In the last issue of the newsletter, we established that word of mouth (WOM) is the strongest tool in an entrepreneur’s toolbox. Today’s savvy consumers are driven to make a purchase after talking to family and friends—not as a direct result of clever ads and promotional campaigns. So how can you get people talking about your product or service among their networks? We’d like to show you how a few WVF clients in different industry sectors are using WOM to grow their businesses.
Stage an event to create buzz…Fashion and accessory retailer:
To stand out from among five other small women’s apparel shop in a busy mini-shopping mall, Maria decided to start a preferred customer program—with a twist. After identifying her top 60 customers—those who had spent $2,000 over the last 12 months—she invited them to her first early morning ‘outlet’ event in which they could buy out-of-season clothing at 60% off. To attend they would have to bring a friend—who could also shop at 60% off. In a friendly way, she clearly stated the offer: I love you but I love you more if you bring a friend. ‘Couples’ shop at 60% off; ‘singles’ at 50% off.
Twenty-three customers attended with 20 friends. By only including higher priced items in the sale (average $100), she was able to achieve as much income from these 43 customers as she would have during normal business hours where average sales were only $60. For the most part, this was additional revenue because she was open 1 ½ hours earlier than usual; and brought in 20 new customers to whom she will regularly advertise. Currently she is designing a loyalty program that offers awards for different
levels of purchase during the year—culminating in an invitation to another ‘outlet event’.
Do something that your customers will talk about to their friends…Interior decorating firm:
Joanne wanted to get her customers talking to their friends and family about her upscale interior decorating business. The reality was that very few of her clients returned for new services after their
initial decorating project. But she knew that anyone visiting her clients’ home and office would be wowed by what she’d done. So how to create buzz after the fact?
For each recent client she made a list consisting of two to three items that would update their look; or give it a seasonal uplift. She offered the items nearly at cost. There was only one thing she requested.
A referral to a friend who was in the market for a new look to their home or office. Along with ‘before’ and ‘after’ pictures of the original room, she sent her clients a picture of their newly updated rooms and asked that they send along to their friends. From ten clients she received two referrals—well worth her effort.
Show your customers how much you appreciate their business…Tax service firm: In early December, while Juanita was preparing to announce a 10% price increase in her services (having not raised prices in three years), she saw that a new business was due to open just down the block—another
tax office advertising a price list that was 20% cheaper than what she offered. Instead of publicly engaging in a price war, she called each of her clients (175) from the previous year with an offer: ‘Book an appointment in the next few weeks and I’ll not only keep you at last year’s prices but will lock you in for the next year as well.’ Deciding to further ‘appreciate’ her clients, she invited them to the firm’s first holiday party—to which they could bring a friend.
By the end of the tax season, she had retained 95% of her customers; and gained twelve new clients from among her party list. Currently she is training as a life insurance agent to bring in additional revenue during the off season; and offset the impact of moving her price increase to 2015. To stay top of mind with her clients during the off season, she recently created a newsletter that provides tax-saving tips; ways to fund a college education; and tips on saving for retirement.