The Most Brilliant Marketing Strategy I’ve Ever Seen Part 1 By Adrian Ulsh
I’m often asked by business coaches to detail the most brilliant marketing strategy I’ve ever seen in my life.
You know, I’ve seen multitudes of excellent strategies, but there is one that stands out from ALL the others – BY FAR!
To do justice to this strategy, I feel it imperative to detail this in a two-part series so I can provide you with the details you need to execute this strategy for your own clients. So, in today’s article, I’ll explain this strategy in depth and show you the actual business that I observed using it.
Then in our next issue, I’ll show you additional examples of completely different types of businesses and how they applied this exact same strategy that skyrocketed their revenue and profits.
Trust me when I say this strategy is so powerful it will leave you breathless. And perhaps most amazing of all, this is something you see every day of your life. It just never dawns on you what is actually taking place unless you stop and actually analyze it, as we’re about to do.
As someone who eats, sleeps and breathes marketing, I certainly understand the overall principles behind what I’m about to reveal to you. But it just never struck me as to the scope and depth of the brilliance of this marketing collateral until I really sat down and did an objective analysis of it.
What I’m describing is a Groupon offer I received one day in my email. If you have never heard of Groupon, it’s a deal-of-the-day website that features discounted coupons, usable at local or national companies in the US and Canada. Groupon makes money by keeping approximately half the money the customer pays for the coupon.
It’s an excellent tool for businesses that have substantial profit margins and are looking to drive in a large number of fresh leads and customers in a relatively short period of time. Obviously, if half the money each prospect pays for the coupon goes to Groupon, high margins are required for the product or service offering.
For example, an $80 massage could be purchased by the consumer for $40 through Groupon, and then Groupon and the retailer would split the $40. That is, the retailer gives a massage valued at $80 and gets approximately $20 from Groupon for it. Since most massage therapists have little to no actual expenses associated with their service, they still make a profit, but more important, they get the opportunity to promote future services to a new wave of clients.
However, there are potential problems with this business model. For example, a successful deal could temporarily swamp a small business with too many customers, risking the possibility that customers will be dissatisfied, or that there won’t be enough product to meet the demand.
Gap, a large clothing retailer, was able to handle 445,000 coupons in a national deal, although it experienced server problems at one point, but a smaller business could suddenly become flooded with customers. One coffee shop in Portland, Oregon struggled with an increase in customers for three months when it sold close to 1,000 Groupons on the one day it was offered. In response to similar problems, Groupon officials state that ‘deal’ subscriptions should be capped in advance to a reasonable number.
So, what was this “brilliant” offer I received through Groupon? Well, it was one that most of us have received numerous times, but I can honestly say I have never received one quite like this. This Groupon promotion was for an oil change shop named Econo Lube. They’re an automotive franchise that operates throughout the US and Canada.
Like most oil change shops, they frequently offer discounts on their oil changes as a way to bring you in their door and get you to try out their services, hoping you then remain a loyal customer. This also gives them the opportunity to employ multiple upsell and cross-sell strategies, if the owner of the service shop is savvy in executing these lucrative strategies. Most of these service shops are not. But Econo Lube just may be the ultimate exception in this industry. What they did absolutely left me breathless. Here’s what I surmised happened.
The head honchos at Econo Lube got together and brainstormed every possible and conceivable service they could potentially offer to their customers. So, let’s think about this ourselves for a minute. Most of us have cars, and we occasionally take them in for an oil change, so we’re at least familiar with the process.
When we arrive, the guy behind the desk writes up the work order for the discounted oil change, usually in the range of $24.95 to $29.95, which is typically around a 50% discount from their retail price. They take your keys, a mechanic drives your car into one of their bays, hoists it up on their hydraulic lift, changes your oil, spot checks your major systems, and delivers the car back to you in about an hour.
If they do happen to see something else that appears to be going wrong with your car, they usually bring it to your attention, and ask if you would like it repaired while you’re there. Unfortunately for the oil change shop, pointing out this additional problem usually means more work for the guy that just changed the oil, so he really has no incentive to do a really thorough inspection, and try to get your additional business, since he’s paid by the hour and receives no compensation for his additional sales efforts.
