I was walking to work after I got off the bus today and received a pleasant surprise. So surprising I almost forgot where I was (heading to work) and smiled!
I don’t normally buy a newspaper (I try not to read the news too much, it’s a time sink), but today I did because they were giving away a free webcam with any purchase of a local newspaper. That particular paper only costs $1 during the week, so I was essentially getting a webcam for $1.
Not a bad deal.
But that’s not what made me smile. Even though this “act of kindness” was there for a reason, I couldn’t resist buying one of those newspapers and becoming a customer of that newsagent. See, as far as I know, it wasn’t a promotion being run by the newspaper company, but the actual agent themselves.
This gift of a webcam probably only cost them a couple of dollars, but it gave me value of around $20-30 worth. When you take into account the fact that I paid them $1 for it, they probably only lost a couple of dollars per webcam.
But guess what? I’ve now been back to that same newsagent for other things many times over. I’m now a converted customer.
That morning, the line up was out the door to get into that small little newsagent. All over a little Logitech QuickCam 3000 (which works great for the record).
The marketing stunt worked a treat. They generated massive exposure for their newsagency that can often get lost in the crowds of newsagents in the big city. I remembered them.
So how much is a customer worth to you?
Would you spend $5 or $10 or $100 to acquire a new customer that could potentially give you much more in the long run?
Computing what you percieve to be the value of your customer over their lifetime can give you more flexibility when it comes to knowing how much to spend on advertising.
It sometimes make sense to loose a couple of dollars, to gain more later on in the customer’s purchasing lifetime.
My main disappointment was that there was no “take away” items besides the webcam. The webcam got them noticed, and sucked me in, but there was nothing to say where I got this fantastic deal from. Neither the newsagent, or the company helping them out with supplying the webcam got any further exposure.
Besides that one gripe, I think we can all take a lesson away from this:
Know how much a customer is worth to you, determine how much you should spend trying to get them into your sales funnel, and always, always try to drive your marketing dollar further by using smart marketing like this.
