I subscribe to several business and financial publications that I consider valuable tools in my life-long pursuit of safe and solid investments. While these magazines appeal to a select demographic of people who consider themselves business-savvy, I’m often amused by the relatively mundane and simplistic marketing methods they systematically employ to entice their readers into purchasing long-term subscriptions.
[gap height=”15″]
Here is an example of an actual offer from a leading financial publication: one-year subscription for $40; two-year subscription $80; three-year subscription $89.
[gap height=”15″]
Now, I ask you: “What clear-thinking person would purchase the two-year subscription?” (By the way, if you find yourself leaning toward Door No. 2, I have a time-share in the Poconos that I’d like to unload on you.)
[gap height=”15″]
Kidding aside; why were the subscription offers packaged in this way? Did someone in accounting make a mistake? Why would anyone purchase two years for $80, when for just $9 more, they could get another full year?
[gap height=”15″]
That’s exactly the point. This “no-brainer” offer was intentionally designed to steer you into purchasing the longer-term package. At the same time, it was presented in such a way as to make you feel “intelligent” about your purchasing decision.
[gap height=”15″]
Sure, you might consider purchasing the one-year deal just to test the waters. But that three-year deal is pretty hard to pass up – especially for a smart businessperson like you.
[gap height=”15″]
And regardless of which subscription plan you purchased, the magazine wins!
[gap height=”15″]
These are the types of “steering mechanisms” that you should consider incorporating into your business model. Structured effectively, they can help you increase sales of everything from tanning and spa packages, to lotions, accessories, flip-flops and teeth-whitening.
[gap height=”15″]
A new year is just around the corner – now is the time to prepare your business to maximize profit potential on every transaction.
[gap height=”15″]
Let’s begin preparing for the New Year by testing your knowledge of your business with two simple questions:
[gap height=”15″]
1. What is your best-selling lotion?
[gap height=”15″]
2. What is your best-selling tanning package?
[gap height=”15″]
The answer to both should be: “Whatever I WANT it to be!”
[gap height=”15″]
It really is that simple. You are in control of what happens every moment of every day in your business. And you should be taking full advantage of your “captive audience” by creating promotions that steer salon guests toward the products and packages that you WANT them to buy.
[gap height=”15″]
Recently, while teaching an in-salon sales training, I asked the owner if I could conduct a “sales experiment” on the next customer who walked through the door. I assured the owner that she would not lose money and that the customer would be thrilled with the offer.
[gap height=”15″]
I then selected a bottle of lotion that retailed for $75 and had an approximate cost to the salon of $25. I placed the bottle in plain sight: right next to the register. As the customer was checking in, I enthusiastically informed her that we were running an incredible special: “With the purchase of this bottle of lotion – you receive five free sessions in any tanning unit in the salon!”
[gap height=”15″]
“Any tanning unit?” the customer questioned with a slight air of suspicion in her voice, “including the level-5 unit?”
[gap height=”15″]
“Why, of course it includes level-5,” I replied, “and you can use one of your free sessions right now!”
[gap height=”15″]
When the salon owner regained consciousness, I handed her the customer’s $75 and explained the underlying details of the transaction.
[gap height=”15″]
The luxury-infused, level-5 tanning system had an operating cost of about $1.50 per session for lamp use and power consumption. At the same time, a five-session tanning package was priced at $75. The customer was quick to understand that she was basically getting the $75 bottle of lotion FREE.
[gap height=”15″]
After adding the cost of the lotion and the operating cost of the five level-5 sessions ($25 + $7.50 = $32.50) the salon owner reaped an adjusted gross profit of $42.50 on the transaction ($75 – $32.50)
[gap height=”15″]
When discussing the dynamics of the sale with the salon owner, she casually commented, “Well, anyone could have done that. Even my worst salesperson could sell a $75 bottle of lotion if you’re willing to give away $75 in free tanning sessions to close the sale!”
[gap height=”15″]
So shines a good deed in a weary world . . .
[gap height=”15″]
Upon further review of this customer’s year-to-date spending, we found that she had spent a total of $63 over the past nine months. So, in one transaction, we exceeded the customer’s spending for the entire year. And to accomplish this amazing feat what did we actually give away? We gave away TIME.
[gap height=”15″]
Furthermore, to exercise the full value of her discount, the customer must now patronize the business four more times. That’s four more selling opportunities and a huge boost to the salon’s new word-of-mouth advertising campaign.
[gap height=”15″]
Some might argue that the offer was too generous; however, based on my review of thousands of salons nationwide, I know that the typical salon tanner spends about $100-$150 per year on tanning. Accordingly, making a $75 sale that nets you $42.50 by giving away a smidgen of TIME is an effective and profitable trade any time you can make it.
[gap height=”15″]
Please understand that I am not suggesting you radically revamp your entire pricing structure. I’m simply demonstrating one way of persuasively steering your salon guest toward what you want them to buy.
[gap height=”15″]
Any bottle of lotion and any tanning package can become your bestseller. All you have to do is create effective promotions that incentivize your staff – and create a call-to-action for your customer.
[gap height=”15″]
Now, using an unbiased and open mind, please review your existing pricing and promotional structure by asking yourself:
[gap height=”15″]
1. Is your pricing model easy to understand – or does it require several minutes of explanation?
[gap height=”15″]
2. Is there a logical “value-added” path that leads people to the packages and products you want them to buy – or is it haphazard and random?
[gap height=”15″]
You possess the power and potential to make 2018 a great year. Grab the wheel and start steering sales your way!
[gap height=”15″]
If you have questions regarding this article, please email jerry@istmagazine.online
[gap height=”15″]
A new year is just around the corner – now is the time to prepare your business to maximize profit potential on every transaction.
