Boost Your Business With Testimonials
When used correctly, testimonials can boost your response dramatically. They help build the prospect's perception of believability, stability, honesty, and value in your product or service. When prospects see all those testimonials, especially from people to whom they can relate, they gain confdence in you. They become less worrried about making an error in buying what you sell. Before you can effectively use testimonials, you first have to understand the three different types. The first, is the unsolicited type. This is the type of testimonial you receive without asking. It is important with this type of testimonial that you immediately get permission from the customer who sent it, to use it in upcoming promotions. You should develop a standardized system for following up on the receipt of customer comments. First, you should thank them, and then ask for permission to use their positive comments with their name and address in your future marketing. As second type of testimonial is the solicited type. This is the type you receive by asking through a personal conversation or by letter. When you ask your customer for a testimonial, be tactful. Don't say, "Please send me a testimonial." Instead, ask for comments, both pro and con. Many times negative comments can be as helpful and revealing as the positive ones. When you are soliciting testimonials it is important to make sure they are specific and targeted. The more specific the testimonial is, the stronger it is. Most testimonials are very general, saying for example, "It's great" or "It's wonderful." While these comments may make you feel good, they are not as powerful as specific, targeted testimonials. Ask your customer to write about the specific result he or she received from using your product or service. You want the testimonial to back up and support the benefit that you claim your product or service delivers. A third type of testimonial is when your customer asks you to write it and they sign it. This will happen more often than you think when you are soliciting testimonials. You can use testimonials in a variety of effective and inexpensive ways. One way is to make copies of your testimonials and make them part of a direct mail package. Another way is to have them on your Web site. You can use a testimonial, or part of it, in an ad. You can post testimonial letters within your place of business. And yet another and quit common way, is to publish several testimonials as part of your customer brochure. Instead of filing all your testimonial letters you receive in one category titled "Testimonials," file them by potential use. Some possible categories could be, "Benefit" (what customers liked most about your product or service); "Name value" (testimonials from a recognizable person or company); "Customer type" (male/female, job titles, etc.); "Product type" (what they bought and liked); "Geographical location." Each testimonial category should have a code and a number. The best customers to approach for testimonials are your repeat buyers, because you know they are satisfied with your prouct or service. Spend time refining your request so it sounds right. Remember, you are asking for help, not demanding it. Ask your customers to write their testimonials on their company letterhead because it will add credibilty and be more effective. The more testimonials you have, the better. It doesn't matter how old the testimonials are. Just realize that testimonials are more believable than ads and less expensive. All contents Copyright(c) 2004 Joe Love and JLM & Associates, Inc. All rights reserved worldwide. Joe Love draws on his 25 years of experience helping both individuals and companies build their businesses, increase profits, and acheive total success. A former ad agency executive and marketing consultant, Joe's work in personal development focuses on helping his clients identify hidden marketable assets that create windfall opportunities and profits, as well as sound personal happiness and peace. For Joe, success in life is the comprehensive product of greater wealth and income, better personal relationships, and productive attitudes and environments. He started his personal development services because he sensed a strong need for caring, personalized, and flexible mentoring to individuals from all backgrounds and professions. Reach Joe at: joe@jlmandassociates.com Read more articles and newsletters at: http://www.jlmandassociates.com/
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When developing new products and strategies, coming up with unique ideas is often a struggle. It is one of the reasons why, in any industry, there is so much repetition. One way to generate new ideas and "get the creative juices flowing" is by completing brainstorming exercises using props. There are several ways to incorporate brainstorming into a new product development session. Two of my favorite techniques are skimming business publications and utilizing goodie bags.
Why Cutting Prices Is Like Cutting Your Own Throat
Why cutting your prices is like cutting your own throat.
It's the oldest sales tactic in the world?
And one of the worst?
Price cutting.
Before you make your next price cut in the face of sales resistance, the question you have to ask yourself is not, "Does it work?," but rather, "Can you live with the bargain?"
