Initial Consultation as a Loss Leader

28 replies
Ever notice how companies often give away products (esp. nutrition products such as focus factor, etc.)? They obvioulsy are making nothing on the initial transaction but are looking at lifetime customer value.

Why not give a free one hour marketing consult in hopes of gaining long term clients in the same way as these companies are giving away products?
#consultation #initial #leader #loss
  • Profile picture of the author Defunct
    Originally Posted by PaulintheSticks View Post

    Ever notice how companies often give away products (esp. nutrition products such as focus factor, etc.)? They obvioulsy are making nothing on the initial transaction but are looking at lifetime customer value.

    Why not give a free one hour marketing consult in hopes of gaining long term clients in the same way as these companies are giving away products?
    I do this for all my clients, though it's more a case of meeting up and discussing needs and then suggesting a course of action.

    I don't charge for it, I just consider it common sense.

    One SEO company i know does a full 20 page report to try acquire client, the report is pretty detailed, probably takes 4 hours or more to create.

    The link building company i use gives all my clients one month free also to assess results.
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  • Profile picture of the author PaulintheSticks
    If you're selling consulting and offer the first consultation free its a lot different than selling another product/service and offer a free consultation. Obviously most "free consultations" are sales pitches. Kind of like the free report: 6 things you need to know before you hire a plumber".
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    • Profile picture of the author Defunct
      Originally Posted by PaulintheSticks View Post

      If you're selling consulting and offer the first consultation free its a lot different than selling another product/service and offer a free consultation. Obviously most "free consultations" are sales pitches. Kind of like the free report: 6 things you need to know before you hire a plumber".
      Ah ok, I don't know too much about pure consulting as a business model then.

      It still applies though, if you are consulting long term, it's the same thing really.

      You get paid 1 hour less for your time
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      • Profile picture of the author PaulintheSticks
        Originally Posted by Defunct View Post

        Ah ok, I don't know too much about pure consulting as a business model then.

        It still applies though, if you are consulting long term, it's the same thing really.

        You get paid 1 hour less for your time
        Yes, its the same thing to you/me. But the important difference is in the value to the client. If my free consultation gives the client information they can use to improve their business, its very valuable and would be considered a service.

        Whereas, IF a "free consultation" from a pool installer is about why they should hire my company to put in their pool, there's not nearly as much value to the client and would fall under the sales category, not service.
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  • Profile picture of the author ShawnPeter
    Hi Paul,

    Its a great idea. Surprisingly, I only do it for my online 'list'. But, personally I've been burnt by a couple of offline clients whom I've given the 1st month FREE or given them
    FREE video service for their business. Once they know they can outsource offline marketing for cheap, they'll get these outsourced help to do our work at a much lower price. Though not all clients are like that, fortunately.
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  • Profile picture of the author PaulintheSticks
    Shawn, personally, I wouldn't be too worried about that because my prospects will be hard pressed to find a local consultant that knows much about performance based marketing. ie Hard to outsource.

    But I can understand if you're offering internet marketing services that are easily outsourceable you need to be careful. Reminds me of when I owned a health food store. I heard stories of customers who would come in and get all of their questions answered, then go to Walmart and buy their vitamins.

    That's one reason its important to choose your clients wisely.
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    • Hi Paul

      Agree totally that choosing your clients wisely is critical.

      We made the mistake of poor selection early on and paid the price of doing a lot of work for a NIL result.

      Hopefully we are a bit wiser now.

      Regards

      Bronwyn and Keith
      Originally Posted by PaulintheSticks View Post

      Shawn, personally, I wouldn't be too worried about that because my prospects will be hard pressed to find a local consultant that knows much about performance based marketing. ie Hard to outsource.

      But I can understand if you're offering internet marketing services that are easily outsourceable you need to be careful. Reminds me of when I owned a health food store. I heard stories of customers who would come in and get all of their questions answered, then go to Walmart and buy their vitamins.

      That's one reason its important to choose your clients wisely.
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    • Profile picture of the author AndrewCavanagh
      This is a very common strategy and there are many ways you can use it:

      # First you establish the dollar value of a one hour internet marketing consultation (worth $150 or $500 or whatever you're comfortable with).

      Then you can use that consultation as...

      # A gift people can give to the business owners they know. In other words part of a referral system. At offlinebiz.com many gold members have had good success using this method as part of the Offline gold Client Flood referral system.


      # As a call to action whenever you speak for groups.

      eg. xxxx twisted my arm to give you guys something special so the first 6 people who fill in my feedback form will get a consultation from me worth $x.


      # Something you offer as part of an autoresponder email follow up to get prospects to contact you.


      # An offer you have on the back of a business card or on a voucher that you give personally or other people give away.

      It's important though that the genuine value of these is stressed when you give them out.


      # As call to action in a sales letter or report.

      # And any other methods you can think of.


      Kindest regards,
      Andrew Cavanagh
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  • Profile picture of the author John Durham
    I used to have a Telemarketing room that did insurance lead generation, and our pitch was... "We are offering a free no obligation rate comparision..." or "We are are offering free rate quotes..."