However, the mechanic usually remembers to post a reminder notice on the top portion of your windshield, or on the side panel of your door on the driver’s side, with the mileage listed for your next oil change, typically 3,000 miles, despite the fact that almost ALL cars these days are engineered to go 7,000 miles between oil changes. Most of us have been conditioned for 3,000 miles, so the oil change shops always go with that lower mileage figure. Smart to do on their part. So, think about this for a minute.
What other possible services could an oil change shop offer or entice you with once they get your car up on that lift? Well, what if they offered you coupons for repair work as an added incentive to let them fix those major problems they may uncover from time to time? Perhaps $20 off any service or repair over $200, $40 off if the repair is over $300, and $60 off is it’s over $400.
What if they offered you several additional oil change discounts for 50% off? Most people have other family members or neighbors that might like to take advantage of the lower prices. They could offer to test and recharge your air conditioning unit. Suppose they offered a coupon to drain and flush your radiator? Or rotate your tires, perhaps spin balance them, replace your brakes, repair that annoying “check engine” light, or replace or recharge your battery.
All of these are excellent potential upsell opportunities for this type of business, but how often do they actually attempt to upsell us on these various services? I would estimate I’ve had my car’s oil changed well over 100 times in my lifetime, and I can remember them attempting to upsell me maybe two times. How much money are these types of businesses leaving on the table by not implementing this very simple strategy? I would estimate it would be approximately 30 to 50% of total revenue. That’s a lot!!!
So why don’t oil change shops make this a standard part of their daily operating procedure? The reason, the owners or management of these businesses don’t train their mechanics or staff to do it. They don’t make it a condition of their employment. They fail to hold them accountable for doing it. They never track the additional sales, and if you don’t track it, you can’t measure it or improve it.
So, you would naturally think the simple solution is to just train the mechanics to upsell and cross-sell, and then hold them accountable for doing it. Sounds simple enough, doesn’t it? Unfortunately, it’s not simple. Although implementing an upsell, cross-sell and down-sell strategy can instantly increase virtually any businesses bottom line by a minimum of 34%, very few business owners are aware of these strategies. And they have no idea whatsoever how to train their employees in the execution of them. So, consider this.
Suppose you could completely bypass this problem? Suppose you could implement a sales process that would completely remove any dependence whatsoever on the employees for carrying out this lucrative strategy, and generating all of this additional revenue and profit?
That’s exactly what Econo Lube has done with its marketing collateral. But listen to this. They have not only solved this dilemma; they actually found a way to get the customer to pay them for doing it. And they do it by offering you their services through Groupon, so it initially appears you’re being offered the oil change “deal of the century.” This is absolutely the most incredible marketing tool I have ever seen.
The Groupon email I received offered me 3 oil changes for only $33. That’s an incredible price considering the normal retail price these days for just one oil change runs around that same amount or more. So this is like a buy one, get two free deal. And not only do you get three oil changes for that price, but you can also elect three additional services at EVERY oil change, for a total of nine additional services that you normally have to pay extra for. Many of the services we just discussed were on that free services list.
That’s pretty hard to pass up, and I didn’t pass it up. I jumped all over this offer. I even forwarded the email to my son and both of my daughters and told them they should buy it as well. They all did. Here’s what the coupon I received looked like.
This is the front side. Let’s examine this closely. On the left in the Customer Information section, they list their service center guidelines.
Please call for an appointment. Present membership upon arrival. In other words, bring this card with you and show it to the guy at the desk so he has a sales tool to work from, a tool you bring with you so he can sell you on additional services. I love this thing already. I’m telling you, this is absolutely brilliant! Let’s keep going.
Not valid with any other offers. OK, so no double dipping. That’s pretty standard. But look at point number four. Please allow for $4.50 disposal / shop supply fee plus tax on all oil changes. $3.95 per quart over 5 quarts. OK, let’s think about this. The $3.95 per quart over 5 quarts is standard practice for all oil change coupons, and most cars only take 5 quarts, so this is no big deal. But a $4.50 disposal fee? Per oil change. My $11 oil change just got bumped up 41% in the “fine print” so to speak.
