The 4 Letter Word That Can Grow Any Business | Dean Holland | TEDxBolton
Summary
TLDRThe speaker shares insights from a decade of entrepreneurial experience, highlighting the power of 'free' in growing businesses. He emphasizes three key strategies for business growth: acquiring new customers, selling more to existing customers, and encouraging repeat business. Drawing from his visit to Borough Market, he illustrates how a cheese store's free samples attracted customers and increased sales. He suggests that offering free items, even if it seems counterintuitive, can be a highly effective marketing tool due to the law of reciprocity. The speaker encourages businesses to consider how they can apply this principle, whether in physical stores or online, to attract customers and build trust, ultimately leading to increased sales and business growth.
Takeaways
- 😀 The speaker emphasizes the importance of having an entrepreneurial spirit and learning from both successes and failures in business.
- 📈 There are three primary ways to grow a business: acquiring new customers, selling more to existing customers, and encouraging repeat business.
- 💡 The speaker highlights the power of the word 'free' in marketing, as it can significantly increase response rates and customer acquisition.
- 🧀 The story of a cheese store at Borough Market demonstrates how offering free samples can attract a crowd and lead to sales, illustrating the principle of giving value first.
- 📚 The concept of 'reciprocity' is mentioned, where customers feel obligated to buy more after receiving something for free, thus increasing sales.
- 🛍️ The idea of 'free' is not just about giving away products but about creating a relationship with the customer and establishing trust.
- 💡 The speaker suggests that the value of a physical item given for free can be perceived higher than a digital one, which can be more effective in attracting customers.
- 💻 The speaker shares examples of how 'free' can be applied to online businesses, such as giving away physical USB sticks with digital content and charging for shipping.
- 🎁 The strategy of giving away free items related to the business (like makeup brushes or books) can attract the ideal customer and lead to future sales.
- 🚀 The speaker encourages the audience to think creatively about how they can incorporate the 'free' strategy into their own businesses to grow and succeed.
- 🌟 The overall message is that offering something of value for free can be a powerful tool for attracting customers, building trust, and growing a business.
Q & A
What are the three primary ways to grow a business according to the speaker?
-The speaker identifies three primary ways to grow a business: 1) Getting new customers, 2) Selling more to existing customers at the point of sale, and 3) Encouraging repeat business from customers.
Why is customer acquisition considered a key challenge in business growth?
-Customer acquisition is a key challenge because it involves getting strangers to trust the brand enough to part with their money, especially when there is significant competition.
What is the significance of the Borough Market story in the speaker's presentation?
-The Borough Market story serves as a real-life example of how offering free samples of cheese attracted a crowd and led to sales, illustrating the power of the 'free' concept in marketing.
How does the speaker suggest using the concept of 'free' in online businesses?
-The speaker suggests giving away physical items related to the business, such as free makeup brushes or USB sticks with valuable content, to attract customers and establish trust.
What is the psychological principle behind the effectiveness of 'free' in marketing?
-The psychological principle is the law of reciprocity, where consumers feel obligated to buy more when they have received something for free, as they feel indebted to the provider.
What is the role of the 'free' offer in the context of the cheese store example?
-In the cheese store example, the 'free' offer serves to attract a crowd, capture attention, and create a sense of excitement, which leads to customers trying the product and making purchases.
How does the speaker use the concept of 'free' in their own business?
-The speaker uses the concept of 'free' by giving away physical items like USB sticks with valuable content, charging for shipping to cover costs, and using this as a way to attract new customers.
What is the importance of targeting the right audience with the 'free' offer?
-Targeting the right audience with the 'free' offer ensures that the items given away are relevant and appealing, increasing the likelihood that the recipients will become paying customers.
What is the role of trust in the process of converting free offer recipients into paying customers?
-Trust plays a crucial role as it is established when customers receive a valuable free offer and enjoy it, making them more likely to consider future offers and become paying customers.
Can the 'free' strategy be applied to various types of businesses?
-Yes, the 'free' strategy is universally applicable to various types of businesses, as demonstrated by examples from the beauty market, a software service, and a chiropractor's offer.
