Australian Business Coaching Club Newsletter - How One Business Spends 50 cents to Make $100

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How One Business Spends 50 cents to Make $100

The best earning marketing dollars are spent on your customers rather on advertising where the money goes to some media mogul. Consider this example:

Coles is currently offering to pay the GST on feminine hygiene products under the banner “Why should you be taxed for being a Woman”. Why are they doing this and will it work?

This is a fairly emotional appeal, but as a male I can be objective on this (he says quickly ducking to avoid sharp objects being propelled at him by the females in his life).

Clearly many women feel this is an unjust tax. It was very controversial when first introduced, although the then opposition and now government has done nothing to remove it.

Firstly, by raising this issue, Coles gets far wider coverage than their advertising would otherwise reach. It becomes a topic for talkback radio and newsletters like this.

Secondly, the actual cost for Coles on a typical product of value around $5 will be 50 cents. Given the tight margins in supermarkets, this might be most if not all the gross profit on the item.

Thirdly, it is most unlikely that a woman will visit Coles to buy these products only and go somewhere else to do her weekly shopping. In fact she is likely to get her $100 weekly groceries at the same time as the purchase of these products.

Finally, would someone change where they do their weekly $100 grocery shopping for just 50 cents? If the 50 cents off had been for razor blades or Cornflakes it would just be seen as another special, easily ignored, but in this case, Coles are appealing to women’s feeling of injustice, and some might just change to support the principle.

Will it work? As in all these strategies there is only one way to find out.

Can you think of a way of spending money on your customers to get them to try you?

As the views here are likely to be contentious, I will post this article on my blog where I encourage you to comment and discuss. Will you convert to Coles, or do you just see this as cynical manipulation?

What do you think? Remember, the best commenters this month will receive a $500 printer.

All you need to do now is to Empower yourself and take action ...

May Your Business Be - As You Plan It.

Dr Greg Chapman - The Business Brain Surgeon
The Australian Business Coaching Club