How To Grow Your Business: The 4 Letter Word That Grows Any Business
This is Dean Holland’s full and complete TEDx Talk presentation in Bolton, England where he reveals how to grow your business using that magic four letter “F” word…
“Thank you everybody. It is awesome to be here. And the presentation today is to essentially share with you the culmination of probably over a decade of testing.
I’m somebody that, from a very young age, has been very entrepreneurial. And that has led me from some interesting, failed offline businesses… into the online internet business world.
Despite all the different things that I try, and that I test… there’s constantly one thing that continues to increase response, and grow the businesses that I either own or am involved in, or advise on.
And that’s what I want to share with you today. The story is actually going to revolve around cheese – so we’ll come back to that in a short moment.
But just before we do, I want to just make sure everybody’s clear… for those of you that perhaps do have businesses, or are looking to have businesses.
There Are Only Three Ways To Grow Your Business
1. The first of which is to get more customers, okay? It stands to reason that, if a customer comes through the door of your business, or visits your website, and purchases… that you are growing that business.
2. The second of which is to sell more to the customers at the point of sale. We’re all familiar with walking into a supermarket or a store, and you’ve got those items conveniently located just for us to grab at the checkout.
Y’know the chewing gum, the candy, the sweets… All these different things are there to obviously grow that business, to increase the profitability of that business.
3. And the third of which is to actually have those customers return and buy from you again at a point in the future.
Now incidentally, as we look at these three ways to grow a business – and there really is no other way, ultimately, to grow a business other than this… What I can tell you from the different businesses I’m involved in, is typically…
The Bulk Of Any Business’s Profits Will Actually Be Made Once You’ve Got The Customer
…by bringing that customer back to buy more and more products.
But despite that… none of that can obviously happen, unless you have customers in the first place. So when I look at building a business, I always look at those three areas.
First of all, how do I get more customers? Secondly, now I’m getting them, how do I sell more to them? How do I deliver more value to that person, so that an exchange of value takes place?
Because that’s ultimately what business is about. I’m giving you value, you’re giving me some value back.
And so one of the key areas, and one of the most difficult I would say, and one of the most expensive parts of any business… is to actually acquire that customer in the first place.
To get a stranger… somebody that’s never met you, never seen your brand, never come across your products, never seen your website, never seen anything to do with you… To have that person actually trust you enough to part with their value, their money, and give it to you. Especially when there is so much competition from most businesses that you’re competing with.
So This Brings Me Back To My Cheese Story
Now I’m a big food lover, probably not to my own health benefit. I absolutely love food. I love to travel and I love to eat, and try all different experiences that generally revolve around eating too much – because I’m always hungry!
One of my favourite places in the world, despite all the places that I’ve ever visited… I love Borough Market in London. And one of the very first times that I visited Borough Market, I remember walking around and I was completely in my element – in that you could try food for free as you walked around.
And I remember this excitement, like a kid trapped in a sweet/candy store, walking around and I can try all this food! And I can just get it for free – and then I can decide what I want to buy afterwards, when I’m full.
I remember this experience as I walked around, and I remember looking at all the different stall owners, all the different business owners. And some of them were stood there, kind of quiet like, texting on their phones. And I thought, “Huh, that’s not cool.”
And as I walked around…
I Also Noticed This Huge Crowd
I don’t know if any of you are like me, but whenever I see a huge crowd, my curiosity takes over. I’m like, what is going on over there? I’ve got to go and take a look.
So I stood there and I saw this huge crowd of people, and everything looked busy and vibrant. And I’m thinking, what is happening? As I got closer and closer, I realised that it was a cheese stall.
Now as I got closer, I noticed these two guys all dressed in white, looking like chefs in their clean chef whites. One of them was actually standing in front of all these different cheese samples, like little shavings of cheese.
And everybody was crowding around trying it. It was like, free-for-all on the cheese! And everybody’s there trying… and some are going, “Mmm”, and some are going,
“Oh My Gosh, That’s Amazing!”
And there was another guy stood next to him, also in whites. And as people were trying the cheese, he would say to those people, “What do you think of it?” As I got closer and closer, I was intrigued. My marketing brain started taking over. What is going on over here?
So I got close and I just listened in. I just watched. And I noticed something, to my amazement. The guy was saying, “What do you think of that?” And some people would say, “Not really my favourite.” But others, quite a lot of those people, would actually say, “I love this!”
And immediately upon that reaction, he would say, “Well, would you like to take some home? If you want to come over here and take a look, I can get some cut off this and you can take that home.” And he would lead those people to one side, out of the way of the crowds, and would make a sale.
I Remember Standing Back Thinking…
“So you’ve attracted all of these people, this frenzy, this crowd, have swarmed to you. And there’s other cheese stall owners all around, but you’ve got this crowd, you’ve captured their attention. And you’re not only giving away this cheese for free, but you’re making sales because of it.”
