When attracting new users to your product or service, you need to ensure you are targeting the prospects that will form the 20% that will generate 80% of your profits. You need to ensure you avoid the 2 most common errors and temptations that most companies make when trying to attract new users.
All trial is not good trial.All people that try your product are are not going to be good prospects. Our natural instinct is to get as many people as possible to try our products. This is a mistake.
You need to approach getting trial of your product or service with a sniper’s mindset. Not with a shotgun.
In a previous article entitled “How To Ensure You Are the 1% of New Brands That Survive: Focus on Repeat!”, I argued that many marketers spend too much time focusing on getting “Trial” for their products, and not enough on ensuring they get “repeat” business. In this article, I discuss how to ensure the resources you are using to get trial will deliver the best return for your brand and business.
Recruiting people to try your product or service is usually the most costly marketing activity that any business has to invest in.
It is important to remember that recruiting users is only the beginning of a journey. It is simply the first step in what could be a very long journey. So you need to make sure that the people taking that first step with you are the ones that are most likely to stick with you for the whole journey. And not people that will desert you after that first step.
To really succeed and prosper, a brand needs to ensure that new users will keep coming back to purchase again and again. And then once they do, you also need them to start buying more of what you can offer them.
Repeat purchase and cross selling are fundamental to ensure that you get a good return on the investment made to recruit users to the brand. A return is only likely to come if they buy repeatedly. You need repeat sales to provide you with a steady future flow of sales and profit. Pay back on the cost of getting trial rarely happens with just one purchase. Getting new users is an expensive marketing cost, and requires all new users to buy again to make the investment provide a return.
For many businesses 80% of the profits will come from the 20% of people that stick with the product and service.
This is largely because it is less costly to service repeat purchases, or to generate cross purchases, to consumers that love your products.
It is essential to focus your energy on attracting the right target in the right way. All trial is not necessarily going to be good trial. You need to ensure that those that you are investing in to get them to try your product are going to be ones that are highly likely to become a repeat customers.
Resist Sin #1: Resist the temptation to recruit wide and far. Think sniper rifle not shotgun.
Despite the temptation to recruit as many people as possible, every business needs to focus on ensuring that they recruit people that are most likely to provide repeat purchases.
Trial at any cost is not the way to proceed. It is much less about the volume of people you recruit to your brand. It is all about getting the right people to not only buy your product or service once – but to buy into it.
Hence the shotgun versus sniper mindset. With a shotgun approach you will hit many people at random. But a sniper aims to hit the right target to make a killing.
The Groupon Experience shows all trial is not good trial.
Groupon, and other companies like KGB Deals and Living Social, offer daily discounts on every sort of product and service. From massages to cup cakes, from furniture to clothing, from Botox to afternoon tea packages. People buy a voucher and if enough people buy it as well, then the discount takes effect. Discounts are very deep, often over 50% or 60% off the regular price of the product or service.
What is certain is that doing a deal with Groupon, or similar companies, will generate a huge amount of trial of your product or service. In fact too much for some companies. Companies like Need A Cake Bakery in Reading in the UK had to make 102000 cupcakes at a loss of close to £2.50 a cake as the offer generated an excessive amount of trial. It did not generate the repeat business to warrant that massive loss and investment. Rachel Brown, the owner, said “Without a doubt, the worst business decision I have ever made”.
Many companies have used the Groupon approach to attract new users, with the hope of converting many of them to repeat users. Few report success. This is because it is too much of a shotgun approach. You will attract a lot of people to try your product. But they are driven by price and getting a good deal.
You need to use tools that will target better to ensure success.
Resist Sin #2: Resist the temptation to aim off target. Think of the Topless Car Wash.
It is absolutely key that you talk to the right people, with the right promise, when looking to get prospects to try your product. Something this amusing story about a Topless Car Wash illustrates vividly.
One weekend attractive young women were lined up in a road in Long Island New York holding up signs advertising “Topless Car Wash. $5”.
This attracted a lot of eager male car drivers who soon formed an enthusiastic queue for the car wash. Once inside the car wash, they discovered that it was bare chested firemen from the local fire station that were hosing down their cars to raise money for charity.
The claim of “topless car wash” was right, but misleading. It attracted the wrong target for the product. It brought in a lot of traffic, and got the car wash a lot of trial. But most men are not interested in bare chested firemen washing their cars, and so the intriguing and promising claim brought in the wrong target.
In this case it was for a good cause, and a great ruse and joke that all would have enjoyed. But the tale reminds us that you need to tell a story and make a claim that will catch the attention of the right audience for your product. An audience that are likely to come back and give you a more sustainable business. A once off ruse for charity is one thing, but you targeting the wrong audience by getting your message wrong is another.
It also reminds us of the need to ensure you are making a claim that your product can deliver.
The Topless Car Wash illustrates the importance of making claims that your product can deliver. Over claiming and over promising will disappoint and guarantee people will never return.
I think the tale of the Topless Car Wash, although very amusing, is helpful to consider as you think about claims and their role for your brand. Claims and promises are key to getting people to want to try your offering, but exaggerated or misleading claims will create bad feelings and risk people ever trying any of your offerings again.
• The cost of getting people to try your product or service is one of the most expensive marketing activities a business performs.
• To really succeed and prosper, a brand needs to ensure that new users will keep coming back to purchase again and again. Repeat purchase and cross selling is fundamental to ensure that you get a good return on the investment made to recruit users to the brand.
• All trial is not good trial. You need to focus like a sniper to pick off the people that offer the greatest potential for longer term relationships and purchasing. Avoid taking the easier shotgun approach where you may hit a lot of people, but they may not be the right people.
• Remember these 2 key watch-outs:
⁃ Resist the temptation to recruit wide and far. Think sniper rifle not shotgun.
⁃ Resist the temptation to aim for an easy target with a message that your product does not deliver to get trial. Talk to the right people with the right promise to ensure people with the greatest repeat purchase potential try your product. Remember the tale of the Topless Car Wash. Easy recruitment with an over promise will never pay back.