An interesting thing happened yesterday that I felt was worth blogging about, something not just important to personal trainer marketing but really to anyone running a business.
We recently ran another of our 6 Week Body Transformation Challenges, one of the prizes for the winner was a vacation on us, a $1000 travel voucher.
This is the second time we’ve given away such a prize, and something we intend to do on a regular basis, that is until I can figure out how to give away cars.
Anyways, I stopped by the same travel agency I did last time, the same travel agency I used to handle all of my arrangements for my adventure to Africa last year. By no means am I a big customer to them, but none the less I am a repeat customer. Now even if I weren’t I think we can all agree how valuable a customer is. If for any reason you’re unsure you should really be using a sales report to determine your average sale, and comparing your new leads to the money spent on advertising from your cash flow statement as a means to determine the average cost of a customer.
Ok…so here’s where this get’s interesting. When I asked to purchase the voucher the agent kindly asked me how I would be paying. I indicated I would pay with my company Visa, her response was that because I was paying by Visa there would be an additional charge for the fees they face from the bank for someone using a Visa. This was instantly a problem for me, can you see why? I think this is something many business owners might overlook, or think that passing on this charge would be more than fine (including the owner of the travel agency) but as I then indicated to the agent it was enough for me to take my future business elsewhere. The agent was puzzled, and if you are too, you shouldn’t be.
Bank fees are frustrating; we pay thousands of dollars of bank related fees every month. In this instance the fee from the travel agency for their Visa processing was 2.8% or $28 on the $1000 voucher. But as a customer what it said to me, is we’d like you to pay this additional fee for giving us a referral. The voucher, once purchased, cannot be exchanged for cash and even has a 1 year expiry. So I have just provided them $1000 worth of guaranteed business (interestingly enough when I worked in electronic sales the statistic for gift cards was $7 spent for every $1 on the gift card, I’m sure it’s different for travel but it’s an example of how valuable this kind of business could be) and introduced them to one of my customers whom they may never have met otherwise. Why am I paying a $28 customer acquisition fee on their behalf? Shouldn’t they be paying me or rewarding me instead? I can pretty much guarantee they pay a much higher customer acquisition fee through every other marketing channel they use.
My point in all of this, I know it seems like a bit of a rant, is that in this day and age where more and more things are automated, every step is met with a challenge, inconvenience or a price one of the greatest opportunities you have within your personal trainer marketing efforts is to make life simple and more enjoyable for your customers.
Acknowledge their value, absorb annoying little fees because you know that other businesses won’t and your customers will remember that. After all would you turn away a $1000 sale for $28? I most certainly wouldn’t.
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Tim Peach June 21, 2011 at 1:15 pm | Permalink |
That is so spot on. I’ve always wanted to “refuse” that with businesses that do that but had no real reason to do so. But it’s so true about it costing them nothing for my repeat business or any customers I may refer to them.
I don’t see why they don’t just suck it up. I never charge those extra’s to my customers, it’s just the price of doing business. We don’t go around saying “Oh, because you came into workout today instead of exercising outside you’re going to have to pay a $2 surcharge for having the lights on in the gym”
Tim Borys June 21, 2011 at 2:40 pm | Permalink |
Great Post Cabel!
Yes, bank fees are annoying and add up quickly. It’s always wise to look for ways to reduce your costs, but nickel and diming customers isn’t the way to do it!
As you’ve said in the past, if you can’t absorb 2.8%, your margins are too low!
The other side of this coin is that it is actually “illegal” to pass the credit card fee on to customers (as described in virtually every credit card company’s “cardholder agreement”).
I’ve mentioned this a couple times to businesses who have tried to charge it, and they have always dropped the additional charge.
Just my $0.02 worth!