Ever hear of a product called “Icy Hot?” It’s basically an extremely popular (not to mention) effective topical heat rub, that’s used primarily to get rather fast relief from the likes of backaches, leg cramps and muscle strains etc.
Long before the major Pharmaceuticals carried it, some serious marketing strategies and tactics were rolled to help build (both) it’s loyal following and consistent demand.
And part of that story is the overall main focus of this particular post, because it illustrates an incredibly powerful marketing lesson. The main one being, that far too often, otherwise savvy entrepreneurs often develop short sided tunnel vision, by focusing too much on the tree, to the point that they can’t see the forest!
An Extremely Powerful Marketing Lesson That Helps You Separate The Forest From The Trees!
Although this illustration may seem brain dead simple and obvious now! Prior to this initial and subsequent marketing strategies being implemented. They weren’t so obvious!
In order to expand (both) their customer base and generate interest among the major retailers at the time. The owners of Icy Hot came up with some brilliant and innovative marketing tactics and strategies that ultimately led to them being purchased by a major Pharmaceutical company and eventually being carried by the major pharmaceutical retailers as well.
In a nutshell, here’s one of the first major marketing strategies they implemented, that quite literally exploded their initial growth! They started closely monitoring their initial and repeat sales numbers, and here’s what they quickly discovered.
On average their best customers would buy at least two more bottles (for a total of three), after their initial purchase. And we’re talking the (basically) the non athletic type! So they quickly reasoned that rather than continuously blowing all their hard earned money money on hit & miss conventional advertising mediums such as direct mail campaigns.
Outrageously expensive newspaper,radio and magazine ads etc.
Instead they would strategically approach local, national and regional newspaper & magazine publishers,and radio stations etc. And skillfully negotiate the following, incredibly lucrative offers.
Anytime any of those mediums had unsold ad space and or unsold radio ad time etc. They could run Icy Hot’s ads, and keep 70% of that first gross sale! And they’d use the remaining 30%, in the following manner.
Twenty percent would go to recoup their loss of traditional ad revenue. And the remaining ten percent would go to order fulfillment. Now obviously, not all of these entities (initially) went for this offer! However, the ones that did, allowed Icy Hot to quickly (within) three short years or so, to grow into a highly successful eight figure annual gross revenue business!
Then once major Pharmaceuticals took notice. They could now basically approach the major direct mail fulfillment houses and make them the same offer! They got to keep X% of that first sale and Icy Hot net whatever repeat sales came their way!
Because it was obvious they were more than thrilled to literally break even on the front end, while acquiring a reliable future repeat customer! And capture their all important contact info, while simultaneously building an enormous and extremely valuable buyers list!
Music to any savvy entrepreneurs ears! Would you not agree? So what’s the moral of this story you ask? Sometimes, it’s best to see past that first sale ( aka the tree!) And instead focus on the entire forest (aka) the extremely lucrative long term back end! Can you say kaching!
Please list at least two simple spin off concepts (in the comments section below) that you can apply to your business, product or service in the next 30 days or less!
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