Now that we’ve come this far, let’s discuss how to sell your service. You’ve created your authority content, you’ve generated paid, earned, organic, and owned traffic, and you’ve executed your contact campaigns. What do you do when you finally have a prospect you can talk to?
That’s what this chapter is about.
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The Traditional vs. the Escalation Model
The standard way you’re probably used to selling your service is to pitch your full service – whether it’s a development project, staff augmentation service, or a monthly BPO retainer. Your sales process probably looks like this: a phone call, a meeting, another phone call, you send a proposal for your core service, and then you make several follow-up calls or send follow-up email, and then you hear nothing back from your prospect.
The traditional model is broken. But, it’s the way it’s always been done, and the only way you’ve ever heard of doing it.
I would like to introduce the “escalation method.” It consists of a few additional steps before selling your core offering, but it has the effect of increasing the percentage of prospects who buy your core offering.
What is the escalation method? You offer your prospects a smaller, less expensive initial offering that lowers the barrier to entry of becoming a client. Then you upgrade them to your core service, or maybe an intermediary offering. Finally, you escalate them to your core offering.
The success of this method can be attributed to the core psychological principles outlined in the book, Influence: The Psychology of Persuasion by Robert Cialdini. In his book, Cialdini discusses six psychological elements of marketing designed to persuade people to do what you want them to do.
One of them is reciprocity. Reciprocity leverages the power of giving something to somebody before asking them for something in return. This creates a sense of obligation with the recipient, especially if what you’ve given to them is really valuable or useful to your prospect.
For example, offering a free executive briefing, as I described in the previous chapter, is a type of reciprocity offer. Sending somebody a copy of your book, or offering a free eBook or report as a download, are other types of reciprocity.
Cialdini also introduces the concept of commitment and consistency. Cialdini says that once somebody has taken action on something, the natural human tendency is to try to be consistent with this initial action.
So, for example, if you offer a small taste or version of your service at a very low cost, it’s much easier for your prospect to say “yes.” It’s an impulse buy. Your prospect doesn’t have to seek budgetary approval for something this small.
But, once they make the first small purchase, and they experience this small “taste” of your service, they’re much more likely to buy something from you in the future. Why? Because in their mind, they have become a customer. They paid you money, even if it was a nominal amount. They now want to stay consistent with that initial tiny commitment. It’s now a psychological need for them.
Finally, Cialdini talks about authority. I mention authority in Chapter 3. In addition to publishing content that establishes you as an authority in your field, when you offer a lower-cost item and deliver something of awesome value, you are also establishing authority. The authority comes from the value, and from the fact that they spent money on something you produced.
The Elements of the Escalation Method
The escalation method is not just a marketing and sales strategy –it’s a solid business strategy. Ryan Deiss, in his article Customer Value Optimization – his version of the escalation method – says it’s the system that McDonald’s, Starbucks, Best Buy, Beach Body (makers of the PX90 workout), and Sports Illustrated have used to dominate their markets and become household names.
The “Before” and “After”
I discussed this in Chapter 1, “Selling Your Transformation – Not Your Service.” You need to determine what your customers have (or don’t have) now, and what they’ll have after they acquire your product or service. But don’t stop at the “not have” and “have.” If you want to really excel at marketing, focus on the feelings, the status, the average day, and the enemy your customers are battling as it relates to the “before” and “after.”
If you can nail down the deeper aspects of the “before” and “after,” you can charge more, create more loyalty, elicit passion and desire, and write excellent marketing copy. If you can identify what a customer feels “before” and “after” they get the transformation your service provides, it then becomes easy to come up with the right words to use in any advertising, landing pages, or blog posts you publish.
For example, if you know that Directors of Development of mid-sized regional banks in the United States are frustrated because they can’t find the talent to build a self-service bank account management app, then you can use that frustration in any advertising offer or landing page you write promoting your outsourced development services aimed at regional banks.
