I have learnt numerous ways to generate new customers from my business mentors, however, these methods are not all created equal.
Here in this blog article, I look to introduce you the fastest way to generate ultra high quality leads that are ready to buy your products and services.
This is the same method that helped New York Times best seller Brendon Burchard sell over a million dollars in products within 4 weeks.
It’s a technic that is so easy, you’ll be surprised on how simple the idea is.
Are you ready for it????
This technic is call Partnership Marketing.
Essentially, you market to compatible business’ customer database in exchange for some incentive.
Is that it?? Really?? That’s too simple….
Yes and no….the idea is simple, but there are a lot of implementation details that I rather not go into here because I hate typing. For my Rabbit Customer Newsletter subscribers, there will be a training video coming your way to illustrate this in more detail.
So in this short article, I’m going to focus on what incentive you can offer to your promotion partner so they become your number one salesman.
The most obvious incentive you can offer your promotion partner is of course cash… giving them a slice of the action(There are other incentives to offer and I will blog about that in a future article).
So how much money should you give?
I will answer that with another question.
How much is your customer worth to you? How much are you willing to pay to acquire new customers?
Let me give you an example, let’s say, your name is John Fitdude and your are a fitness instructor that run your own gym.
Your average member pay you $110 per month on average.
Looking at your database, you find that on average members stops paying their membership after about 15 months.
This tells you that on average, a member is worth $110 X 15 = $1650 to you in revenue.
You accountant Sarah worked out that your profit margin is about 37% after rent, wages, utility, capital depreciation …etc.
That means, each member will give you 37% X $1650 = $610.50 in profit.
What does that mean? It means, John, you can spend on average up to $610.50 to acquire new members for your gym and break even.
So members that you acquire at less than $610.50, you’ll make a profit.
$610.50 is your BREAK EVEN CUSTOMER ACQUISITION Value (BECAV)
Thinking of this as turning your business into a CASH VENDING machine….
If you put in $300 into acquiring a member, your gym, will give you $610.50 – $300 = $310.50 back in pure profit.
So how much money do you want? How many customers do you want?
For your business partner to promote your business to their database, you will need to give them enough money to worth your while, whilst maintaining enough profit so you can buy your Ferrari 360.
My advice is to start with giving 20% of your BECAV with your first partner, check the results, then try 30% and 10% with another partner with similar distribution list size (and demographic).
Every industry is different, some have no trouble finding promotion partners giving at 10%, but others need to go as high as 60% in order to get promotion partners.
So you’ll need to compare results generated to find your sweet spot where you’re getting sufficient partners to help market your business, but while still retaining maximum profit.
Keep in mind, in general, the business that is willing to spend the highest amount will dominate their market. As long as you are aware of what you BECAV is…you’ll continue to have a growing and profitable business.
Abundance to you and your family