GIFTS

Gifts are free products that you give to the world expecting nothing in return. You don't ask for contact details, you don't ask for money, you don't ask for anything. They are thoughtful, valuable and enticing in their own right and they show just how brilliant your business is.

A great gift is delightful if it's given to the right person at the right time. It needs to open people up to a whole new world of value that your business offers.

Your gift should entice people to want to know more about what you do and what value you offer.

Big companies like Rolex, Qantas, Credit Suisse and Kia give us the tennis, the golf, yacht races and other sporting events as a gift. They pay for these events to run and you don't have to be a customer to enjoy them.

Apple gives you iTunes for free. Google gives you browsers, calendars, maps, apps and more for free.

In a small business, a gift can be online videos, a book, a webinar, a downloadable checklist or a sample pack.

The key is that you give it freely and ask nothing back from the person who receives it.

PFP

This is a product for people who want to try your business out without committing too much money or time. This type of product is designed to offer a quick win or a first-hand experience. It's a sample of things to come, a test drive or a first step in the right direction.

A good law firm will offer a free first consultation, a car dealership might invite you to a special event, a small business might get you to buy a home study kit or attend a low-cost seminar.

PFP need to have a low cost. Either a small amount of money, some focused time or sharing of contact details.

The PFP is designed to ignite the commercial relationship between your business and your ideal customer.

It should warm people up to doing business with you, share some of your philosophy, demonstrate your value and do it all quickly and cheaply.

Apple have the iPod. KPMG host thought-leadership events. Google offer an Adwords voucher.

Small businesses can run events, host webinars, create memberships, offer downloads or have books or online courses available as a low-cost first step to doing business.

CORE OFFERING

These are the products (or services) you are famous for.

For BMW it's cars. KPMG's core offering is auditing. Singapore Airlines are known for long-haul flights.

With these products you can deliver a full and remarkable solution to what people want. These products seriously solve problems.

They are your main focus and your customers and clients can't stop talking about them. These products are priced to be profitable. It's OK to lose small amounts of money on gifts and PFP, but not on your core business.

You've giving people a taste of what you can do with your PFP, but now it's time to be paid for your fair value when someone wants to access your core business.

You must create a special methodology that makes your core offering remarkable. You need to push your team to be the best in your market for this type of product.

It's important that you develop enticing brochures and websites for your core product. You should raise your profile as the leader in your industry for your core product.

The key is to create a full and remarkable solution to your ideal customer's problem. You want your core product to turn people into evangelists for your brand.

Typically, the core business must cost more than £1000 per client per year. Every time a client says yes to doing business with your small business, it must generate an order of over a thousand pounds within 12 months. It's hard to run a profitable business on small sales, especially if you want to hire employees. If your core product is £100, you would have to sell hundreds of them per year to cover the cost of just one employee. It's OK to have a small unit cost, but the minimum order size should aim to be £1000+ per year. If not, I would say it's a PFP not a core business sale.

I once consulted to a coffee shop owner who said ‘our core product is cups of coffee – we can't sell those for £1000!’ I highlighted to her that a regular customer buys 200 cups a year at £2.50 per cup (£500 per year) and that the shared offices in the area employ an average of eight people each. If each office has four regular coffee drinkers, that would equate to £2000 per year per office. She realised that her core product wasn't cups of coffee, it was to become the preferred coffee spot of local offices all year round. As soon as her staff focused on this mission, they created deals, promotions and campaigns to engage with the local small businesses. They learned people's names and made them feel special by remembering how they take their coffee.

PFC

Your core product was so delightful that your clients want to know what comes next. The PFC is a product you mostly sell to people who've already bought your core business, to continue the journey.

BMW are known for their cars but they make a lot of money in finance and insurance (the logical next step after you’ve just bought a car). Then they service your vehicle and eventually they handle the sale of your older car as they upgrade you to their new model.

Your PFC should be highly profitable. Selling to existing clients is highly profitable because the cost of winning the relationship has already been covered. The additional cost of adding a PFC shouldn't be excessive, and yet it offers an entire new range for your clients.

Often a core offering takes the form of a package and the PFC is a retainer, subscription or recurring-revenue contract. Recurring-revenue products and services are notorious for creating a J-curve when that is all your business does, however when accompanied by a core offering package the business doesn't experience the savage drawdown into the J-curve.

Your PFC creates a long-term underpinning of your business. As the number of subscribers or retained clients begins to mount up, you'll hit a critical mass of profitable monthly revenue that can eclipse your core business. With this fourth product you should do well in business for many years to come.

LEAD-CAPTURE PROCESS

First, you need to capture people's details. Prospective clients need to be able to signal to you that they are interested in doing business by registering their contact details with you.

