Especially during the holidays, our clients want to know how to grow their brands. Whether they have a service business like a restaurant or produce a physical product, they want to get the word out about their quality and value. They have tried advertising, email marketing and giveaways. They have tried discounting, special promotions, and two-for-ones. But is there a more effective way?
We all know that the best form of advertising is word of mouth. A personal recommendation from your friend or colleague means more than all the promotion in the world. You are more likely to take seriously the endorsement of someone you know than any email campaign or display advertising program. So naturally it adds credibility to the recommendation when someone says, “Try this!”
The other form of advertising that works well is a free trial or discount. You think, “What do I have to lose?” But what if you could combine the two methods, the personal referral and the free trial?
We call it, “The Gift They Have to Give.” The idea here is to get your satisfied, return, loyal customers to sing your praises. This holiday gift-giving season is the perfect time to give them a gift that they can give a friend. It’s a coupon for your branded goods or services, but only for a new, first-time customer. When you give the coupon to your loyal customers say, “Here’s a gift you can give to a first-time user of our goods or services. Just put your name here so they will remember who gave them this gift.”
Now several thinks happen:
- Giving. People love to give, especially during the holidays! It’s a way for folks to demonstrate their thoughtfulness to their friends and colleagues. And Gift Certificates are already a welcomed way for folks to give.
- Free. The gift that they are giving for your valuable goods and services is free to them! It costs your loyal customers nothing, but they get their friend’s appreciation for the full value of the gift. In this way, you are thanking your customers for their loyalty.
- Proof. They know the gift is good because it is for products and services they themselves patronize on a regular basis.
- Endorsement. Your loyal customers are now telling their friends to try your brand. They have a natural desire to turn friends on to something good – and it validates their own loyalty to the brand. This is an ideal referral and is highly credible to a new, first-time customer.
- Efficient. Only the coupons redeemed have a cost associated to them, and that is only your cost to produce the goods and/or services. What a great investment! It is earmarked only for a potentially new, loyal customer.
- Focus. Since you now know the name of your loyal customer who sent you their friend (because they signed the coupon), you can go back, thank them, and issue them another coupon for yet another friend. You cannot find more active advocates for your brand!
- R.O.I. When you factor in the value of a new lifetime customer against your “free” sample you are money ahead. And unlike ads and email campaigns, your cost of new customer acquisition is more than justified because it is so efficiently targeted.
By using your loyal customers to endorse your goods and services, you are creating a win-win-win situation where all parties benefit. We have seen this strategy work in business after business, building their brands with credible endorsements delivered as gifts. Your loyal customers will say, “Thanks! I know just who to give this to!”
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders