By Jim Ackerman, President of Ascend Marketing — What does it cost you to acquire a new customer? It’s important to know, it’s easy to figure out, and it’s a good bet that not one boat dealer in 20 knows the number.
Here’s the formula…
Take the total amount of money you spend in a year on new customer marketing, advertising, and your sale process, and divide it by the number of new customers you get.
Odds are you’re going to be shocked at how much you invest to sell a boat. It’s likely to be a number you’d like to see reduced, and reduced dramatically, if you can. And here’s a way to do it…
Throw a deck party for any customer who buys a new boat.
This is similar to the private sale strategy we told you about in a previous column. Except you’re not holding it at your dealership, and you’re not inviting the guests. Which means it may even be better!
Your customers are inviting the guests – their friends – and the venue will be their boat, or lake house or marina, or the location of their choice.
Look, when somebody gets a new boat, the first thing they want to do is show it off. They want their friends to admire it; they want to invoke covetous envy among their friends, relatives, neighbors and even business associates. Help them.
Why? Because people hang out with people who are like them. Our friends tend to be similar to us. They’ll have similar interests, and they’ll also have similar incomes. Millionaires hang out with millionaires. Plumbers with plumbers. Both may be boat buyers, and both may be worth throwing deck parties for.
We all know how important referral business is to our economic prosperity. Referrals business is the best kind of business there is. When somebody is referred to us, the cost of that new customer acquisition can be as little as zero! A lot cheaper than your current average COA, rest assured. Referrals are easier to close, faster to close, have fewer objections, and probably spend more than the average customer. There’s just no downside to referrals…
Except, perhaps, figuring out how to systematically secure them in the first place.
You know how it is; you sell somebody a new boat then spout out those immortal words that every customer loves to hear…
“Who else do you know who would like to buy a nice boat from me?”
“Duh… Gee, I can’t think of anybody right now. But if I do, I’ll let you know.”
Well, enter the deck party and say goodbye to that awkward exchange forever.
Now it’s, “Congratulations on your smart decision to buy this new boat. We want to help you celebrate. Why don’t you let us throw a deck party for you and your friends to show it off?”
What do you think they’ll say to that? Of course it’ll be yes.
And when they do, you can explain the deal…
- The customer gets to choose the location. (You can limit the distance, or you can say they can put it anywhere, but if it’s beyond X miles, there will be a charge for delivery of the goods and goodies you’re paying for.)
- The customer gets to choose who comes, as long as the guests are friends like him or her, who also like boating, who would like to get into boating, or who might like a new boat. And they must invite at least Y number of friends.
- You offer to pay for food and soft drinks up to – and this is where that cost of acquisition comes in – Z number of dollars. (The Z is your COA or a low multiple of it. For example, if your COA is $500, you should be willing to pay up to $500 for their party. You may even be willing to pay $1,000 or $1,500, depending on who the customer is, how many like-minded people they expect to attend, and how much they spent on their boat. Remember, if they spent $10,000 on their boat, they hang out with $10,000 boat people. If they spent $100 grand, same thing.)
- Tell them that out of your contribution, you’ll also take care of writing, printing and mailing their invitations.
- The only thing you’re going to ask of them is that you or your rep, or maybe a few of your team, are also invited to the party and that you’re allowed to bring some literature, pass out business cards and collect contact info, IF you run into any of their friends who might be in the market.
- If the event is to be held at a location where boats are being used, you might also insist on bringing a couple of models over for demo purposes. Think anybody would object to that?
- Now this is vital… Promise your customer that no actual selling will take place at the party. You want the customer to be the focus of a good time, not a sales pitch.
- Once the party is over, have a systematic program in place to immediately, aggressively, and consistently follow up with any leads generated at the party. Also make sure you have compelling offers in place that will induce people to act quickly.
A couple of final considerations…
It’s probably best to stick with soft drinks for your contribution to the party. If the host wants to provide alcohol, that should be on them. Could keep you out of legal danger. You might want to consult an attorney.
And remember that persistence pays. Once you establish relationships at these no-pressure social events, where your new referral prospects will be very comfortable and un-intimidated, keep working the leads. One post-party contact isn’t going to be enough. It could take a year or two for any individual contact to buy. But better they buy from you because you stuck with and nurtured the relationship, than from a competitor, because you got them wanting, but failed to follow through.
This process is likely to get you at least two new customers, and perhaps many more – over time – for the same amount of money you’re currently investing to acquire a single new customer through traditional advertising methods. And of course, that is exactly why you do it.
For a FREE, 36 page report How To Get More Customers Who Will Pay You More Money, More Often™, send an e-mail request to firstname.lastname@example.org.
Jim Ackerman is President of Ascend Marketing, Inc. and is a renowned marketing speaker. He also publishes the 30-Second Marketer’s Tip O’the Day. Find Jim at www.marketingspeakerjimackerman.com, where you can also subscribe for his daily marketing tip. Jim can be contacted at 800.584.7585.