Today, a new client said to me, “Jeff, we need proven principles and processes to drive our future success.”
He’s right. Which is why, certain basics or fundamentals always stand the test of time.
Especially, when they’re creative, unique and unexpected. And they work!
So let me ask you, have you ever given a customer or client a product or service for nothing? Something you’d normally send them a bill or an invoice for, but because of the goodness in your heart, you provided it for free?
And if you had sent them a bill, how much would it have been for?
Believe it or not, I’ve had clients give their customers hundreds, sometimes even thousands of dollars worth of goods and services for free!
Ouch! Now that’s okay, but there’s a better way. Next time, if you’re going to give a customer something for free, something that customer would normally pay for or something with perceived value attached to it, send that customer a bill!
That’s right, send a bill. Yet cross out the amount owed and scribble across the statement: “This one’s on us!” “No payment due!” “No charge!” “Complimentary. Part of our commitment to better serve you!”
This language quickly and powerfully conveys the message that your customer could have paid this actual amount, yet instead, the amount is now saved.
Why is this approach so effective?
First, it let’s your customer know you made an actual investment of time or money to provide a product or service.
Second, it diminishes the potential your decision-maker will always expect to get something for nothing. Yet most important, what this strategy really does is create in a demonstrable way a business advantage with a unique name, I think you’ll like.
This strategy is called, “psychic debt.” And the satisfaction of that debt is likely to have a significantly greater value over the longterm future of your business, than the few extra dollars you might have placed in your bank account now, from the payment of that one bill.
Psychic debt creates a psychological sense of commitment or loyalty to you and your business.
Here’s one way I counseled a distributor client, Joe, about psychic debt: Joe told me he was providing free delivery to his customers. And if he charged a delivery fee, some of his customers would be paying well in excess of $1,000 a month. Once Joe understood and applied the concept of psychic debt, he then sent his customers monthly, quarterly and yearly transportation or delivery invoices.
The actual amounts they could have paid were crossed out. Customers now saw, on a regular basis, Joe truly was providing them with incredible value and tangible dollar savings.
Does the concept of psychic debt only apply to a product?
Of course not. It also applies to your time through consulting, training or the offering of a service. If you provide a client with let’s say three hours of valuable guidance or training at no charge, assign a dollar value to that service and then send them a psychic-debt bill!
1. Don’t give away “stuff” for nothing. Always convey value.
2. Assign a value to your products or services.
3. Send an invoice to stress that value.
4. Cross-off the amount and write a “value message.”
5. Realize “psychic debt” can be far more valuable than actual debt.
Jeff Blackman is a speaker, author, success coach, broadcaster and lawyer who lives part-time on Marco Island. His clients call him a “business-growth specialist.” Send an e-mail to firstname.lastname@example.org or go to jeffblackman.com to subscribe to his free e-letter.
Peak Your Profits appears every Wednesday in the Eagle.