Upfront Marketing & Pre-Selling

Pre-selling is a great marketing strategy during both low times and high times! Offering your customers an opportunity to gain, save or otherwise get a great deal for pre-purchasing puts cash in your pocket and leaves them with a great sense of satisfaction.

Just ask day-spa owner Eva Sztupka-Kerschbaumer, who says she recently raised $30,000 in a single day. Her Pittsburgh,-Pa. spa, ESSpa Kozmetika Organic SkinCare, needed a quick cash infusion when a $12,000 microdermabrasion machine and two $1,000 facial steamers conked out in April. However, the last thing she wanted to accrue was interest charges, so she didn’t go to a bank to raise funds. And to avoid missing out on future profits, she also didn’t tap a factoring company, which provides cash up front in return for a cut of her company’s future receipts.

Instead, she pre-sold her spa’s services at a discount. She sent an email to her list of 8,000 subscribers and offered them free matching gift card on the purchase of any card worth at least $500. The advantage was clear. “This way I lock in my customer base, purchase equipment and get the cash flow,” Sztupka-Kerschbaumer says.

Of course, a matching gift card promotion may have undesirable consequences like providing discounts to customers who otherwise would have paid the full price and having less cash on hand when customers collect on their freebies. Still, if you’re in a bind and neither credit nor loans are an option, boosting your company’s cash flow can help bail you out, says Hermann Simon, chairman of Simon-Kucher & Partners, a pricing consultancy in Cambridge, Mass., and the author of several books on strategy, marketing and pricing.

Think beyond this example from the spa and apply to your own business. A car wash can pre-sell car washes (they do here in Green Bay…and I’m a huge fan!), a mechanic could pre-sell oil changes, a salon could pre-sell haircuts and so on.

Action Summary: What could you sell today and deliver tomorrow that would immediately help your cash flow while offering a “can’t refuse” deal for your customers? Make a list of everything you sell, both services and products, and look for ways to package, differentiate, bundle and otherwise offer up for pre-sale anything that would add a great deal of value for your customers while boosting your cash flow and ultimately increasing your customer retention.

Source: http://online.wsj.com/article/SB124603061762161137.html#articleTabs%3Darticle