What comes to mind when you think about business transactions? Monetary transactions are a common first thought. You exchange money for a product or service. Simple.
There are so many other transactional situations in business we do subconsciously that impact business growth and success. We are constantly bartering with each other to achieve business goals.
Tetra Prime Consulting CEO, Aaron Garner, discusses in this article the side of the barter system that matters most to your customers: the reward. He explains how you can use bartering situations to better understand and serve your target customers. By the end, you’ll also know how to choose appropriate barter transactions that feel valuable for your customers.
What is Bartering?
As a recap from our previous article on the barter system, bartering is when you exchange something with another person for something else. One person gives up something to receive something in return. The part of giving something up is called a sacrifice while receiving something is called a reward. Both are necessary functions of a barter system, and every business uses a series of exchanges to serve customers.
The capital exchange can be thought of in four categories. Physical capital is physical items being exchanged. Human capital is knowledge, skills, or labor. Social capital is relationships with other people. Finally, the last capital exchange is time. You can use any of these currencies as a reward in a barter exchange.
Here are some business examples:
- A customer submits their email (sacrifice) for a free online course (reward).
- The end of the free course offers a strategy call (reward) for a fee (sacrifice).
- The strategy call goes well, so the customer wants to continue working with the company (reward) on a monthly retainer (sacrifice).
- After a few months, the company asks for a testimonial or referral (sacrifice) in exchange for a gift card (reward). The testimonial or referral could lead to another client.
As you can see, the barter exchange incrementally increases as the relationship develops. Bartering has been used successfully by businesses of all sizes. You don’t need a large marketing budget to implement the barter system. All it takes is a little strategy.
Value Stacking Rewards
Now, this article focuses specifically on the reward side of a barter exchange. You can read about the sacrifice side of the exchange here.
Your reward needs to feel worth the sacrifice to the customer. As an example, you won’t have as much success asking customers to complete a survey without a reward as you would if you offered something in return for their time. The reward is a critical part of the barter system.
That’s where value stacking comes into play. This is the idea of making something so valuable in the eyes of customers that the sacrifice feels easy to make. It’s a gift or bonus you give your customers for working with you.
Aaron shares an example: “Tetra Prime offers marketing services. So we do things on the contract, but we also try to give more than that. The things we do that are above and beyond are a gift. So you’re like, ‘Wow, that’s really cool. That’s impressive.’ That’s the gift.”
Offering a gift, freebie, or bonus is an excellent way to value-stack your barter. If your business is meeting and exceeding the needs of your customers, no other competition compares. You’ve won your customers over with how valuable your offer has become. Although this is a monetary exchange, your customer feels your services are worth more than what they’re paying.
How to Use the Bartering System in Your Business
Delivering service above client expectations is something you can incorporate into your brand, but you need to understand your customer. Offering value-stacked rewards that are unimportant to your customers won’t make you seem more valuable; you’re giving them something they don’t want. As you learn more about your customers, take note of their needs and what they value. You can implement these into your value-stacked reward.
Here are some examples of value-stacking:
- Excellent communication about ongoing tasks.
- Performing outstanding market research.
- Creatively leveraging capital to overcome challenges.
- Strategizing statistically valid tests, sharing results with the customer, and implementing findings.
Your reward to a customer doesn’t have to be extra services. You don’t have to push your contract and boundaries to make your customer feel valued. Think about some ways your company can add value to your customers. Consider your team’s strengths and utilize them to offer a reward to your customer. Your company’s brand is developed based on your strengths. You become remarkable in an on-brand way by choosing how you serve your customers. The gift that you give is not only connected to your strength but also what you become known for!
Aaron shares, “It’s critical that you have enough curiosity and empathy to have an accurate representation of your own strengths and your team’s strengths, but also what’s important to the people that you serve. If you understand yourself and the people you serve, and you can find a connection between those two, then I think you should go all in and be as good as you possibly can. You’re probably going to be pretty hard to beat. If you’re operating within your strengths, and they love what you do, not many people will want to change for no reason.”
Focusing on your team’s strengths will attract the right customers. They will sign with you because they’re happy with the original barter (the contract: exchange of money for services). They will stay because they’re happy with your team’s performance (extra reward/value).
Determining the Reward
As a business owner, you can use the barter system to better understand your customers. You can learn what they are willing to sacrifice for the reward you are offering. After looking at analytics, you may come to find your reward isn’t enough for the sacrifice you’re asking from the customer.
So how do you determine the appropriate reward for the sacrifice you’re asking for? This is Aaron’s advice: “Nobody can feel like they’re getting taken advantage of in an exchange, and if everyone feels like it’s a great deal, then it’s a good deal.”
Bartering is a long-term game. A customer seeing your value doesn’t happen overnight. It takes time to earn trust and recognition, but it will be worth it. You could earn additional business opportunities from referrals, retain customers, receive a glowing testimonial, and maintain stable income for your team.
Barter transactions happen daily without us even realizing it. How can you use something that people are already used to to benefit your business? We encourage you to consider how you can use the barter system to attract target clients and keep them for years to come.
If you have any questions about the barter system or other marketing strategies Tetra Prime uses, contact us today. We’d be happy to chat with you about your current situation and how you can improve to better serve your customers.