member implementing exciting change programs, he knows how to get the most out of any organisation. Chris has worked in various product and service industries including: advertising, software, IT&T, travel & tourism, utilities and telecommunications. His interests and expertise include: leadership & strategy, sales & marketing, online & social media, science & technology, travel & tourism, photography and music.