Your Traffic Source
Ryan Deiss says companies don’t have a traffic problem. Instead, companies might have a business model problem, an offer problem, or a measurement problem. If you have the right process in place, traffic is not a problem. According to Deiss:
“What if I told you that every time you get a visitor to a web page you make $10 in profit? Could you get traffic to that web page? Heck yes you could. You could pay up to $10 to get a visitor to that web page and still break even. In fact, you’ll be able to pay more than $10 to get a visitor to that page when you truly understand the whole of Customer Value Optimization.”
Once you’re able to get your escalation method right, then getting traffic to your website should be no problem. Then, you can afford to spend as much as you can to get more traffic, because you know you’ll be profitable with the traffic you get.
Renowned marketer, Dan Kennedy said, “Ultimately, the business that can spend the most to acquire a customer wins.” You just have to have the right escalation method in place when you bring that traffic.
How do you get that traffic? Through paid traffic, earned traffic, organic traffic, and owned traffic, as we discuss in Chapter 5:
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Ryan Deiss likes to compare the escalation method with the dating process. He said that establishing a relationship with new customers is like dating.
The lead magnet is can be compared to the beginning of the dating process, but with potential customers.
Deiss says when you start a relationship with a member of the opposite sex, you don’t ask him or her to get married (or to go to bed with you) the moment you meet them at a party or at a nightclub. If you’re a man, the woman will slap you in the face. If you’re a woman, the man will probably run away.
There is a logical process you go through when starting a relationship with somebody who might one day become your spouse. You meet for the first time, then you meet for coffee, then you might meet for dinner or a movie. Then you might go hiking, and you might start a physical relationship. Eventually you’ll meet the parents. Once you meet the parents, then the next logical step is to ask for your significant other’s hand in marriage.
The same goes for business relationships. If you try to ask your client to buy your core offering from you right away, it’s like asking somebody you just met at a party to marry you.
They don’t know you, they don’t trust you, and they don’t even like you, yet.
So how do you initiate a business relationship? You need to get them to like you first. If you meet somebody at a party, you tell good stories. You ask them to dance with you. You tell jokes.
In business, the way to get a prospect to like you is to engage them with a piece of authority content, like I mentioned in Chapter 3.
Going back to the dating analogy, if you liked each other after the party, you might want to invite the person to go on a coffee date with you. In business the equivalent of that is to offer a lead magnet.
What is a lead magnet?
Ryan Deiss again tells us, “The Lead Magnet is an irresistible bribe that gives a specific chunk of value to a prospect in exchange for their contact information.”
This is usually in the form of a free download, like a PDF, that you give to somebody after they fill out a form. They haven’t bought anything from you, yet, but they are giving up something else of value: their email address.
This triggers Cialdini’s commitment and consistency effect.
The best type of lead magnet is something specific. Instead of offering an eBook on How to Improve Your Software Development, offer something specific like, 10 Tools to Increase Your Development Team’s Productivity by 30%.
Entry Point Offer
Your entry point offer – or EPO – is an impulse buy that makes it easy for your prospects to become customers.
Jason Swenk from JasonSwenk.com, an expert in helping agencies and consulting companies improve their marketing, describes the EPO as a “foot in the door” offer. Instead of trying to sell your core service, which can be a large web design project, software development project, or a monthly retainer, sell them something small, instead.
Swenk says the “foot in the door” offer is a small taste of what it’s like to work with you. It’s something that’s easy to sell, because it’s priced low enough that the person you’re talking to does not have to go to the CFO to get approval for a budget.
According to Swenk, a customer is 20 times more likely to purchase your core offering after they’ve bought your “foot in the door” EPO than if you had tried to sell them your core offering right away.
Swenk lists a few examples of “foot in the door” EPOs, as follows:
A discovery is where you schedule a half-day or full day session with your customer to explore their business. Your goal is to find hidden problems you can help them with. The deliverable is a report listing all the opportunities for improvement your customer has. They can either choose to hire you to solve these issues, or go to a competitor to get them resolved.