Now honestly, most people won’t bat an eye at that fee. One reason is the fact that they have already paid the full price of the coupon when they bought it initially, so when they get the bill after changing their oil and it’s only $5.00, they still believe they’re getting a great deal. But as a marketer, I know what’s going on here.
The $11 they charge for each of three oil changes covers the 50% they have to pay Groupon, as well as their parts. That $4.50 disposal fee is their profit on each oil change. They don’t pay any fee for oil disposal. In fact, here in the US, we can take used motor oil to most auto parts stores and drop it off for free. They make money recycling the oil, so they gladly accept discarded motor oil at no charge.
And notice how this charge is buried right in the middle of these service center guidelines, and yet still prominent enough that they can claim they aren’t making an attempt to hide the additional charge. Again, brilliant! The next guideline says, valid one year from date of purchase. Offer valid on most vehicles, RV’s, 3/4 ton trucks, full-size vans extra. That’s pretty standard.
Up to three free services per visit, and no customer supplied parts allowed. Notice how the only one of these eight guidelines that grabs your attention is the three free services per visit. People love freebies, but here’s what is so brilliant about that one offer. This is employing a strategy I now use in most marketing I create. Give your prospects multiple offers and make them choose the ones they want.
For example, make them three different offers, and then tell them they can choose any two of them. This makes them sit back and carefully review each offer individually, weigh the value of each of the three offers in terms of perceived value to them, and then make their selection of two of them. Those two now hold tremendous value in the mind of the prospect, and has a dramatic impact in the potential conversion rate for that prospect. If you simply give them ALL three offers as a bonus, they don’t perceive that any of them have true value. They just shrug them off as some freebies they’re going to get, and it doesn’t compel them to purchase. Let’s go back to the coupon.
Notice what’s in the top center section, a reminder that you don’t have to take your vehicle to the dealer to maintain your warranty. They’re already conditioning each prospect to agree to let them perform any additional major repairs that may be needed on their vehicle. Then directly below that is a major upsell offer!
UPGRADE – Use your $29.99 oil change value to upgrade to a synthetic, or diesel oil change. By having this prominently displayed, this will immediately grab the attention of the prospect and for those that desire this service, it puts the responsibility of asking for it on the prospect. Again, this is brilliant since the staff at the oil change shop will typically forget to ask 9 out of 10 prospects if they want this additional service. This coupon continuously shifts the responsibility for the entire sales process to the prospect and away from the business.
This is GOLD!
On the upper right, you will see a series of three additional coupons for $20 off any service or repair over $200, $40 off if the repair is over $300, and $60 off if it’s over $400. These are designed to compel the prospect to allow additional services to be performed should any major repairs be required. Then below those coupons are the service center’s credentials which are there to establish competence and expertise. But now let’s flip the coupon over and check out the backside.
This is the side that gives me goose bumps just looking at it. At the very top are the three free oil change coupons that they cross off as you have them performed. Notice they assign a value to each coupon of $35.99, but they also have in fine print in each of them that $4.50 extra disposal fee.
But immediately after the three free coupons are two additional coupons, both of them good for half price oil changes, a savings of $17.99 each. This is for prospects who may have additional cars, or possibly family members that didn’t take advantage of the original Groupon offer. This is a standard cross-sell strategy – offer the prospect more of what they’re already buying. But now things start to really get wild. Look what’s at the very bottom of this coupon. There’s a total of 8 different services, ALL of them common services that actually need to be performed on a fairly routine basis.
The first one is for an air conditioning performance test to check your cars freon level. It also includes a savings of $20 if you need to add freon. The second is for a free radiator drain and fill, and it also includes $20 off if you choose to have your radiator flushed.
The third coupon is good for 2 complete tire rotations. This is recommended by most car manufacturers every 7,000 miles, so this is a really valuable free service they’re offering here. The fourth coupon is good for a free spin balance for 2 tires. The 5th coupon is for a free brake inspection plus $25 off if you need both front and rear brake service. The 6th coupon is for 2 free vehicle trip checks. This is a service where they check your car out top to bottom before going on an extended journey.