And I remember thinking, how different that is to me at the time. Like, how different – you’ve not tried to persuade those people to come over. You’ve not tried to force them. It’s kind of the opposite of what you might see as the traditional sales environment.
Y’know, like the car salesman that’s chasing you around the car lot, trying to get you to purchase. And they almost chase you away, right? We’ve all had experiences like that. Somebody’s trying to force a sale on you, and really all it does is make you just retract and run.
These guys were just there – like, we’ve got this great product, there’s some of it for free. Now you’re trying it, would you like to purchase more. And they were making a lot of sales that way.
And I remember standing back thinking…
“How Could I Do This With My Online Business…?”
“…How could I engineer this same approach?”
As I came away and I went into my madman/scientist zone of doing some crazy research on everything I could. I began to realise that ultimately one of the most powerful – if not the most powerful words, when it comes down to sales and marketing… is this four-letter word; “free”.
Now in the context of things, a lot of people when they hear that, they think – as a business owner, “Giving away my stuff for free? Doesn’t that sound expensive? Doesn’t that sound counter-intuitive? How am I going to stay in business if I’m giving away everything for free?”
Well I want to show you a few things, and then tell you how we’ve adopted this into my business, and just get your mind thinking about how this could be applied in anything that you may be doing now or in the future.
This is actually…
An Article I Came Across In Time Business Magazine
…and obviously I won’t read all of this to you. But just to give a few excerpts…
“Handled wisely, giveaways are all but guaranteed to boost sales.” Why? One of the reasons as a consumer is… “You feel obligated to buy more.”
There is a law of reciprocity taking place… “You’ve given me something – I feel almost indebted to you.”
How many times have you felt that before? Somebody’s given you something, or treated you well. Or somebody’s took you out for food, and you think, “Well, next time it’s on me.”
Why is that? Because you feel indebted to that person, right?
Now there was also a test that’s further on in this article. An American company, 7-Eleven… they do an annual Slurpee giveaway. It’s like our Slush Puppie in the UK, I guess. And they gave away 4.5 million drinks for free.
By all accounts, you would think this is going to be a huge loss. They literally opened the doors and say, “Come in. Have one for free.” It’s a free Slurpee exhibition, like, just come in, walk through the door, get it for free and you can leave.
They actually increased sales by 38% that day.
Because what people do… they got the free one… they loved it… and they bought more. Think about that – just giving away something for free.
So when it comes to…
Giving Away Stuff For Free To Get Customers
…what do you have to think about? What process do you have to go through?
Well for me, I’m thinking; who is my ideal customer? Who do I want to attract in the first place?
If I have a dog training business, would it make sense to give away cat treats? No, right? It’s not going to serve my business. I have to think about, who is the ideal customer that I need to attract? What items would appeal to them?
Coming back to the dog training example. If I’ve got a dog training business, what is going to actually appeal to the right person that I can sell to?
Well, I want people that own dogs, right? Perhaps a particular breed of dog. I’ve got an English Bulldog. So for me, if I was going to be given something for free, I’d want it to be relative to my dog – that’s going to attract me.
Now if you’re a business owner, with additional things to sell me to do with English bulldogs, I’m now a prime customer for your business. And you attracted me to you, by giving me something for free in relation to that.
How can we offer it to them? I use websites, okay? And how can we get it in front of them. This is obviously when we talk about doing advertising.
We have so many platforms now, to get our message in front of people, that it has actually become very…
Very Easy To Get The Right Message In Front Of The Right People
Now I know not everybody is familiar with online business/internet e-commerce. So I just want to show you a few examples that you will have seen in your everyday life. Because what I’m saying to you here today isn’t necessarily revolutionary and new… It has been used for decades and decades.
But along the way somehow, as entrepreneurs, we like to over-complicate things, and we forget the simple matters. Because when something works, we tend to think, “Well that seems too easy. Let me find a harder way. Let me over-complicate this.”
So just to show you… How many times have you had leaflets posted through your door, or you found them in stores, or you’ve been in restaurants and you find this coupon or voucher – it’s like, “Free dessert!”
Now, what d’you have to do to claim the free dessert? Well, you probably have to go in and buy a main meal. But I’ve attracted you. You could have two options, of two restaurants. One – you’ve got a free dessert… so where am I going to go?
They’re both near each other, but I can redeem this voucher at this one for a free dessert. I might prefer the food over there… but you know what? I can save two pounds on the free dessert over here. So I’m gonna go here. And it’s crazy – as human beings… we actually almost can’t resist something that’s free.
I had to laugh, just recently… I was in the newsagents buying some some breakfast. I was picking up some bacon and various things, and the lady behind the counter, just as I was leaving, said, “Oh wait. Would you like a magazine? We had an over-delivery so we’ve got some free ones.”
“Yeah, go on then.”
It Was Women’s Magazine, But I Couldn’t Resist
And I still went home and read it. Alright? We love free stuff.
