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CHAPTER 5 MULTIPLYING YOUR BUSINESS PROFITS

Lead Generation Strategy 2: The Secret of the
Free Gift

Advertising is one of the most effective ways to generate leads
quickly for your business. One of the secrets I have discovered
about how to immediately increase the pulling power of any
ad and to lower your acquisition cost is to give away a FREE
GIFT with no strings attached.

About six years ago, I did a lot of advertising and marketing
consulting work for businesses and learnt about the power of
the ‘free gift.’ I was consulting for a company that was in the
very competitive beauty and slimming industry.

The owner had been placing $5,000 worth of ads in the
newspapers and this had generated an average of 50 leads
(enquiries and walk-ins). Of this 50, 10 would eventually take
up a beauty or slimming package. So, his acquisition cost
worked out to be $5,000/ 10 = $500 per customer.

Since each customer spent an average of $500 (Average
Dollar Purchase), and his cost per sale was $50, he made an
average gross profit of $500- $50= $450 per new customer.

Buying a new customer at $500 and making only a gross
profit of $450 from them meant that his ad was actually losing
him money! He lost $50 for every new customer that came
in. He had no idea how to make his ads more effective and
turned to me for help.

I suggested that in the next ad, he placed the headline, ‘ Free
One-Hour Facial & Body Fat Screening Worth $120 for the
First 50 Callers Only’. Although the value of the free services
was $120, it would only cost the business about $30 (cost of
the therapist and lotions).

158 SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES