99.5 % of the time your customers are not ready to buy from you. Marketing during this window is generally unproductive. In this video, learn how to make the most of a meager marketing budget by discovering how to identify customers that are ready to buy using the Viable Customer Model.
Viable Customer Model Video Transcript (Edited for clarity)
I’d like to share with you a comment that often comes up during my counseling meetings. “Steve, I don’t have a big marketing budget how best can I utilize the small amount of money I have to make the most out of it” What usually share is what I call the customer viability model.
Let me try to explain the viable customer model with an example. Let’s use an example of a car purchase. I personally have maybe five years and perhaps more like ten years between car purchases. When such a purchase happens, I probably have driven my vehicle until the wheels have fallen off or something along that line. If that was the case, I probably replace my vehicle in roughly about a week or so.
Let’s just say I replace my vehicles once every five years. If I was only going to replace my vehicles once every five years and it only took me just one week to make a decision and replace that particular vehicle let’s do some math really quickly. Let’s assume there are just 50 weeks in a year, times five years that’s 250 weeks between vehicle replacements. I’m viable to buy a vehicle approximately just one week out of every 250 weeks. Said another way I’m not viable essentially 249 out of 250 weeks. That’s a really bad way to think about marketing.
If I’m going to go ahead and use what we call interruption marketing and the spray-and-pray approach what most dealers do, what I would do is blitz out my ad messages every day to buy a car for me. Very expensive. So I tell people instead, the best and most efficient way of marketing when you have a small budget is to use the customer viability model.
So what I’d like you to think about it is what if I was to get in an accident tomorrow–which now would make me viable to replacing my vehicle–essentially there would be a few people that would know that I’m viable.
For example, the tow truck driver who would pick up my car on the side of the road. Perhaps the police officer who showed up there at the scene if it was an accident. I might call my insurance company. I’d probably have the vehicle towed to either a body shop if it was in a car accident or perhaps if it just broke down on the side of the road to some type of a garage to see if they could go ahead and fix it.
So here are five different people that know that in fact, I happen to be in that viable one-week window where I might actually be considering purchasing another vehicle. So, I tell people, put together a value proposition for each one of those individuals.
For example, the tow truck driver may do five tows a day, maybe making $30 personally per tow. That is maybe $150 during a full day of towing vehicles and working outside often in inclement weather.
I might recommend in this case that you go ahead and use something like a customized business card. I’d add something like a small custom QR code with that particular tow truck driver’s information on it. For essentially ten dollars at Vistaprint, you can go ahead and make five hundred cards. Give them to all the tow truck drivers in town each one of them with their own set of cards with their own unique QR code. When they go ahead and tow somebody you agree to pay them $100 for every card you get at your car dealership.
When they might make $150 all day for towing five people and since they know the client is in the market to buy a new car, they would probably press that business card in the hand of everybody they towed. They would go ahead and tell everyone about how great I was knowing that if one of those cards came back to me I would send them a check for $100. That’s cheap customer acquisition cost for me if in fact I’m a car dealer and it’s probably the most efficient way that I can go ahead and get new clients. Far better than paying for advertising every day.
Now if I want to say that same thing to my insurance broker, he probably wouldn’t be influenced by the $100. But if you think about that particular situation, if I just wrecked my vehicle in all likelihood, I don’t really have too many interactions with my insurance company, but I think that if I did have a bad interaction, it would probably be when you made your claim. So my point being is that my value proposition for those insurance people would be, why don’t I go ahead and make you a sponsor of my inventory page so as people look at my inventory of cars they are going to see that it’s sponsored by Joe Blow insurance company. At which point they just had a bad experience with their last insurance company and we might just be exposing them at the same time they are viable for replacing their insurance carrier thereby extending that viable customer model now to my insurance guy.
So, I tell people to find your tow truck driver find your insurance person in your particular sale scenario. Put together a value proposition that makes sense for each and every one of those people and go ahead and use the viable customer model rather than use the spray-and-pray kind of method of advertising.
