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CHAPTER 5 MULTIPLYING YOUR BUSINESS PROFITS

At first, he asked me what the catch was. I replied that there
was no catch and that we would just offer a free facial to the
first 50 leads. He thought I was crazy and said, ‘but then I
would have hundreds of people wanting this free facial!’ I
said, ‘that’s the point!’

When they are getting their free facial and body fat screening,
your therapist would have the opportunity to show them how
great your treatments are and how you can help them look
beautiful and lose weight. While not every customer that
takes this free deal will end up taking a package, the majority
of leads will! Reluctantly and skeptically, he agreed to test
this out.

Sure enough, the phone started ringing off the hook. Instead
of the usual 50 calls, over 200 people called in for the free
facial and screening. Although the ad said ‘first 50 callers…to
create a sense of urgency,’ we took in all 200!

The result? Out of 200 leads, about 35% (i.e. 70 customers)
took up a slimming or beauty package. So what is his acquisition
cost this time?

The total investment for the promotion was $5000 (i.e. for the
ad) + ($30 x 200) (i.e. the cost of providing the free service)
= $11,000.

Since he got 70 new customers, his acquisition cost dropped
to $157 (i.e. $11,000/ 70)

Is his ad now profitable? Of course! He now takes only $157
to acquire a customer, which generates additional gross
profits of $450. So, he now makes an extra profit of $293
per new customer.

SECRETS OF BUILDING MULTI-MILLION DOLLAR BUSINESSES 159