The seventh coupon is a real hot button targeted freebie. How many of us have seen that annoying “check engine” light pop on and wonder if the world was about to end? It leaves you wondering if that light is indicating a small annoyance that needs eventual attention, or is there something of a major nature that needs immediate service. This coupon offers a free diagnostic to put your mind at ease.
And the eighth and final coupon is for a free battery recharge and a complete analysis of your car’s charging system. This is also a valuable service so you know if your battery merely conked out, or if your alternator might be going out. Most service shops charge a fee for this type of diagnostic.
Then notice on the right side just above the eight coupons are several additional coupons with specific discounts on many common replacement parts that just so happen to coincide with the free services offered in the eight coupons. What did Alice use to say in Wonderland – this just gets curiouser and curiouser? Let me explain what I mean by that.
Look at those eight coupons along the bottom again. The first one is for the free air conditioner performance test. This sounds like a really valuable service, and it is. But what does it really mean labor-wise and expense-wise for the service center performing this service? The answer, not much. All they do is connect a hose to your car’s A/C system and check the pressure. It’s a 30 second job. But consider this.
How often do you think they discover that your A/C coolant is below normal? The answer, more than 80% of the time. So, notice that the coupon also offers you $20 off that coolant you’re low on, and they make sure they highlight that they’re saving you $65 when you authorize them to recharge your system right now.
Look at that second coupon. A free radiator drain and fill. Sounds great, but all this means is the mechanic unscrews the little valve on your radiator and the coolant drains out. But guess what? Not ALL of your fluid drains out, only what’s contained in the radiator itself. About half your car’s coolant is trapped in your engine block, and that requires a full system flush to remove it all, otherwise you’ll just refill the radiator fluid, and immediately contaminate it with the older fluid still remaining in your engine block. So, the coupon offers you a $20 discount as a way to compel you to get that complete service performed while you’re there.
And then, you MUST replace that coolant, which is, of course, EXTRA. So now they ding you for the cost of the coolant. Now, I know what some of you might be thinking. I’ll just plan ahead of time to have that as one of the three free services I select at my next oil change, and I’ll bring my own coolant. NO you won’t!
Remember the front side of the coupon. Remember the Service Center Guidelines? That last guideline says, no customer supplied parts allowed. I’m not kidding you; this is absolute genius!
Look at coupon number three – the 2 free tire rotations.
By offering this service twice, and knowing these will always be used because this is a manufacturer suggested maintenance service, this FORCES the mechanic to remove all the tires from the vehicle at least two of the three times this car will be brought in for service.
Since the tires are now off the entire car, it’s a 30 second process to inspect the brakes and shocks. That also happens to be coupon number five, a free brake inspection. So, if both of these coupons are used in the same service, the mechanic kills two birds with one stone so to speak. And if the customer uses these two coupons at different times, then these coupons still force the mechanic to remove the tires, at which time they still check both the brakes and the tire balance.
Typically, at one of these inspections, there will be a better than 50% chance that one or both of these services will be needed, and then let the up-selling begin. Of course, if brakes are needed, that coupon just happens to include a $25 discount on both front and rear brakes, a nice compelling offer to convince the customer to get the job taken care of while the car is on the rack, and they won’t have to schedule this for a later time which would inconvenience them again in the future.
But wait. Notice coupon number four is for a free spin balance of two tires.
This again requires all the tires to be removed. Econo Lube is bound and determined they’re going to get your brakes replaced one way or another. But know this. Normal everyday driving often throws your tires slightly out of balance. And today’s state-of-the-art balance machines are highly sensitive, so even a small variation in balance shows up like a 9.5 earthquake on the Richter scale. Notice on my coupon that the number one has a line drawn through it. Yea, they got me on this one as well.
And I know this stuff gang, but when they pull you back to the balance machine, and show you how much your tires are out of balance, what are you really going to say? But here’s something else I never thought about at the time. You have NO idea which two tires they’re balancing. Notice the coupon just says “spin balance on two tires.” Here’s what they more than likely do. They throw all four of your tires on that machine and balance the two that are already the most balanced.
