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Discussion in 'Business Operations' started by MowinMopar, Mar 26, 2009.
What do you all think about offering incentives for new customer's??
I never do it, also I never did understand it, is Business really that bad ?
I do, I think its a great idea. Yes you may be loosing that money for that one mowing and yes that can add up to be hundreds or maybe even thousands of dollars every season however, consider it an investment. You loose one mowing and gain a whole season of mowing with anoher account. I dont care how horrible business is, If you want more clients it is a great idea.
I offer it. Most clients send referrals my way and refuse the free mowing when I discount it on their invoice anyway. If I can mow a few $30 clients free each year and gain a few good clients, then I'd say it's on par with spending money advertising other ways.
I offer a $5 per cut discount to current customers if they refer someone to me that signs up
Gives the customers a little incentive to work for you
This is the way I figure it
$5 discount for one year(20 cuts around here)= $100
gain one $40 per cut yard times 20 cuts=$800
I clear $700
And all Ive really done is my usual outstanding job
That it is a cheap ongoing advertising program, very easy,.. unless your customers don't like you, or you just give bad service... Just by putting a sentence on your invoice.
They get one free cut(avg $40) for each customer that signs a yearly contract(avg 1500.00).
Or 50.00 off a yearly Fertilizer program avg $750 if they refer a fert customer.
it's a good way of having your existing clients do some advertising. What is the cost of a free cut...nothing compared to the cost of a new account, especially if its the next door neighbor. No windshield time or extra vehicle fuel. To me its a no brainer. Although we don't do a free cut but we do do a certain amount off for each account gained. We also give more discounts for the more work you sign up for.
another thought good customers arent going to send you non payers
We send our customers a restaurant gift card when they refer a new customer to us ($50). We also send them a hand written "Thank You" note.
We also take it one step further and also send these to the new customer.
Before you slam me for "wasting" too much money I'll tell you the logic behind this. We service swimming pools for about $150 per month. Our typical cost of acquiring a customer through more traditional advertising is between $50 and $100. Our referrals always turn out to be excellent customers. When we decide to sell some or all of our routes, the business will be valued at a little over $1000 per customer. I will gladly pay a $100 for a $1000 customer. Any day of the week, all day long. Even if we never sell them, we recover our initial investment in 45 days. If you can do math you will understand the value of a referral plan.
Also, we chose the gift certificate route because we never give our service away for free. We want the customer to remember that what we do is of value.