    Every now and then someone would say "Arent they ALL free"?

    But the majority didnt. I would venture to say that Andrews approach here, judging from experience would work well. Sure, every now and then someone says "arent they all free"? Even Attorneys offer free consultations... but there's a reason they do, because it works!

    Anyway, if there is ever a thought of "Yeah but some people will catch onto that..." follow it up with "Most people wont" and you will be correct.

    They do perceive value when you say that.

    Marketing is about numbers, and you wouldnt believe the things that one out of 20 will call you on , but 19 WONT, even though you think they would.

    Originally Posted by PaulintheSticks View Post

    Ever notice how companies often give away products (esp. nutrition products such as focus factor, etc.)? They obvioulsy are making nothing on the initial transaction but are looking at lifetime customer value.
    I think they are looking more at the forced continuity aspect... they get a CC when you order your samples then say "if you dont like it call in and cancel and you wont be billed for your next shipment"... they get to bill 80% of these people for 90 days or so, because hardly anyone calls in and cancels. Thats how we used to do with "free web pages" back in 2000, and sold 19,000 web pages within a years time at about a 80-90% customer retention rate for the first 90 days... then at least 60-70% for the next two years... people just forget to cancel, especially when the charge isnt that significant...

    Of course with a web page for $19 bucks a month, even when they DO see it on their statement alot of times they think its a small price to pay for alot more value than the price... very few cancel within the first couple of years.

    In fact most of the attrition was due to expiring credit cards as opposed to cancellations.
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    • Profile picture of the author PaulintheSticks
      Originally Posted by John Durham View Post

      But the majority didnt. I would venture to say that Andrews approach here, judging from experience would work well. Sure, every now and then someone says "arent they all free"? Even Attorneys offer free consultations... but there's a reason they do, because it works!

      Anyway, if there is ever a thought of "Yeah but some people will catch onto that..." follow it up with "Most people wont" and you will be correct.

      They do perceive value when you say that.

      Marketing is about numbers, and you wouldnt believe the things that one out of 20 will call you on , but 19 WONT, even though you think they would.
      I guess it really comes down to your target prospect. No question that the average person (maybe even the average business person) perceives value with just about anything free and obviously it works.

      But if you're targeting top professional business people, like I am, you realize that they have a much keener sense of value so you need to offer something of much greater value to entice them. A free quote of your services is not going to cut it.
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    • Profile picture of the author AndrewCavanagh
      Originally Posted by John Durham View Post

      Even Attorneys offer free consultations... but there's a reason they do, because it works!
      Most people don't know that it's fairly standard in the legal industry for lawyers to give you the first consultation free if you're a new client.

      As you progress and have more and more referrals and clients you'll get to the point where you charge for most of your consultations to cut down the numbers.

      So it really isn't always free.

      Kindest regards,
      Andrew Cavanagh
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      • Profile picture of the author Amir Luis
        These days it is a common practice for EVERY industry to do Free Consultation... Free Diagnosis... Free Estimate... Free Quote....

        What ever...


        actually as I was typing the thought occurred. Except the medical field.



        It does... and alway will work....
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  • Profile picture of the author Dexx
    Similar to what Andrew said, you can also make your consultations a great (and easy) introduction for your referral system.

    Your clients (or friends/family etc.) can mention how you provide XYZ results for businesses, and normally charge $X,XXX, but they MIGHT be able to get you to "free up some time" as a favor to help out Mr. Business Owner.

    and of course there's multiple ways to play with that.

    HOWEVER make sure that you treat that consultation as IF they paid you for it, keep it to the point, and don't let them get "more than they paid for" from you... i.e. don't let them suck you for information and then never talk to you again.

    Give them useful information, but leave them wanting more! =)


    Cheers,

    ~Dexx
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  • Profile picture of the author djemerald
    Giving things away for free will work in the long runI believe, Its an investment in a future prospective customer. This strategy has been working for years in all kinds of businesses. Maybe there also must be a time to cut your losses with customers who take all the free stuff and never do buy . The question is when have you offered enough?
    I hear it takes 7 contacts before a person buys, sure is a lot less frustrating online than it was door to door though.
    Signature
    DJEmerald

    "professional writing priced right "
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  • Profile picture of the author John Durham
    Ah I see. I was waaaay off. Looked like a Yamaha I used to own from this angle. I have a Laravie myself and a Taylor 810 (Which I like better than the Martins...) Taylor isnt my favorite to be honest but this one model the 810 is the best accoustic I have ever picked up, including any Martin.

    Good taste man! I have looked at those blue ridge guitars. They are really pretty. Good for flatpicking. Beautiful aged colors, and the pickguards on them are beautiful, real nice tone... nice "git fiddle" bro!
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    • Profile picture of the author Amir Luis
      Oh... By the way... My marketing materials were focused on...



      Do You Like Godiva Chocolate?

      Not on how great I am or what I do.

      Features and benefits for the consumer always has to be on top of the mind.

      All they care about... All your clients care about... "What's In It For Me?"
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  • Profile picture of the author Amir Luis
    So back to giving things away....


    The theory of reciprocity works. Has worked for centuries. And will continue to work.

