Marketing Your Business - Most Ignored Marketing Rule #1 - Loyal Customers Don't Want Sales

It's the #1 deadly sin of most marketing campaigns.

Take a look at your daily newspaper (if your town still has one) or maybe your mailbox. See all those coupons?

• 10% off!
• SALE!
• Low Price Guarantee
• Save 20%, 30%, up to 45% - and more!

Here is the problem with these offers... you will only get two (2) types of people responding to them:

Type 1 - People who aren't your customers and are just price shopping
Type 2 - Existing customers who would have purchased from you anyway but will take advantage of these discounted prices.

Now, there's nothing wrong with price shoppers - especially in today's tough economy. But if the customers are only buying price - THEY ARE NOT LOYAL CUSTOMERS. The only thing a price-shopping customer sees in your business is what your product or service will cost.

Of course, there are a few businesses that thrive on the low-price business model - WalMart may be the best known. But, if I'm any indicator of what's happening to WalMart's market then they're spiraling towards their own destruction (remember, you read it first here!). I shop discount stores regularly; but I'll shop at WalMart ONLY when I need something cheap - something that I don't expect to last, that I know I'll only use once or twice, and therefore something I don't want to spend much money on. Anytime I'm looking for a real item - something that I expect to keep, use, and cherish for sometime - WalMart is nowhere on my list.

When it comes to WalMart - I'm a price shopper - not a LOYAL CUSTOMER.

Then, there are your existing customers who'll jump on the low prices. This isn't necessarily a bad thing - your customers will have purchased goods or services from you at a really good price. But, it's not entirely a good thing either, since - in my experience - most businesses use sales and discount offers to increase revenue and net profit and not primarily to make happy customers.

A large, retail company recently ran a huge promotion with discounted prices. During the promotion, things seemed to be going swimmingly. Customers were redeeming the discount coupons at a spectacular rate. But, when the promotion ended and the sales data analyzed, the company executives were surprised to find that sales revenues were almost unaffected - the increase was insignificant - even with the huge number of redemptions. Why? Because most of the redemptions came from existing customers who saw an opportunity to save a few dollars. The bottom line? The company's revenue didn't increase, their margins decreased, so they ended up with a smaller net profit during the time of the promotion.

"But," you ask, "doesn't this prove that good customers want sales?"

No, it proves that good, smart customers will take advantage of a sale - but that's not what they're looking for from you.

Loyal customers look for one AND ONLY ONE thing: COMFORT.

• They want to feel comfortable with you and your business.
• They want to feel comfortable that they're making the right decision while they're spending their hard earned money.
• They want to feel comfortable once they've actually shelled out for your product or service.
• They want to feel comfortable talking to their friends about their purchase.
• They want to feel comfortable that - should they ever need your product/service in the future - they know where to go.
• Then, once they feel comfortable - they want something new

Now, here's the concept most business owners either don't know, don't understand, or entirely ignore:

When suspects and prospects, customer and clients don't already have a relationship with a business that provides comfort, they'll shop price to make up for what's lacking.

So, when you're creating offers to send out to suspects and prospects remember:

1. Suspects and prospects don't really know you and feel comfortable with you or your business, so most will ignore your offer.
2. The only way suspects or prospects will consider your offer is if the price is so low that it makes up for their lack of comfort.
3. If your offer is made to existing customers, find something to offer other than price. For example, instead of a restaurant offering a 15% discount on a meal, offer a free, rich, to-die-for desert to every loyal customer that returns to the restaurant within a specified promotional period and orders the latest, delicious new entree. These customers:
   • already know the restaurant
   • feel comfortable that the new entree will be every bit as delicious as advertised
   • may already have tasted (or lusted after) the to-die-for desert
   so this offer gives them something NEW they can feel comfortable about.

Sales and discount offers are short term tricks to increase traffic to your establishment. They may work for a while but, like most short term fixes, there's the problem of diminishing returns - the more you use them, the less effective they'll be.

On the other hand, promotions and offers that focus on building comfortable relationships with prospects and loyal customers will put your business on sure footing for years to come.