Then they haul you back to the machine and show you the other two tires that have the largest variations in balance so they get you to agree to pay them the $20 to have the other two tires properly balanced. And let’s face it, most customers will opt for this service since they again perceive that the oil change and the other three services they receive per visit are all free to them, so $20 is actually cheap for everything they’re having done. They forget they’ve already paid $11 for the oil change and they’re about to pay an additional $4.50 for the oil disposal fee. Genius, genius, genius!
The vehicle trip check is probably a gold mine for this business. Obviously, the only customers requesting this service are the ones preparing to take an extended trip by car. They will be willing to fix anything and everything they might perceive to be amiss about their car to avoid any mishaps during their trip. This coupon more or less gives this oil change shop carte blanche to seek out every possible defect, problem or potential deficiency they can uncover, knowing the customer will all but demand it be fixed immediately.
The coupon for the engine light analysis is almost as good. That engine light is on for a reason, and it always indicates that some type of maintenance item or repair needs to be performed, and that translates into dollars for Econo Lube. Knowing that, why would ANY auto repair business ever charge a fee to diagnose a “check engine” light, knowing it’s almost a guaranteed repair or service that will make them money? And yet, most of these places do charge the customer for that service. They just don’t get it. Econo Lube gets it!
And that last coupon for the battery recharge – same thing.
No one requests this unless they suspect there may be a problem. This coupon basically gets the customer to throw the red flag on their own car, and notify the mechanic that there’s obviously a problem in this area.
But can you see what’s really going on here? Each and every one of these coupons is specifically designed to create an upsell or cross-sell service for Econo Lube. And these coupons create the perception that this business is offering massive value to its customers in the process.
But here’s the real genius to all of this. This is the greatest upsell / cross-sell tool I’ve ever seen, and there are actually two reasons why I say this. First, Econo Lube has figured out a way to upsell and cross-sell EVERY single one of their potential additional services to their customers, and get the CUSTOMER themselves to request them. Most customers get visibly upset when you attempt to sell them additional services, and trying to upsell a customer three different services at each appointment would normally result in a lost customer for life.
Econo Lube found a way to get the customer to REQUEST three upsell/cross-sell opportunities for them to employ, and do so at each of three different oil change appointments. But the second reason this is genius is the fact that it also overcomes the problem all of these types of businesses have with implementing an upsell / cross-sell strategy – getting the employees to actual implement the strategy. This coupon all but FORCES each mechanic to perform each customer requested service, and since they’re already going through the motions of performing each service, they might as well show the customer the results, and ask if they want the repair to be made.
Then the additional coupon offers continue to compel each customer to make the decision to have that repair completed while they’re already at the shop, saving them the further inconvenience of having to schedule a follow-up appointment and go through the hassle of bringing their car back again.
But then they add icing to the cake. They’ve gotten the customer to PAY them for this marketing tool. That is absolute genius. They charge each customer $33 to receive a series of coupons specifically designed to increase the amount of money that customer will pay to Econo Lube. That’s like advertising in the newspaper and the customer comes in and buys your product or service, and then pays you an additional amount for the print ad that brought them to you.
One final observation
And this may be the best one of all. By offering you three oil changes for $33, Econo Lube knows you will NEVER take your car to anyone else but them for those three oil changes. For a vast majority of car owners, that’s one year of oil changes. By oil change number three, one full year later, Econo Lube has now “conditioned” you to come to them for your auto service needs. Those three oil changes have mentally conditioned you to do business with them far into the future. Can you now see why I said that this is the most brilliant marketing strategy I’ve ever seen?
So now I want you to ask yourself this.
How can you do something similar to this in your coaching practice as well as helping your clients? Just remember the overall premise here. First, figure out everything you could possibly upsell, cross-sell or down-sell to your customers, clients or patients. Then second, figure out what you can give them for free that will actually get them to request those products or services, and result in them spending more money with you overall.
I want you to really think about this, and start to implement some of your ideas and track your results. Meanwhile, on my next article, I’ll give you additional examples to show you how completely different types of businesses can use this exact same strategy with outstanding results.
So, until next time, here’s to your success.
About Adrian Ulsh
Adrian Ulsh is the CEO for Leader Publishing Worldwide, the largest online provider of coaching services worldwide. Adrian currently works with more than 500 coaches in 24 countries advising them on building 6 and 7 figure coaching practices.
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