In an age where, according to the U.S. Bureau of Labor Statistics, 70 percent of all startups fail within two to five years and only 25 percent of new businesses last 15 years or longer, how can you maximize your chances of out-pacing the competition?
The latest gas station model is a great business case study, as they have mastered the art of serving their clients far beyond the gas pump.
Get People in the Door at Any Cost
Did you know that gas stations make very little to almost no profit by selling gas? With overhead expenses, freight, credit card fees and more rolled into the price of pumping a gallon of gas, the station could be making as little as two cents of profit per gallon, sometimes even less. That being the case, even selling 5,000 gallons per day, that’s a meager net daily profit of $100.
So why bother? And how do some gas stations not only stay in business for decades but thrive based on making $100 per day? The answer is: They don’t.
The truth is, the most successful gas stations use gas simply as a mechanism to get people in the door. And once they’re in the door, that’s where the real business takes place. As one of my mentors once said, the expense is in the front end, the profit is in the back end.
The successful gas station model offers an unprecedented number of relevant and peripheral services to all of their clients, ranging from the traditional snack and beverage options to full, custom made-to-order breakfast and hot sandwiches station, freshly baked pizza, self-serve frozen yogurt bar, and more — even wi-fi dining areas where customers can relax and enjoy their meal before heading back out on the road.
So, copy this model and do what it takes to get people in the door, even if it’s expensive. Because once they’re in the door, they’re more likely to spend more money on more relevant, peripheral services — even at premium rates.
It’s Not All About Price!
Surprisingly to many, it’s almost never all about the price. While price can be a factor, you can use the gas station principle to illustrate the bigger picture.
Considering that in most cities you can find gas on almost any corner, do you really drive across town to save a few cents per gallon? Maybe on occasion. And there are always going to be extreme bargain shoppers out there, but for most people, they won’t drive across town to save three cents per gallon unless there are other compelling reasons for their decision.
For example, maybe you’re hungry and a freshly made-to-order sub would hit the spot. And, oh yeah, you have that cookout this weekend and could use a few bags of ice. And that one gas station is the only one that freshly brews the coffee you like. All of these things considered, you would most certainly drive across town to a particular gas station because you know they offer those services and you can benefit from them conveniently.
Applying this concept to your studio, if the only reason clients come to you is because you’re the cheapest they can find, then they don’t truly value your services and/or you’re not offering them enough peripheral benefits for them to truly value your business. Success and longevity boils down to how much better and in how many more ways you serve your clients than the competition.
If all you do is provide animation, consider new ways your animation services could be utilized by your clients. For example, if you produce animation that’s used only for a client’s website, what about developing a comprehensive package where the animation could be used on social media, through email blasts, on internet ads, and more — and then offer to take care of that for them for an additional fee? Suddenly, your one-shot, one-use service has increased exponentially in potential benefit and client use-value.
Make it so your clients have no need to go to anyone else for anything else peripheral to the services you offer. If you have already built trust with your clients, they will appreciate you letting them know you can help them in more ways than one. And if you promote these services from the get-go, you will have a greater chance of landing more new clients due to a wider range of benefits that clients can reap from engaging in business with you.
Martin Grebing is the president of Funnybone Animation Studios. He can be reached at funnyboneanimation.com.
