Recently a friend of mine who owned an electronic shopping cart service explained the following:

He had been offering the first month of his service (normally about $30/month) free to customers to try-before-buying. He experimented with a $3.95/month charge for that first month. He had supposed he would have fewer people who would sign up at all, and, therefore, fewer new customers.

Amazingly he found that the number and percentage of new customers (conversion rate) increased rather than decreased as he had supposed would happen!

He was smart enough to check his data beforehand and measure his results after the change in precise terms. This is the only way he was able to be sure that the nominal price actually worked to produce more monthly accounts.

Indeed there IS a marketing lesson here–actually a two-pronged one.

1. Perhaps when one has spent money, even no more than $3.95, one is more likely to pursue the investment enough to learn how to set it up and make it work to his or her advantage.

2. Perhaps you will be selecting OUT those who were not motivated to learn in the first place by charging. Charging has a “qualifying” element to it.

I believe in most cases the first is more likely the dominant operative.

Here is my experience. As you know “Marketing Consulting with Unbelievable Guarantees!” is my USP (unique selling proposition).

My guarantee is that you pay me ONLY out of the profits my programs make YOU, AFTER all expenses associated with the program have been deducted.

The long and short of it is that, if my programs don’t pay the expenses AND make you a profit, I make nothing. I’ll assure you I don’t spend my time working on marketing programs that don’t work! That is a very attractive offer as you might guess.

I would spend weeks doing market research and designing various aspects of a marketing plan with all the scripting, letter design, email design, website specifications, etc., etc. In essence I was joint-venturing their entire marketing and advertising program.

My experience was interesting. On more than one occasion, I would spend many days and hours working on a project for a client. We would be ready to roll out the program and my client would say, “I really want to do it; I’m convinced it will be very profitable; but right now. . . I’m getting divorced, . . . I’m short of employees, . . . I don’t have enough time,” . . . or whatever. Of course, there was always a good excuse, but the result was the same–no action on my client’s part. And this was even with me doing all the work organizing, directing, and shepherding the projects to the launch point.I was convinced they had no interest in cheating me. I had really not given them anything at that point to steal.So I decided to add one additional “qualifying” element. I would give them the general outline of what I was going to do, then tell them I would require earnest money (in the thousands) up front.I emphasized that that earnest money belonged to them, and that I would return it to them in equal installments in the last 2 months of our agreement out of the funds due me.If they failed to deliver on their end prior to profitability, the money or balance was mine.Two responses resulted.1. They ran from the playing field like they had been shot at! Of course, this showed me who was actually interested and who were “tire kickers.”

Paul Elliott
Marketing With Unbelievable Guarantees!™
http://www.MarketingSuccessBlueprint.com/blog

© 2008, Paul Elliott, All rights reserved world wide.