How to use loss-leaders as a marketing tool

Let's talk about using “loss-leaders” as a way to market. Once that foot's in the door, you do your whole-home inspection, develop a relationship with the client, and offer choices. If you can't figure how to use and advertise loss leaders, get a mentor or coach to help you through the stages.

Dang you, O'Connell! I followed your advice: Went Flat Rate; cleaned up my act; leveraged my influence and dollars by joining a best practices group; followed your hiring suggestions; and did whole-home inspections. Everything was goin' fine ... then the phone quit ringin'! Now what?

Ah, of all the hats an entrepreneur must wear, the marketing hat feels like it fits the oddest on most of our noggins. But until you can have others market for you, 'ol buddy, suck it up because you'll have to do it thyself. The good news is there are easy ways to go about it, but they require you to be pro-active, not just sit on your duff and wait for the phone to jingle-jangle-jingle.

I talked in an earlier column about doing an e-mail exchange with other trades folk, but that takes quite a bit of work and was fairly unorthodox, although it worked incredibly well for my company. I think entrepreneurs who aren't unorthodox are just glorified handymen, but that's another topic for another time. So let's go more mainstream — proven mainstream.

Let's talk about using “loss-leaders” as a way to market. Retailers use product loss-leaders to get your foot in their door, so why not use service loss-leaders to get your foot in their door? Loss-leaders can be a $99 drain cleaning; an HVAC inspection and furnace filter change (you'd be surprised at how many people don't even know there is a furnace filter!); a safety electrical inspection (how many surge protectors are plugged into other surge protectors?) — anything to gain entrance to the home.

Once that foot's in the door, you do your whole-home inspection, develop a relationship with the client, and offer choices ... or sit in your shop and have your spouse or CSR dry the tears outta your eyeballs. You may not make any money the first visit, but if you do this right, loss-leaders can amount to the cheapest marketing you'll ever attempt.

The use of special cameras — even simple smart-phone cameras — to show clients the inside of their piping, ducts, or potential electrical hazards are all ways to use loss leaders to sell your professionalism.

Any doofus can take pictures. The professional knows and communicates to the client, not only the dangers they face, but the comforts and conveniences available regarding the most precious gifts our modern civilization offers — health, safety, comfort, and security!

Actually, there is no selling, there is simply offering the client choices.

—Ed O'Connell

Is any of this a bait and switch? No. Not when you do what you've advertised. End of the ethics debate.

Now comes the part that should have been made easy by using your camera to show the customer the problem — selling them the repair, upgrade, or replacement to make your visit profitable. Actually, there is no selling, there is simply offering the client choices. It really is this easy!

If you can't figure how to use and advertise loss leaders, get a mentor or coach to help you through the stages. Everything I've written about — from beginning Flat Rate to marketing can be done easily if you take action. The trick is to take the first step! Sure you might fumble around a little before you git it, but if you sit there, criticize, close that thing between your ears you call a brain, then failure is inevitable.

Life's about risk, overcoming fear, “going where no (wo)man has gone before.” If you're risk-averse, if you're scared to even attempt something new, then go to work for someone else. However, there's hope and help, and I've written about them in other articles. Here are three great reasons to seek advice:

1.) You won't have to re-invent the wheel.

2.) Coaches, best practices groups, mentors are available everywhere, and should not be expensive when beginning your journey.

3.) You minimize risk, fear, and failure.

You're a great technician. Proper marketing allows you to present your professionalism. Don't let handymen take away your work with cheap prices. The world's your oyster if you'll open up to a little help, put on some boots, get muddy, and work your butt off for a few years. Difficult? Maybe. Worthwhile? Absolutely.

Have a great fall season.

Ed O'Connell is the founder emeritus of O'Connell Plumbing Inc. He is the subcontracting business coach for smaller contractors and a Service Round Table Coach. He can be reached in Auburn, California, at home/office: 530/878-5273 or at ed.oconnell@outlook.com.

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