What is the impact of giving away free items on the growth of a business?
-Giving away free items can significantly increase business growth by attracting new customers, establishing trust, and creating opportunities for future sales.
Outlines
🧀 The Power of Cheese in Business Growth
The speaker begins by sharing their entrepreneurial journey and the key to business growth they've discovered over the years. They introduce the concept of increasing customer base, selling more to existing customers, and encouraging repeat business as the three main avenues for growth. The speaker then pivots to a personal anecdote about Borough Market in London, where they observed a cheese store using free samples to attract a large crowd. This strategy not only garnered attention but also led to sales, as customers who enjoyed the samples were offered the chance to purchase more. The speaker is intrigued by this marketing tactic and begins to consider how it could be applied to their own online business.
📈 Leveraging the 'Free' Strategy in Sales and Marketing
In this paragraph, the speaker delves into the effectiveness of the 'free' strategy in sales and marketing. They recount their experience at Borough Market and how the cheese store's approach to offering free samples led to significant sales. The speaker then discusses the psychological aspect of free giveaways, referencing the 'law of reciprocity' where consumers feel obligated to purchase after receiving something for free. Citing an article from Time Business Magazine, the speaker highlights a successful case study of a company that increased sales by 38% through a free product giveaway. The speaker emphasizes the importance of targeting the right audience with the right free offers to attract customers and build a foundation for future business.
🛍️ Practical Examples of the 'Free' Strategy in Various Businesses
The speaker provides practical examples of how the 'free' strategy can be applied across different types of businesses. They discuss traditional marketing tactics such as leaflets, coupons, and free offers in restaurants and chiropractic services to illustrate the universal applicability of the strategy. The speaker then transitions to online marketing, suggesting that while digital giveaways are common, physical items carry a higher perceived value. They share their company's shift from offering digital to physical freebies, such as shipping USB sticks with valuable content, and how this has significantly impacted their business growth. The speaker also mentions other businesses, such as a beauty market subscription service and a software company, that have successfully used the 'free' strategy to attract customers and grow their businesses.
🔑 The 'Free' Strategy as a Key to Business Growth
In the final paragraph, the speaker concludes by emphasizing the power of the 'free' strategy as a key to growing any business. They explain that offering something for free establishes trust, gets new customers through the door, and sets a benchmark for future business. The speaker encourages the audience to consider how they can incorporate the 'free' strategy into their businesses, as it has been proven to increase response rates and customer engagement. The speaker ends with a call to action for the audience to explore the potential of the 'free' strategy in their own business endeavors.
Mindmap
Keywords
💡Entrepreneurial
💡Response
💡Acquisition
💡Reciprocity
💡Value
💡Giveaways
💡Trust
💡Marketing
💡Sales
💡Customer Retention
Highlights
The speaker emphasizes the importance of being entrepreneurial from a young age and its influence on transitioning from offline to online businesses.
Three key ways to grow a business are identified: acquiring new customers, selling more to existing customers, and encouraging repeat business.
The majority of a business's profits are typically made by bringing customers back to purchase more products.
Acquiring a customer is highlighted as one of the most difficult and expensive aspects of business due to competition.
The story of Borough Market in London and the effectiveness of offering free samples as a marketing strategy.
The concept of reciprocity is introduced, where customers feel obligated to buy more after receiving something for free.
An example of a 711 annual Slurpee giveaway is cited, which surprisingly increased sales by 38 percent.
The importance of understanding the ideal customer and offering items that appeal to them for free is discussed.
The use of digital downloadable products as giveaways is contrasted with the higher perceived value of physical items.
The strategy of charging for shipping costs while giving away products for free is detailed as a way to cover costs.
The idea of using free offers to attract the ideal customer and then upselling additional products or services is explored.
Examples from various industries, including dog training, beauty, and website building, are provided to illustrate the versatility of the free offer strategy.
The psychological impact of free offers in creating trust and establishing a benchmark for future business is explained.
The long-term benefits of offering free items to build relationships and increase response rates are discussed.