    Here is why.... People... all people... Deep down are good natured.

    Deep down in every man woman and child is the fundamental idea of God. (Don't freak out on me here... I don't care what your belief system is. I am just making this statement to bring you to this point.)

    People are good. Yes... there are some shifty dirtbags out there. Being on this forum. You may have run into a few. You see your WSO on another forum relabeled as thiers... Your content posted in some one else's offline marketing community. Even though you wrote it.

    What ever....

    One bad apple does not always ruin the whole bunch.

    When I cleaned windows for a living I focused on high end residential customers - always dealing with the wife for the most part. I gave away Godiva Chocolates to each person that called for a FREE estimate.

    This "Pamper Package" is what sold more jobs than anything.

    I would do the estimate and explain, "This is a free gift from us... This way you can relax - take it easy, and enjoy the sweeter things in life while we take care of the dirty work."

    I closed 100% of the people I did this with.

    I may have been more expensive than the other quotes. I may have taken longer than another crew. But I had these customers for years until I sold the business and moved to Tucson.

    Reciprocity works. Enough said.

    The Godiva Chocolate cost me $10 and the average house was around $300.

    With out expecting anything in return I would send them cards saying Thank You. Every quarter to six months I would return and they would get another card.

    Referrals picked up greatly after sending Thank You Cards.

    The theory of Reciprocity didn't stop with the chocolates.
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    • Profile picture of the author John Durham
      Originally Posted by Amir Luis View Post

      So back to giving things away....


      The theory of reciprocity works. Has worked for centuries. And will continue to work...
      The theory of Reciprocity didn't stop with the chocolates.
      Indeed Luis now you are talking. I can tell you right now that working by the law of reciprocity is the most effortless way to success. The ole Zig Ziglar "They dont care how much you know, till they know how much you care" I could get deep here, but aside from the "tangible" giving aspect... what makes a great telemarketer is someone who can "Give energy" on the phone as opposed to "Vamping" it. If you can send "energy" and a person is uplifted by your voice... then reciprocity also applies... think about that one!

      Great thoughts here.
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  • Profile picture of the author Amir Luis
    Abso-Freakin-Lutely....

    Part of my success in all my endeavors... Not just Telemarketing Offline Services.

    Is because of the energy I display. It is contagious.

    Thanks John... another seed planted.
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  • Profile picture of the author GuerrillaIM
    A few years ago when I first setup a web design company, I used to sit down with prospects for free (or over the phone) and run them through several questions and really get the the bottom of what they needed. I'd then take the time to write up a report, stating what they are looking for, how we will provide it and the costings/turnaround.

    My competitors were just sending out standard email and trying to close them down with special offers. I was paying £150/lead and closing about 80% of them.

    The lesson I learned is that people want to be listened to. If you can listen to them, let them open up and then give proof you really understood what they were talking about then you will be successful at not only winning the sale but also a long term customer and referrals aswell.
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    • I offer a lead loss and I take it even further. Once you've been working offline for a while, you start hearing the same stuff over and over as to why they don't want to talk to you.

      Sometimes you'll hook them for a while, then they fall away like one guy this week who "knows all about keywords, backlinks" and everything else. Yeah - that's why his website is on page 1 in Google for keywords.....that nobody is searching on!

      So I send them a "going away" report so they can see everything they are doing wrong - in a very nice way, of course!
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      • Profile picture of the author PaulintheSticks
        Originally Posted by Digital Info Diva View Post

        I offer a lead loss and I take it even further. Once you've been working offline for a while, you start hearing the same stuff over and over as to why they don't want to talk to you.

        Sometimes you'll hook them for a while, then they fall away like one guy this week who "knows all about keywords, backlinks" and everything else. Yeah - that's why his website is on page 1 in Google for keywords.....that nobody is searching on!

        So I send them a "going away" report so they can see everything they are doing wrong - in a very nice way, of course!
        Nice!

        For him, you probably included a screenshot of keyword tool results for his keywords.
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  • Profile picture of the author fvandy
    I give away a complete onsite and offsite website appraisal. It is a great way to open doors.
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  • Profile picture of the author MWGrubb58
    Paul,

    I've been a consultant for many years and giving away advice is a great way to get business. I do a few things to make sure I don't have a "Time Vampire" on the line and get a bunch of techniques sucked out of me.

    I had a potential client one time who wanted to talk with me on the phone about helping their business. Once we got to the phone, it wasn't only the owner, but the VP of marketing, the sales director, and the top salesman. Once I heard the comment that everyone had their pencils ready to take notes, I figured this was a "Let's see if we can get the consultant to spill his guts," call.... so I gave just two ideas and the call QUICKLY faded.

    NOW, I generally go through a specific set of questions to find out where their PAIN is at.... then give them MY BEST idea for their situation. Then I wait to see the reaction.

    If it is positive, I usually get a client. If there is no reaction or a negative reaction... I move to the next person. When a prospect DOESN'T get fired up when you given one of your BEST morsels... then it is going to be hard to work with them.

    Life is too short to chase people who don't see the value in what you do.

    Cheers,

    Millard
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