I spent a year working through a program with Jay Abraham several years ago. Jay is a wealth of information about marketing, joint ventures, and out-of-the-box thinking that can literally transform businesses.
In this short video Jay gets your brainstorming juices flowing around using bonuses in your business marketing. Take a look.
You may have noticed that in addition to discussing the benefits of bonuses, Jay also touched on some concepts you may not be familiar with – lifetime value and marginal net worth.
Let me fill in the blanks for you so the bonus concept will have a more powerful anchor for you in your mind.
When we talk about lifetime value we’re talking the lifetime value that a customer brings to your business. More specifically it is the profit an average customer brings to your business from the first time they buy, including what they buy each year, for as many years as they remain a customer.
So for instance if a you earn a $100 profit on each sale and the customer buys 5 times a year for 3 years, you’d have a lifetime value of $1,500 ($100 X 5 X 3).
So, all else being equal, you can spend up to the $1,500 in lifetime profit to get a customer (that has that lifetime value profile) before you lose money on the proposition.
So if you decided to work out a deal with a local restaurant to buy a $50 gift certificate for $25 (enough to cover their hard costs – and they’d be looking to convert that potential customer that comes into their restaurant into a regular customer) and add that $50 face value gift certificate as a bonus/incentive to purchase a certain product or as an upsell incentive, wouldn’t that make sense?
You’d be spending another $25 to generate a portion of that $1,500 lifetime value. Who knows – you might even want to make that offer to generate more value from an existing customer who might have a larger than average purchasing appetite but just needs that nudge a bonus would provide.
I find that people will often spend large amounts of money on advertising that goes no where or isn’t tracked. Or they spend a boatload of money creating a website or trying to do social media. Or relying on the economy to pick back up.
But often it is the simplest of things, like this, that can get you the biggest bang for your buck.
So why don’t you consider the power of bonuses in your business. Go ahead and brainstorm some ideas. You’ll be amazed how many ways you may come up with to implement this bonus marketing strategy.