What is Leverage?
Marketing leverage is the ability to control and generate large profit increases from low-cost or no-cost marketing methods.
For example, it takes no extra expense to leverage a second or third purchase when a buyer has committed to spend money with you than it takes to make a single sale.
How NOT To Leverage A Business
The more frequently clients buy from you, the more money your company ultimately generates. One way NOT to attempt to increase buying frequency is by offering frequent and regular discounted sales. These types of sales cheapen the overall perceived value of the product or service you offer — when it is not on sale.
Frequent sales stymie growth because buyers are conditioned to wait to receive discount offers. Your clients and prospect won’t buy until those discount offers arrive. So instead of buying whenever they are hot to purchase, they wait. And wait. And wait. This is a win/lose proposition.
There are more effective ways to increase buying frequency while maintaining credibility and keeping interest for offers high year long. Not just when you scream ’sale’.
For instance, one tool for leveraging existing marketing efforts is to implement an autoship or auto-renewal program into your current marketing and sales process.
One company generated over $100 million dollars in sales in less than three years by using this marketing tactic as their core company strategy.
This marketing strategy works for all direct sales businesses and most manufacturers as well. And it is especially powerful for retail sales.
A Real World Example
Usually I tune out propaganda that plays on the audio systems in stores. But this time…something caught my ear.
The recorded voice blaring over the intercom system at my local pharmacy was making known that now my pharmacy offers a new ‘auto prescription renewal’ service. With this special program the pharmacy will kindly auto-fill all of your prescriptions for you and call you every month to remind you to pick up your prescription.
And the ‘nice’ thing is…you don’t even have to remember to schedule your renewal. The pharmacy handles everything for you.
How nice of them to go through all this work for thousands of customers, right? There’s proof they truly care for their clients, right?
No way. Actually, there’s a profit-center motive behind this scheme. Think about it. The pharmacy doesn’t earn a penny on prescription refills that go unfilled. So this really is a method to stop client attrition and boost prescription renewal frequency — without dropping prices.
The win to the customer is less hassles with remembering to call in, and less hassle having to stand in line to refill prescriptions. The win to the pharmacy is increased renewal frequency from what could be otherwise disloyal or forgetful pharmacy clients.
Though increased profits is the motive everyone wins from this arrangement. Win/win is the only way to make this type of leverage work.
Is Marketing Leverage Right For You?
Maybe. Maybe not.
An auto-renewal program isn’t right for everyone. Perhaps one of the other 48 marketing leverage programs we offer as part of our Total Marketing Package might be a better choice for you instead.
Before you contact us for a consultation to find out, we recommend you first watch our free business growth video. The short video gives greater details on how to evaluate and diagnose your current marketing position for highest growth potential.
Click Here to watch our free business marketing video today.