The Concept of ‘Soft Dollar’

The concept of ‘soft dollar’ is a simple concept. But hardly any businesses harness it effectively. 

It allows you to value add to existing clients. It allows you to develop strategic alliance relationships that get you endorsed into other client databases ... and it gives you the tools to take away the focus from price and minimise the need to discount. 

So what IS ‘soft dollar’? 

In a nutshell, ‘soft dollar’ is something you have, or can create, that has a HIGH PERCEIVED VALUE, but costs little to produce or source. 

Take a pizza store. That’s an obvious one we’re all familiar with. 

The first pizza they sell a customer is encumbered with all the overheads ... wages, rent, power, insurance, advertising, etc. 

However, if they were to offer a SECOND Pizza FREE ... what’s the ‘hard cost’ to provide that second pizza? Some flour, water, cheese and a few extra ingredients. Maybe $3. Yet the perceived value is the same as the first ... Let’s say $12.

This is a classic example. That $3 pizza, positioned as a $12 bonus, can be (and has been) harnessed as a potent marketing tool.

In a similar vein, a beauty salon may offer a $20 hair styling as a gift. Perceived value, $20. Yet, the delivery cost of that service may be $2.

We’ve helped countless clients ... in beauty salons, fitness centres, health care, retail, automotive, financial services, real estate, design and construction, travel ... to rapidly acquire new customers through this concept. It is a concept you must constantly seek to apply. Because it IS so powerful.

Let’s have a look at a few more examples. Take the situation of a professional services provider.

Virtually any professional may use this same strategy. Naturally it has to be ‘packaged’ in a professional and appropriate way, depending on the profession. But the concept is equally as potent.

Take an interior designer. This person may charge out their time at say $150 an hour. It’s VALUED at $150. But it doesn’t cost $150.

The positioning of this offer is critical. If the consultant is seen to be promiscuously giving their time away freely without positioning it correctly, then it loses much of its value.

On the other hand, if this professional ...

• positions the hour as an exploratory consultation, valued at $150 and ...
• dimensionalises the value to the prospect of what they’ll be doing in that hour to analyse, advise and recommend, AND they ...
• give reasons WHY they’re prepared to invest that time with the prospective client, an ‘investment’ in the prospect to that the prospect can fully understand the depth and breadth of the designers services and expertise ...

THEN ... this becomes a classic harnessing of ‘soft dollar’ strategy.   The consultant could launch a whole campaign around this strategy, aimed at highly targeted prospective clients.

Every business can harness this very powerful strategy. Apart from positioning an hour of your time in this way, your ‘soft dollar’ could be: 

•  one of your own low cost high perceived value products that is related to, or enhances your main product offering in some way. An extended warranty perhaps.
• a complementary product you source from someone else. You supply fitness memberships, you ‘package in’ a $55 voucher from a local massage therapist or beauty salon.
• information you ‘package’ into a special report. This one is SO powerful, and so few businesses really harnesses it effectively. (For more great tips, grab a copy of our e-book '21 Tips to Creating an Effective White Paper' ... you'll need to put "21 Tips E-Book" in the comments field)
• an audio tape of a seminar you’ve presented to prospects an interview you’ve scripted to give solutions to hot issues of the moment

The possibilities for ‘soft dollar’ are endless. If you don’t feel you’ve got the expertise to do the packaging, don’t let that be a reason NOT to do it! Find someone who can record a seminar, or a marketing professional who CAN put together a report of packaged information. 

 

Offering packaged information has been recorded to produce up to a 3,000% increase in leads. So it is worth doing.

We'll be really delving into white papers soon, so sign up to this blog to make sure you don't miss that series of blog entries.