My No-Risk Business Model for This Economy

This is the time of year when you are finishing up, actively involved with, or at least thinking about your business plans for next year. 

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If you have been in business for a while, you know with certainty that business in the future will be dramatically different as a result of at least two influences that are reshaping buying behavior: the economy and the sensational growth of the social media networks.  The economy you know about.  If you have been asleep for a while, one measure of social media's influence is Facebook just celebrated 350 million user, which is over 200 million more users than this time last year.  

The economy has taught many of us to do with less, as we have discovered we really didn't need much of the stuff that was cluttering up our lives.  That habit is almost sure to prevail.  Then there is the habit that became a sport – getting a better deal.  Not everyone has been struggling, but it has become fun to search and wrangle for a better deal – better quality, a lower price or at least more value for the same price, and new and different options that only come your way when you are able to take advantage of them.

My belief is flexibility and choice are destined to be strong buying influences this coming year, and probably well beyond.  This creates a major problem for a specific business model that I'll refer to as The Club Model.  If you have been a member of a health club or a golf club, owned a cell phone or subscribed to a magazine, then you know the premise of the model: Get customers and keep them for as long as possible, preferably a lifetime.  Wasn't this partly the model of apparel and automakers?   Their brand was the club. 

The problem with the club is it is easy to get locked in, which of course is the idea.  Oh, but c'mon, you are a member of the club, so don't you want your club to do well?  Well, um…I guess so.  But what if you wish to try another club for a while?  Most club models are designed to keep you from doing exactly that. Cell phone companies love this model. You typically have to be a member of their club for two years, or you have to pay dearly for the flexibility of a shorter, one-year commitment, which in this economy still feels like a lifetime!

The model you should consider, and one that I am adapting to my speaking and consulting, is increasingly common in this Web based society.  It's the No Risk Model.  And coming out of a tough economy, this is exactly what a lot of your customers are looking for. 

Please understand I operated a contracting business for 20 years and I completely understand the need for annual contracts.  Nevertheless, I'm not in charge of this economy and neither are you, so maybe you should give this some thought.  Find the middle ground for your company and your customers.

Most of the social media services you and I use are free.  Since social media happens to be my business, I pay for a number of services too, and they all offer a no-risk trial with a low-risk payment plan that allows you to opt out at any time.  And that is what makes it easy to opt in in the first place!

Some of my favorites examples are Batchbook.com, Shoeboxed.com, and Freshbooks.com, which are all Web based services.  Batchbook is a customer relationships manager (CRM), Shoeboxed is a business card and receipt organization service, and Freshbooks is a time-tracking and invoicing service. These are great services for the entrepreneur who is usually on-the-go.

I tried all of these services out for little or no investment.  The "pay-as-you-go" method is easy on my budget and easy to budget for.  Though the best part is their model requires them to get better and offer more value to keep me as a customer.  I like that!  And let me tell you, the better they get, the more I sing their praises – as I am here. 

And to paraphrase Billy Mays – That's not all!  They listen to me.  I can get a live person on the phone, and I know for a fact they are listening to customers like me because they have made the improvements many of us have suggested.  This tells me they are looking down the road to what business is evolving to. 

And this leads me to my three requirements for a successful business model in this economy:

Vision – Always be looking ahead, because your customers are.

Voice – Listen to your customers.  Give them a voice and they will be your biggest fans.

Value – When you stop offering more, your customers start thinking about opting out.

Is your business model closer to the Club or the No-Risk Model? 

Your answer will help you get ready for the economic recovery.  When that happens, there will be a lot of people ready to make a change.  These people will remember the clubs that locked them up, and that's an opportunity for you. 

If a club is typically exclusive, then inclusiveness is the future.

Let 'em all in.  Make it easy.  Some may leave.  That's o.k. If you are good enough, they'll be back.  Let that door swing both ways.  No risk in that.

Here's my no-risk offer:  Leave a comment and I'll respond.  Guaranteed!

Photo Credit: BrianButko 

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