The concept of 'free' is identified as a powerful word in sales and marketing that can significantly grow any business.
The speaker encourages the audience to consider how they can incorporate the strategy of offering something for free into their businesses.
The transcript concludes with a call to action for entrepreneurs to simplify their approaches and not overcomplicate effective strategies.
Transcripts
yeah that's maybe instead of my
presentation today is to essentially
share with you perform a naked
probably over a decade of testing I'm
somebody that from a very young age has
been very entrepreneurial and that has
led me from some kind of interesting
failed offline businesses into the
online internet business world and
despite all the different things that I
do try and that I do test there's
constantly one thing that continues to
increase response and grow the
businesses that I am their own or and
involved in or advisor and that's what I
want share with you today and the story
is actually going to revolve around
cheese so we'll come back to that in a
short moment but just before we do I
want to just make sure everybody's clear
for those of you that pass do have
businesses or I'm looking to have
businesses there are only really three
ways for any of us to grow our business
the first of which is to get the
customers okay it stands to reason that
customer comes through the door of your
business or visit to your website and
purchasers that you are growing their
business the second of which is to sell
more to the customers at the point of
sale we're all familiar with walking in
the supermarket or a store and you've
got those items conveniently located
just for us to grab the chewing gum the
candy the sweets all these different
things they're there to obviously grow
that business to increase the
profitability of that business and the
third of which is to actually have those
customers return and buy from you again
at a point in the future now
incidentally as we look at these three
ways to grow a business and there really
is no other way ultimately to grow our
business other than this what I can tell
you from the different businesses I'm
involved in is typically the bulk of any
business
prophets will actually be made once
you've got the customer by bringing that
customer back to buy more and more
products but despite that none of that
can obviously happen unless you have
customers in the first place so as I
always look at business I always look at
these three areas first of all how do I
get more customers second of all now I'm
getting them how do I sell more to them
how do I deliver more value to that
person so that then exchange of value
takes place because that's ultimately
what business is about I'm giving you
value you're giving me some back and so
one of the key areas and one of the most
difficult I would say and one of the
most expensive parts of any business is
to actually acquire that customer in the
first place is to get a stranger
somebody that's never met never seen
your brand ever come across your
products never seen your website never
seen anything to do with you to have
that person actually trust you enough to
part with their valued their money and
give it to you especially when there is
so much competition for most businesses
that you're competing with so this
brings me back to my key story now I am
a big food lover in probably not to my
own health I absolutely look through
that to travel I love to eat
and try all different experiences that
generally revolve around anything too
much
and one of my favorite places in the
world just by all the places that I've
ever visited
I love Borough Market in London and one
of the very first times that I visited
for a market I remember walking around
and I was completely amused and in
complete my element that you could try
food for free agent walks around and
every moment it's excitement like the
kids just trapped in the swing store
like walking around the child is food
and we're picking just get it for free
and then I can decide what I want to buy
afterwards when I discover that and I
remember this experiences I walked
around and I remember looking at all the
different stall owners all the different
business ocean that was stood there kind
of quiet like texting on their phones
might not that's not cool and as I
walked around I also notice this huge
crowd I don't know if any of you would
like me but whenever I see a huge crowd
my curiosity takes over like what is
going on over there I've got to go and
take a look and so I stood there
actually she's proud of people and
everything look busy and buy or another
thinking what is happening as far as I
got closer and closer I realized that
was a cheese store now as I got closer
and closer I noticed these two guys all
dressed in white looking like chefs and
they're clean chef whites and one of
them was actually standing in front all
these different cheese samples like
little shavings of cheese and everybody
was crowded around trying it was like
free throw all along the cheese every
means they're trying some ago there's
momentum behind us that's amazing
and the other guys stood next in it also
in whites and as people were trying the
cheese he would say to those people what
do you think of it and as I got closer
and closer I was intrigued by my
marketing brain started taking over what
is going on over here so I got closer I
just listened then I just watched I
noticed something to my amazement the
guy was saying
and some people would say that not
really my favorite but others and quite