A Roadmapping Session
Web development agency Rootstrap.com uses roadmapping before starting any mobile app development project. In fact, their “rootstrapping” process (their proprietary name for roadmapping) has catapulted them into one of the top web development agencies in the U.S.
These sessions are typically a three-week discovery and planning session for which they charge $15,000. The end-result is a working proof-of-concept that startups have used to raise millions of dollars in venture funding. Roadmapping sessions are a great way to plan a development project.
But, more importantly, it’s a way to charge your customers for the discovery and planning most consulting companies typically do for free before writing a full proposal for their core services. Brennan Dunn of DoubleYourFreelanceBusiness.com, and Ben Lee, co-founder and director of Roostrap.com, teach a course on how to sell roadmapping sessions.
When Swenk was running his agency (before he sold it) he used to sell a lot of audits. He offered PPC optimization services, and the audits were designed to discover how much money the customers were losing on inefficient or wasted PPC campaigns. After the audit, he delivered a report that showed clients exactly how much money he could save them. The costs typically ran into the thousands per month.
Proof of Concepts
Many companies offer free functional proofs of concept of applications using HTML5. They look and behave just like real apps, except they’re not connected to any data sources. I believe it’s better to charge for a proof of concept instead of offering it for free. It’s a more effective way of triggering the commitment and consistency factor in your customer’s mind. It turns them into an actual customer, making them want to be consistent with that new status and want to continue being your customer.
Your Core Offering
The lead magnet and the EPO all lead up to one thing: positioning yourself to sell your core offering. If you’ve been able to sell an EPO, then asking your client to purchase your core offering is a logical next step for your customer. It’s just like asking your significant other to marry you after you’ve introduced the parents.
The fact they purchased your audit, roadmapping session, or discovery means they are interested in the result your core offering can bring them.
But you must decide what your core offering is. Is it a one-time project, or is it a retainer? I would like to suggest that your core offering should be a one-time project, and that a monthly retainer is a profit maximizer. I describe the profit maximizer below.
When do you make the core offering? Typically, after you’ve finished delivering your EPO, or “foot in the door” project. The deliverables from an audit, discovery, or roadmapping session should map out next steps for your customers. The next steps are your core offering.
Swenk positions a one-time project as the next logical step. This can be an app development project, a new website, or something else that has a finite deliverable and schedule.
The Profit Maximizer
Ryan Deiss says that often a core offering is still not the vehicle that makes your company profitable. He cites the example of McDonald’s, which is known as a fast food hamburger restaurant. McDonald’s markets hamburgers, but when you walk into the restaurant they offer fries and a soda, as well – a value meal. McDonald’s pioneered the concept of the value meal. For a fixed price you get the hamburger, fries, and a drink.
McDonald’s makes its profit on the meal, not on the hamburger. But the hamburger is the core offering. For McDonald’s, the cost of acquiring a single customer is $1.91, and the cost of a hamburger is $2.09. They make only $0.18 profit – which is almost no profit. But McDonald’s makes $1.14 extra when it sells fries and a drink along with that hamburger. That’s $1.32 profit per customer!
A typical profit maximizer for a consulting company is a retainer deal. By charging from $5,000 to $20,000 per month or more, you boost the profits you make on each customer, plus you generate steady cash flow that is vital to your company.
What additional services could you offer that can serve as profit maximizers? If your core offer is staff augmentation services, maybe your profit maximizer could be turnkey project software development that you manage. If your core offer is outsourced customer service, maybe your profit maximizer could be sales qualification services. If your core offer is SAP integration services, maybe your profit maximizer could be big data services.
The Return Path
Finally, what are you going to do to get your customers to return to you more often to buy more products or services? If you offer retainer services, that’s not a problem. However, if you only do project work, you need a way to keep your customers coming back for more – and coming back more frequently.
That’s where customer marketing comes in. Marketing does not end when you acquire a new customer. That’s when it begins.
You need to offer additional marketing communications strategies to keep your company top of mind with your customers. The best way to do that is good old-fashioned email. Send out regular emails that provide education, information about special deals your company is running, or inviting your customers to webinars, events, or conferences.