Had a great discussion with some people in my training session today about how to properly provide an incentive for a sale or appointment, and whether it was even a good idea in the first place.
The idea of providing some incentive to the sale or appointment is as basic as it gets. Newspapers use this extensively – sign up for a subscription, and get your free Shamwow!
When I was in University, students used to sign up for the Sears cards so they could get the free food storage set – and never seemed to realize that if all they consumed was pizza and warm beer they had no need to store any food at all – and that the interest rate on the cards was 29%.
Most of my friends had Sears cards.
So to incent, or not to incent?
First, ask yourself a few questions about the proposed incentive:
1. Is it immediate. Can they get the incentive either now, or very soon. The longer they have to wait for it, the less potent it will be.
2. Does the value of the incentive seem ‘atainable’? The discussion today centred around how it was MUCH easier to get people to fill out a ballot for a $50 drug store gift card, than it was to get them to fill on out to win $10,000. Very few people can conceive of actually winning $10,000. Most people know what they’d do with $50.
3. Does the incentive have a greater utility/higher perceived value than the item you are selling. If so, you have a serious problem. It may seem obvious that if people at least want the item you are giving away, they will take the one you are selling, just to get it. It doesn’t work that way – The students signing up for the Sears card knew – that next April, when the student loan money had run totally dry, that a couple hundred bucks at Sears would get them a really snappy new interview suit for the summer job hunt. The food savers were nice, but they were just a bonus – it was the $500 of available credit that was drawing them in.
Similarly newspapers tend to give away quite extravagant gifts when you sign up for the newspaper. Get a three month subscription, and you can have a Shamwow that sells for $29.99 in stores!
The problem is, not many people read newspapers anymore, but when you offer to give away something people want, if they buy something they don’t want – it creates what psychologists call “cognitive dissonance.” A sense of “that’s not quite right” that not only leads them to walk by the booth, but to associate your product or service with desperation tactics.
4. Have you fooled yourself into thinking “free” is a value? To most people, free is a pretty scary word, because poor salespeople have trained them to expect a brutal ‘time share’ sales pitch will be attached to it. And the larger the ‘free’ item, the worse they expect the pitch to be.
“Sign up for our free draw” = Sign up for a month of pestering phone calls at dinner.
“We’d like to offer you a free subscription” = We’d like to qualify you as a prospect, and sell your name to anyone who wants to buy it.
“I can come by and do a ‘free evaluation’ of your _____________ needs/situation.” = I can come to your house, and not leave until you have a) signed the contract, or b) set my hairpiece on fire.
In these cases, if they don’t see any value in the product or service, the word “free” is going to send them screaming for the exits.
Instead, try offering huge amounts of value up front – asking engaging questions about who they are and what they do – what their current situation is. Try asking one good “Killer” question that not only positions you as an expert, but gets right to the heart of why they need your product.
Then if you feel the need to give away a Shamwow…that’s up to you.
Tags: cold calling, networking, prospecting, sales results, sales success, sales training