Chiropractors… If you happen to be a chiropractor, get someone through your door by offering them something for free. And just think… I’m showing you two examples here – restaurants and chiropractors. But this is universally applicable, I believe, to any type of business.
What can you offer for free, to get your ideal customer to take that first step through the door? Whether that door is a physical brick-and-mortar store, or it’s a website e-commerce… what can you offer for free, to get that person through the door?
Now as I said, when I first saw that thing at the cheese stall in Borough Market, my brain started thinking how could I possibly apply this to online marketing, to e-commerce.
It’s very popular and very common to give away digital downloadable products, like a free video, or white paper, or report – something you download. But the perceived value of something digital, compared to physical… it doesn’t quite match up.
A physical, tangible item that you receive, carries a much higher value. And that’s what I saw with the cheese. This wasn’t just some make-believe picture of cheese, like, “Oh come and just look at it.” This was a physical thing – try the cheese, buy the cheese.
And so, this is what I’ve been doing in my company for the last two or three years. And…
It’s Completely Changed Everything… And I Mean Everything!
I’ve gone from, for example, giving away a free video, or a free downloadable report, or white paper online… to taking those same things, and having them put on to USB sticks. And now we ship those out – we give those away for free…
Now incidentally, because you’re probably thinking, “But there has to be a cost to that.” Well there is. But what we actually do we give the items away for free – and here’s the clever part of this – we charge for the postage. We charge for the shipping.
So, we don’t necessarily lose money. Because, if you recall, the three ways to grow a business…
One: Get more customers. That’s what we’re able to do, at a very high volume.
Two: Sell more to those customers at the point of sale. So when people order these free things, and they give us that small nominal amount for the shipping – the postage costs.
Three: We then are able to offer them more things.
So this is just a very effective way to attract our perfect customers, our ideal market, into the business. So that we can then further serve them, further add value.
Here’s another one. I hope you don’t find this too hard to believe, but I am involved in the makeup and beauty market.
So what do we do? We give away free makeup brushes. Do you think the people that request, and that we send out these free makeup brushes to… Do you think they’re interested in buying additional makeup and beauty products? Yes or no?… Absolutely!!
And we have a subscription box service, so they receive stuff on a monthly basis. We’re growing that – adding hundreds and hundreds of people, just by giving away free stuff. Here’s another example.
A Friend Of Mine… He Gives Away Free Books
This is one of his books.
He’s given away just under I think, about hundred thousand books right now. He’s not what you would class as an author. He owns a software service – an internet-based website builder.
The company was launched three years ago. And by giving away free books, they are approaching I believe 60,000 paying members, with a valuation approaching 1 billion dollars.
They launched three years ago – give away free books. People that get the free book, they’re interested in building websites. He offers them the membership to the website builder, just by giving away a free book.
So Why Does ‘Free’ Work Then?
Let’s just be very, very clear on this. It gets a great product that you own, or have sourced, into the hands of those that want and need it… without the risk – without having to sell them something.
It’s like. “You don’t know me. You don’t know my company. You don’t know the value that I can bring to you… So I want to give that opportunity, of creating that relationship with you, without asking you to take a risk on me.”
“Have a free thing… if you like it, then I’m sure we’ll do business together again in the future.” Some won’t, but some will. And what you’ll find is… as long as you’re centred on serving, and giving value in your business… more will, than won’t.
It establishes trust, gets new customers through that front door. Like the free dessert, the free chiropractic offer.
Get someone to take that step through the door. And it establishes a benchmark to do future business. Because if I give you something great that you enjoy, do you think you’ll pay a little more attention to me in future? The answer’s ‘yes’.
So guys, this is the four-letter word that can grow any business. And I want you to look in all areas of business life going forwards… how you can incorporate this as much as possible.
Because nothing increases response rates like the word, ‘free’.
So thank you very much. This is Dean Holland. Thank you!”
Check in with Dean again in “How To Achieve Your Goals And Move Your Business Forward” – the next instalment of The Drive.
3 thoughts on “How To Grow Your Business: The 4 Letter Word That Grows Any Business”
Great advice. I’m sure it works. I’m thinking of how to apply it as an author to my clients readers.
Obviously giving away a book, the first in a series, would work well, and then charging for the following books. However even if a book is free, getting it out there for readers to see is not an easy task.
Thanks for stopping by and leaving a comment. Yes, I imagine it’ll take creative and clever planning to implement this model for a fiction book series, which may not have the ability to escalate customers to higher ticket premium offers to mitigate costs and deliver larger profits. The costs of developing and marketing a free book sales funnel, as well as the costs of printing and shipping the book, of course need to be weighed against a realistic revenue projection. However, if profitable, it may be a way for authors to get their works in front of a market which they may otherwise miss. You might want to watch The Perfect Offer video presentation, which gives more insights into how this model can be used in other businesses.