This could be on your website (e.g. fill in your details and then download our research paper). It could also be a good old-fashioned fishbowl on the counter for people to put their business card in. It could be a form that gets filled in by your staff. It could be a ‘Facebook Connect’ button that automatically connects your business page to your client. However you structure it, capturing people's contact details is a key part of your business and you should have several ways to collect them.

A lot of people who receive your gift product will want to engage with you – make sure they can.

Start to become more aware of how other companies capture your details. You might be surprised to discover that you are handing over your details several times per week in various forms, and your business could learn from these interactions. Additionally, research the people in your industry and find out who is capturing details in a professional and brand-affirming way and who is doing it badly. Take these lead-capturing processes and put them into your business.

SALES CONVERSATIONS

The next piece of glue is sales. It's an essential part of every business, yet many small business owners often avoid it.

Secretly, many small business owners have a negative association with selling and wish they could simply do extra marketing, extra servicing or extra networking rather than having to have the sales conversation.

Unfortunately, this is a fantasy. Rolex, Ferrari, Google, HSBC and Apple all invest in sales training so their staff know how to have a structured sales conversation with a prospective buyer.

If the world's biggest brands, with the world's hottest products, need to have sales conversations, then so does every small business.

The good news is, if someone has had a good experience with your gift and PFP, the sales conversation will be an enjoyable experience. Gifts and PFP are brilliant for warming people up, to be pre-sold before they meet you for a sales chat.

In many cases, a person who has experienced your PFP will already suspect that they want to do business with you but they just need to clarify some finer points and sort out the particulars.

I would go so far as to say that you (or your sales people) should avoid talking to people unless they have experienced a PFP. If someone calls out of the blue and wants to talk business, be sure to send them the gift or PFP before you meet with them.

I recommend that you become more keenly interested in how sales conversations are structured. Go and put yourself in situations where you can be sold to, find out what works for you as a buyer and what doesn't. See if you can create the ultimate ‘buying experience’ out of your sales conversations. When your sales conversations happen regularly and naturally, you will be able to invest more money into lead generation because you will have the confidence to convert interest into income.

SERVICING PROCESS

The final piece of glue is service. Your clients need you to look after them better than you said you would.

This means that you must strategically undersell your core product. You must keep some aces up your sleeve and resist the temptation to tell prospects about everything you will do for them once they are a client.

If you tell your prospects that you take your clients away each year on a river cruise, they will expect it. When the invite arrives they will think ‘He did what he said he was going to do’ rather than ‘Wow, that was above my expectations’.

If, for some reason, you don't do the river cruise, your clients would feel they missed out on something you said you would do.

Conversely, if you are disciplined and you never mentioned the river cruise, when the invite arrives your client will likely feel special because you've done something above and beyond their expectations.

Even after you've delivered value to your clients, they will want to know that they are still valued and you're still available to them.

You must build into your business special ways to look after your existing clients, long after they have bought from you.

You can put them into an online club membership or forum, you can invite them to ‘clients only’ events, you can send them updates. Make sure it's delightful though.

If you send out a half-hearted newsletter once a month it will have the opposite effect on your clients; rather than being delighted by you, they will be annoyed.

If people are delighted by your servicing, they will want to buy your PFC. If you fail to service your existing clients, no matter how good your core product is, it's unlikely you will get an uptake on your next offering.

Think of all the businesses you have bought from in the last year or two. See if you can think of who has looked after you as a client above and beyond your expectations.

Can you recall special events, little surprises or unexpected value that showed up after you were already a client? If not, can you imagine what you would have loved them to do? When you have some ideas, design some surprises for your existing clients that leave them feeling totally taken care of.

WHAT HAPPENS WHEN YOU DON'T HAVE A PRODUCT ECOSYSTEM?

It takes time to create an ATM. You put many hours into strategy, design and production in order to get it right.

Failing to do so, however, shouldn't be an option.

Many small business people want their business to be easy and simple, so they just don't bother to put together an ATM.

With too few products, they make the error of pushing their core business too soon. They expect people who hardly know them to open their wallet and start spending.

When this doesn't happen, the business owner makes the mistake of lowering the price of the core business to a level that isn't profitable and they begin to resent their business and their clients.

If they don't lower the price, too few potential customers make the leap. They might be charging a fair price but simply don't have enough clients to run the business.

The issue isn't the price of the core product; the issue is that the business has not created a relationship, something the gift and PFP are designed to do.

Even if the business has these first three products it will likely be profitable. However, without the PFC, the business is probably doing barely half the profit it is capable of.

An ATM covers your bases. It has products that build relationships and products that deliver value. It gets you out to market and it makes you money.

The key is taking time to carefully plan and produce the products you will have in your ATM. If you simply give up, you're destined to stay small and struggle to make money from your venture.