We all know and recognize that CASH is king; but I’ve been wanting to put together a series of posts with the sole focus of PUTTING MORE CASH IN YOUR POCKET, via creative trading through a trade exchange like the Bartercard Network.
The majority of tips that will be featured in this series will work if you are a member of Bartercard or not… But what ‘trade exchange members’ will find here, are ways you can easily spend and get real value from your “trade dollars” – in a way designed to: Generate more CASH customers | Increase your customers average CASH spend | Multiply your customers purchasing frequency… and allow you to spend your trade dollars in creative, tax deductible ways.
Question: How much better would your bottom line be if every cash customer spent an extra $10, $50 or $200 on each and every purchase they make with you?
My guess is a lot healthier. You’d be able to work a little easier, possibly even cut down your hours without effecting your current income, you could spend more time with the family (or on the golf course — my preference). You are lucky, as being a Bartercard member and using your trade dollars effectively, there are a number of ways this can easily be accomplished.
Obviously to get your customers to open their wallets that little bit extra and hand more of their hard-earned money over, you must entice and motivate them to do this with some additional offer and/or added value you are not currently offering. Unfortunately, they won’t throw money at you simply because you are a nice guy; customers need to be motivated.
Below is the first of many effective and explosive ways you can motivate and entice your customers to spend more CASH on each and every purchase.
Trigger raffles are one of the most effective ways to provide your customers with the necessary motivation to have them begging you to take their money.
Trigger raffles are raffles where the customers’ entry in the raffle is TRIGGERED only after a particular cash value is spent. For example the customer receives an entry in the raffle when and only when they spend $50 on a single purchase.
How does this increase customer spending, you ask?
Well, the inside secret to this strategy is to make sure the ‘trigger’ value is higher then your current ‘average customer spend’ (A.C.S.).
Every day people, most likely you included, fork over his or her hard earned dollars for a chance to win a raffle. 99.9% of raffles give the entrant nothing in return except the ‘chance’ to win a prize. This ‘chance’ is generally enough to motivate people to part with their money. The beauty of a TRIGGER RAFFLE is that the customers’ motivation to enter is strengthened beyond the simple ‘chance motivator;’ as they will be getting tangible benefits from the money spent to enter. These tangible benefits are generated through the ‘additional’ products they are required to purchase to enter the raffle. Your customer will obviously be getting direct benefits from the products they purchase along with the chance to win. That’s motivation x 200%
To re-highlight how this TRIGGER RAFFLE works please examine the following illustration:
Let’s say you run a small supermarket where the average customers trolley equates to a shopping bill of $40.00. You realise the value in getting your customers to spend more with you and thus run a TRIGGER RAFFLE – with the prize being a $50 dinner voucher at a local restaurant.
For a customer to qualify for an entry into the raffle they need to spend $50, an increase spend of $10. If your little supermarket has 40 customers a day, and 20% of them decide to spend the little bit more to qualify for a entry, that’s 8 customers spending an extra $10 each. That’s an extra $80 of sales a day. Run this raffle over a month (30 days) and it equates to an additional $2400 of CASH sales for only an outlay of $50 (to cover the meal voucher). That’s a whooping return on investment of 4800%.
So as this example illustrates, by not regularly running a TRIGGER RAFFLE you are costing yourself a HUGE amount of CASH – in the way of lost sales.
The finer points:
The way to determine this A.C.S. value is to either look over your previous months trading ledger or track your next 14 days of business, and average out the dollar value of each customers cash purchase. This will give you what your average customer spends in your store on each purchasing occasion.
It is important not to estimate this value, as you might guess a figure which is lower then your customers actual average spend. This strategy is not designed to simply give your customers a gift for doing business with you; it’s intended to motivate them to spend more and increase your bank balance.
Once you have established the A.C.S, the next and important step is to work out how much you should increase this value by. This can either be a % figure, such as 10% more then the current A.C.S. or a set $ value, such as an increase spend of $50. You know your product/service offering better then anybody so this must be determined by yourself.
Just make sure it is realistic and is relative to your raffle prize. You don’t want to make it to high that will not motivate or to low that de-values the raffle prize. Like all marketing strategies TEST and re-TEST works.
This leads onto how BARTERCARD RELATES to this strategy.
Before we start there; let me take a moment to explain how Bartercard (or any Trade Exchange) works:
Let’s say you are a florist again, wishing to get some printing done for your business so you can attract extra sales. In the ‘cash economy,’ the printer might charge $10,000 for the flyers, brochures and business cards that you need. If you approached the printer to try to work out a direct contra (like the one with the restaurant above), it’s fairly unlikely the transaction would occur as the printer would have no use for, say 1000, $10 bunches of flowers to cover the cost of $10,000 for the printing.
However, with the use of a trade exchange this contra deal is possible as trade exchanges offer members an interest-free line of credit to initiate and support trading. If the florist and the printer are members of the same trade exchange, the florist can use their interest free line of credit to pay for the $10,000 worth of printing, in what are referred to as trade dollars (T$). Instead of being in debt or owing the printer directly, the florist now owes the ‘exchanges’ T$10,000. To pay off this debt of T$10,000, the florist over the next 12 months might sell T$2000 worth of roses to the printer, T$500 worth to an accountant, and T$6000 to a reception centre, and so on, all of whom are members of the trade exchange. So you can now see how this contra transaction could work and be facilitated using an exchange.
Let’s look at it from a dollars and cents perspective:
For a florist to sell 1000 T$10 bunches flowers and pay off the T$10,000 debt, they would obviously incur out-of-pocket costs to purchase the flowers at wholesale. I am not a florist, but for this example let’s use the same costs as above and say the average wholesale cost of a bunch of flowers (which they sell for $10) is $3. They will incur a total ‘cash’ cost of $3000 to supply 1000 bunches to the exchange members.
Thus getting the $10,000 worth of printing, for an outlay of only $3000!! — A saving of 70%
I am sure, that as you are an intelligent business owner, you have already figured out how you can use your trade dollars to implement this strategy.
That’s right, use your trade dollars, or interest free line of credit to purchase the raffle prize; get the prizes at a substantial discount and offload your trade dollars in a tax deductible way.
An Automobile Service Center could raffle a professional vehicle detailing, valued at $149.95 (but only pay around $50 for that ‘gift voucher’ if their “numbers” were like the florist)
A Supermarket could raffles a dinning voucher, valued at $80.00 (which would only cost them around $30 if their numbers where like the florist)
A Party Supply Company could raffle a hire of jumping castle for the winners next event, valued at $129.95
A Restaurant could adjust the technique slightly and offer an entry into a raffle for a case of wine, valued at $270 if the dinners purchase a desert.