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#5.16: The “Help New Customers Switch” Issue

You spend a fortune trying to reach new customers — but are you blocking them and preventing a sale?

1> Setup Fees Are Silly
2> Absorb Your Competitors
3> Turn Tryers into Buyers
4> Check It Out: Word of Mouth Marketing Association

1> Setup Fees Are Silly

Why are you charging a setup fee to a new customer? Is there are real strategic reason (like screening out non-serious leads)? Or are you just looking for the money? Setup fees are an obstacle to new sales. Why should someone pay you for the privilege of doing business with you? Would anyone shop at Wal-Mart if there was a cover charge at the door? For many buyers, a setup fee is an insult and a waste of time, and most salespeople will waive it anyway. So stop messing around, charge enough for your service to cover your costs, and remove this barrier to getting a new customer.

The Lesson: Stop stopping people who want to buy from you.

2> Absorb Your Competitors

Quark was once the king of graphic design programs, but now Adobe InDesign is eating them for lunch. Why? Because you can open a Quark file in Adobe and start working within minutes. Adobe made switching easy because designers don’t have to redo all their past work.

If you want to steal market share, you need to make sure that your customers can move their data to you seamlessly and easily. Don’t skimp on this feature, and don’t charge an extra fee for migration services. Migration hassles scare away customers and inflate your support costs. Fix it once and for all.

(Hey, — when are you going to offer one-click imports of ACT databases? A million new customers are waiting.)

The Lesson: Start thinking of easy migration as a sales tool instead of a hassle for your support staff.

3> Turn Tryers into Buyers

Drug dealers have been doing it for years: Use a free trial of your product to get people addicted. Put an almost full-featured product on the street, and use it to sell upgrades from within the program. The secret is to build the purchase process right into the usage patterns.

Apple gives away iTunes music-management software for free, teases you with great music, and turns you into a paying customer without leaving the program. Quickbooks offers new products as you need them, with tasteful teasers. For example, when you’re typing an invoice, they mention a time-saving service that will let you email invoices (for a slight fee).

Best of all, this kind of selling ensures that you are the only merchant making an offer at the critical moment of need.

The Lesson: Give away software that sells product right when it’s needed most.

4> Check It Out: Word of Mouth Marketing Association

Word of mouth marketing is fundamentally changing the relationship between marketers and consumers. Learn to do it the right way. GasPedal’s CEO Andy Sernovitz is now the CEO of the Word of Mouth Marketing Association. More than 125 companies are already members of this important nonprofit organization.

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