Ease Cash Crunch by Rewarding Clients Who Buy in Advance

Here’s how day-spa owner Eva Sztupka-Kerschbaumer avoided taking out a loan to buy a micro-dermabrasion machine and two $1,000 facial steamers  - and how you can do even better. 

Eva “presold her spa's services at a discount” – thus getting cash quickly yet cutting her profits. She sent an email to her 8,000 clients. (Unlike most consumer-serving, brick and mortar small businesses she's been smart in collecting email addresses from her clients).  She offered them a free matching gift card on the purchase of any card worth at least $500. Matching! Fast cash, yes, yet done by slashing her profits.

As Wall Street Journal writer Diana Ransom observes, “The advantage was clear. ‘This way I lock in my customer base, purchase equipment and get the cash flow, Sztupka-Kerschbaumer says.”

Yet, adds Ransom, “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, author of Manage for Profit, Not for Market Share.

Here’s a more profitable variation if you want an influx of cash soon without sacrificing nearly as much of your profit margin. 

Offer Your Partner’s Product as a Gift to Your Clients Who Pay in Advance

For clients who will buy, say a $500 card for your services, offer a gift card or cards from one or more partnering businesses that serve the same kind of client. Your partners will make a similar offer to their clients. 

For example, Eva’s day spa might have partnered with a nearby beauty salon, café and clothing boutique. Each partner might have offered clients who paid, up front, for $500 worth of service, a set of three gift cards, from partners, each worth $50 (retail) for a total, tempting value to clients of $150.

 A bonus benefit?

Each partner would have gained a walk-in-the-door, warmed-up introduction to each other's biggest spending clients. And it costs them all less than Eva’s approach.  Eva does partner for some situational sales.

How can you find the most valuable partners if you choose this cash-attracting approach for your business?

 Simple. Ask your customers to name three of their other favorite local businesses. A pattern will quickly emerge of what’s most popular  to your customers – including those who spend the most with you.

 You may ask customers when they are in your business and/or by email (offer them a eBook as a gift - from a partner - to reward them for responding).  When done right, with the best methods and reputable, complementary partners, such alliances are the most efficient way to attract more customers and per-customer spending - without spending much more to acquire them.

More than traditional, “solo” advertising and other marketing efforts SmartPartnering can feel more authentic and valuable to clients and more convivial for you as you share success with other business owners.  As you get to know each other  - and see your mutual market of customers through each other’s eyes - you’ll find other profitable ways to attract and coddle your customers.