Imagine this.

Business is going great, sales are steady, and growth is happening every day. Suddenly…it’s not happening anymore. Panicked, you fall prey to the first “marketing” salesperson that calls you- be it Mr. Magazine, Mr. Groupon/LivingSocial, or Mr. Newspaper.

This smooth talking sales guy starts with a bit of flattery that might sounds something like this “We only select businesses that have a high reputation in our town”. Then, he gets really serious and starts shooting off numbers for subscribers, viewers, home addresses, or some other statistic that is impressive. (ie We deliver our magazine to over 76,000 households)

Your eyes get wide and excited at the chance of having THAT MANY people know who you are. Then he moves in for the kill. It sounds something like “What’s your average sale?”. You tell him. “Imagine if you converted 1% of our subscribers as customers”. You think to yourself…”Self, 760 is a lot of people!” Then he does some simple calculation from his pocket calculator and gives you a number of POTENTIAL sales based on your average sale X 760. Advertising with them is only a fraction of those would-be sales. Seems obvious, right?

Well it’s not that simple.

So I’m not saying it doesn’t work at all because if that were the case, all these companies would be out of business. But you have to ask yourself…is this really the best strategy for me?

All these one-off marketing attempts are training your customers to do two things:

  1. Always expect a discount on your service before using it. When they don’t get it, they get grumpy and sales will be hurting. Don’t believe me? Ask JCPenney.
  2. Not know their “place” in your business. A super loyal customer gets the same treatment as a newcomer. There’s a reason for price discrimination and loyalty programs. People who patronize your business should feel the benefit of it.

You’ll find this method to be pretty costly as you’ll have to keep pumping lots of dollars to maintain these marketing programs. I would bet that the ROI isn’t the greatest either.

So how do we fix this?

You need to think long-term. How do we turn these one-off coupon motivated customers into lifelong customers? What is another sustainable way to keep marketing without pouring lots of money into these companies? Instead of this shotgun approach, how can I use my current brand ambassadors (people who already love your business) to evangelize their friends?

These are million dollar questions. We have answers.

Cam Vacek
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