a lot of those people would actually say
I love this and immediately upon that
reaction you would say well would you
like to take some time if you want to
come over here and take a look I can get
some for the toughness and you can take
that home you would leave those people
to one side out of the way of the crowds
and we'll make a sale and I remember
standing back thinking huh
so you've attracted all of these people
this frenzy this crowd the swarm to you
and there's other GG store owners all
around but you've got this crowd you've
captured their attention and you've not
only given away this cheese for free but
you're making sales because of it I
remember thinking how different that is
to me in the time but how differently
you've not tried to persuade those
people to come and you've not tried to
force them it it's kind of the opposite
of what you might see as like the
traditional sales environment you know
that the car salesman is chasing you
around the car trying to get you to
purchase and they always chase you away
right we all have experiences like that
some of these try to force a sale on you
and really all it does is make you just
retract and grow and these guys are just
they're like because it's great product
there some of it for free
now you try again would you like to
purchase more they were making a lot of
sailors that way and I remember standing
back thinking man how could I do this
with my online business how could i
engineer this same approach and as I
came away and I went into my madman
scientist zone of doing some
I began to realize that ultimately one
of the most powerful if not the most
powerful words when it comes down to
sales and marketing this four-letter
word three four letters free now in a
context of things a lot of people when
they hear that they think as a business
owner even though most of the breeds and
that sound expensive doesn't that sound
counterintuitive like how am I going to
stay in business if I'm giving away
everything for free well I wanted to
show you a few things and then tell you
how we've adopted this into my business
and just get your mind thinking about
how it could be applied in anything that
you may be doing now or in the future
this is actually an article I came
across in time business magazine and
obviously I won't read all of this to
you but just to give it to you excerpt
handled wisely giveaways are all but
guaranteed to boost sales why one of the
reasons as a consumer you feel obligated
to buy more there is a law of
reciprocity taking place you given me
something I feel almost indebted to you
how many times have you felt that before
somebody's giving you something or
treated you well and if somebody's took
you out for food you think well next
time it's on me why is that because you
feel indebted to that person right now
there was also a test it's further on in
this article Americans at least 711 they
do an annual Slurpee giveaway it's like
absolutely
I guess and they'll add 4.5 million
drinks for free by all accounts you
would think this is going to be a huge
loss
they literally open the doors and say
come in how about for free it's a free
slurpie exhibition just come in walk
through the door get it for free
anything to me they actually increased
sales by 38 percent of that day because
what people do they got the free one
they loved it and they bought more think
about that just give it away for free so
when it comes to giving away stuff for
free to get customers then what do you
have to think about what process do you
have to go through well for me I'm
thinking will do is my ideal customer
who do I want to attract in the first
place
if I have a dog training business would
it make sense to give away cat treats no
right it's not going to serve my
business I have to think about who is
the ideal customer that I need to
attract what items what appeal to them
you know it again coming back to the dog
training example I've got a dog training
business what is going to actually
appeal to the right person the my
consultant I want people that are not
right attack perhaps a particular breed
of dog you know I've got an English
bulldog so for me if I was going to be
given something for free I want it to be
relative to my dog that's going to
attract me now if you're a business
owner with additional things to sell me
to do with English bulldogs I'm now a
prime custom of your business and you
attracted me to you by giving me
something for free
related to them how could we offer it to
you no I use websites ok and how can we
get an improvement it's obviously what
we talked about doing advertising we
have so many platformers now to get our
message in front of people but it's
actually become very very easy to get
the right message different to the right
people now I know not everybody is
obviously for most online business
internet e-commerce so I just want to
show you a few examples that you would
have seen in your everyday life because
what I'm saying to you here today isn't
necessarily revolutionary new it has
been used for decades and decades but
along the way somehow as entrepreneurs I
like to over complicate things and we
forget simple matters because when
something works we tend to think well
that seems too easy let me find it hard
away Emira complicate this so just to
show you how many times have you had
leaflets posted through your door before
you found them in stores or you've been
in restaurants and you find this is like
a coupon allow Joe looks like
pre-dessert nobody have to do to claim
the brief deserve we probably have to go
