Who has your customer?
This could be one of the most overlooked and profitable ideas I ever discuss. Straight out of the Jay Abraham school of marketing (www.abraham.com) is the concept of “who has your customer” and how can you reach that customer with very little cost. Joint ventures, partnerships and outsourcing are the hallmark of unusual and profitable relationships.
The idea: who is your target audience AND who “owns” that same audience with a non-competitive product or service. In terms of income, you need to think about the worth of that customer over their lifetime or your product’s lifetime. How much are you willing to spend to capture that customer and benefit from the profit over the life of that customer?
Most companies don’t do the research to determine the lifetime worth of a customer as measured against a fixed acquisition cost. The ratios can be hugely profitable.
Two examples:
Soccer City is a new indoor soccer facility in the City of Torrance. My son plays there on Monday nights. Before they opened, I was speaking with the owner discussing this marketing idea.
Soccer City’s audience: Kids 7 to 18, who have parents that can afford a once-a-week evening program. Parents who can afford the special indoor soccer shoes. Soccer fans are interested in health. Doesn’t conflict with their school schedule. Who has this same customer? Local pediatricians, but more importantly orthodontists. Parents who have enough money for their kids braces generally have some disposable income.
Solution: Develop a stand alone “take one” brochure for an orthodontist’s office. “Courtesy of Dr. Smith” (rubber stamp would be fine!). Discount coupon for just the Dr.’s patients to try out the new Soccer City. No cost to the doctor, discount for the patient and the doctor is building goodwill for their patients. Soccer City can place these “displays” in the doctors office for free. Other than the cost of the easel, brochures and someone to drop by and explain the benefits to the office manager, it’s free. A typical “season” for indoor players is over $120 each. A young player could easily spend $500 to $700 over a couple of years.
Nuts and Bolts! Steve owns Lovelady Hardware, the “parent” of The Bolt Room. I love this place. You can get almost any kind of fastener: aluminum, stainless steel, SAE or metric. Socket head, Phillips, hex, you name it. The most profitable items are chrome fasteners. Who uses chrome fasteners: car nuts, hot rodders and motorcycle customizers (Harley Davidson owners!!!).
The local Harley dealer has a problem. HD branded chrome fasteners are expensive, about 4x the price compared to The Bolt Room. A lot of inventory dollars are tied up in chrome fasteners. There are “shrinkage” problems due to the small parts and expensive employees are spending their time selling small fasteners rather than motorcycles. The local Harley dealer doesn’t like to stock, sell or discuss chrome fasteners. But Steve does!
I proposed the following: create a custom Point-of-Sale display that would reside at counter of the Harley dealer. The display would show the various chrome fasteners available from The Bolt Room. Steve’s business cards would be on the display with the Harley dealer’s name on the card for a discount. The customer is referred to The Bolt Room, saves 10% off their already ¼ price and Steve sends a one-time 10% referral fee to the Harley Dealer upon completion of the sale. Steve’s gets a customer, the HD dealer reduces his inventory dollars and receives a commission for doing nothing and the customer saves big money on their fasteners. Everybody wins.
Who has your target customer and what can you do to create a win-win relationship?
Dry cleaners / women’s boutiques
Realtors / new homeowners insurance
New car launch / credit union event
Starbucks Coffee / Borders Books
Geriatric Care / Hospice Care
AYSO / LA Galaxy