Here's a pop quiz: you ? in your role as salesperson ? go for the close. You ask the prospect to make a commitment and they don't. What's your first response?
Well, if you are like most people in a selling situation ? whether you are the hired sales guy or the CEO-your first response to people not buying-for whatever the reason-is to say, "Would you buy if? ?," and the "if" is always some variant of, "...if the price was lower?"
And you ask it almost before you ask them WHY they won't buy.
And it's not only when they tell you they won't buy. Many people in sales mentally calculate the discount into their profit calculations, and start discounting even before they try to close the deal. In almost every sales job that I've worked in, people faced with an end-of-quarter crunch to "make the numbers" start playing the discount game. In many industries, it's become common practice to give away all the profits, and many customers are trained to expect it.
Trouble is, people are not usually 'not buying' because your price is too high.
If you've taken the trouble to establish the real of your product or service, you ? and your prospect ? already know that the value far exceeds the price you are asking. (If not, you better go back and rethink the math.)
So if they are saying "no," or simply not saying "yes," it either means they are experienced buyers waiting for you to spontaneously cut your price, or it means they just do not see a sufficiently compelling value?yet.
Cutting your prices will almost never lead to new sales if they didn't plan on buying in the first place, and the effect on your profits can be devastating. Follow these numbers:
Let's say you sell a product for $100. Your cost is $70. That means it carries a thirty percent margin-your profit is $30. Now, to make a sale, you are "forced" to cut your price by twenty percent. Your new selling price is $80. All things being equal, your profit is now $10-instead of $30. That means a 20% price reduction cost you 66% of your profits.
TWO-THIRDS OF YOUR PROFITS for a 20% price reduction!
Cut your price much more and your profit quickly goes to zero. Or lower.
And that's not even the worst of it.
Once you lower prices, they tend to stay low. That $100 widget you just sold for $80? Well, sorry to say, but it's now an $80 widget.
Even more damaging, your like-minded competitors will almost definitely lower their prices, and you, my friend, are in a price war. To win in this scenario, you need deep pockets to sustain a losing position for the duration.
So for these three reasons-depressed profit margins, permanently lowered prices, and the devastation of a price war-it's a bad idea to lower your prices to buy business-regardless of the economic climate.
What can you do instead?
The two main strategies are clarifying and quantifying the value, and packaging products or services to maintain higher prices.
Here's an interesting example. One of my clients-a software company-had a hot prospect who didn't want to buy the typical contract for software maintenance. They felt that 18% per year was just too expensive, and wanted to pay ad hoc instead.
My client knew this was a bad idea. Customers without maintenance contracts typically become your worst. Why? Because they know it's going to cost them each time they pick up the phone for support, so they try not to. Thus, they don't get the right level of service, they don't know how to use the product and they don't get the results they paid for in the first place.
And even though it's their fault for skimping, they point the finger at you and badmouth your company.
On my advice, my client offered the prospect a four year non-cancelable maintenance contract, and gave them the first year for free. And although it was a 25 percent reduction in total purchase price, it never lowered the per year pricing, and it actually guaranteed more than the prospect's original commitment.
Plus, my client locked in that customer for four full years, during which time they rightly expect to sell them additional products and services.
Price cutting is the "lazy man's" response when it's hard to make sales. Unfortunately, it may not boost total revenues, and results in drastically lowered profits on the sales that do get made. Often the outcome includes permanently reduced prices and margins, and even a price war, which has disastrous consequences for all players, except very deep-pocketed ones.
Sell the value instead. Spend the time to discover what your prospect is trying to accomplish, and make sure your product or service helps them do that. Then establish the quantifiable financial impact, and sell them that. Or package, bundle or go for the long-term, multi-year commitment.
There are other approaches that not only maintain price levels, but even support higher ones. To get an overview of those approaches, visit http://www.lemberg.com/tipsandtools.html and download "5 tactics to avoid price cutting."
--PL
© Paul Lemberg. All rights reserved
Reprint rights freely given. Please click here for details.
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