in and buy a meal but I've attracted you
you could be you could have two options
of two restaurants one you've got free
dessert for where am I going to go
they're both near each other but I can
redeem this factor at this one with a
free dessert I might prefer the food
over there you know what I can say two
pounds on the free dessert over here so
I'm going to go there and it's crazy as
human beings we actually almost can't
resist something that's great in it you
know that's a laugh just recently I was
in the news agents buying some some
breakfast that's picking up some bacon
various things and the lady behind the
counter just sew a seam each that okay
would you like a magazine
yeah it's women's magazine I couldn't
resist
and I still remember better all right we
look for Easter
chiropractors you happen to be a
chiropractor guess walk through the door
by offering them something to frame I
just think I'm showing you two examples
here restaurants and a chiropractor this
is universally applicable I believe to
any type of business what can you offer
for free to get your ideal customer to
take that first step through the door
and when that door is a physical
brick-and-mortar store or it's a website
ecommerce what can I offer for free
let's get that person through the door
now I said I've been able to when I
first saw that thing at the chief store
and where a market my brand started
thinking how could I possibly apply this
to online marketing TG commerce now a
lot of people it's very popular and very
common to give away digital downloadable
products like a free video or white
paper or report something you download
but that the C value of something
digital to compare to physical it
doesn't quite match a physical tentacle
item that you receive carries a much
higher value and that's what I saw with
the cheese this wasn't just some
make-believe picture of cheese like our
food and just look at it this was a
physical thing try the cheese buy the
cheese and so this is what I've been
doing in my company for the last two
three years and it's completely changed
everything and I mean everything I've
gone from for example giving away a free
video or a free downloadable white paper
to taking those same things and having
them put onto like USB sticks and now we
ship those at we give those away for
free
now incidentally because you're probably
thinking oh there has to be a cost to
that well there is but what we'll
actually do we give the items wait for
three and here's the clever part of this
we charge for the postage we charge for
the shipping okay so we don't
necessarily lose money because if you
recall the three ways to grow a business
won't get more customers that's what
we're able to do at a very high volume -
to solve lots of those customers at the
point-of-sale so when people order beans
free things and making is that small
normal amount of the shipping the
postage costs we then they're able to
offer them more things so this is just a
very effective way to attract out of
their customers ideal market into the
business so that we can then flow the
server further add value here's another
one I hope you don't find it too hard to
believe but I have involved in the make
of the beauty market so what do we do we
giving away free makeup brushes why do
you think the people that request and we
send out these free makeup brushes - do
you think they're interested in buying
additional major beauty products yes or
no absolutely absolutely we have a
subscription box service so they receive
stuff on a monthly basis the growing up
having hundreds and hundreds of people
just by giving away free stuff here's
another example a friend of mine right
he gives away free books this is one of
his books given away just under acting
about 100
right now he's not what human classism
author he's he owns a software service
an internet-based website builder by
giving away free books the company was
launched three years ago they are
approaching I believe 60,000 paying
members with a valuation approaching of
1 billion dollars in launched three
years ago gives away three books people
to get a free book they're interested in
building websites the office of the
membership to the website builder giving
away free book so why does free work
then let's just be very very clear on
this
it gets the great product that you own
or sourced into the hands of those that
want to need it without the risk without
having to sell them something so you
don't know me you don't know my company
you don't know the value that I can
bring to you so I got to give that
opportunity of creating that
relationship with you without asking you
to take a risk on it have a free thing
if you like it and I'm sure we'll do
business together again a future so I
there's some wealth and what you'll find
is long if sense about serving to give
it value in your business more will than
words it establishes trust it gets new
customers through that for a door like
the free deserve the brief chiropractic
get someone to take that step through
the door and it establishes a benchmark
to do future business because if I give
you something great that you enjoyed do
you think your parent or more attention
to me in future the answers yes
so guys this is the full letter word
that can grow any business and I want
you to look in all areas of business and
life going forwards how you can
incorporate this as much as possible
because nothing increases response rates
like the word three so thank you very
much Dean home
[Applause]
[Music]
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