Selling to strangers, family, or friends - which is the secret to success?
Published on: July 04, 2022
Last updated: July 23, 2024 Read in fullscreen view
Last updated: July 23, 2024 Read in fullscreen view
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Message of Jack Ma - a Chinese business magnate, investor and philanthropist
Jack Ma once said:
"When selling to close friends and family, no matter how much you're selling to them, they will always feel you're earning their money. No matter how cheap you sell to them, they still wouldn't appreciate it."
There will always be people who do not care about your costs, time and effort. They will let other people cheat them or allow others to earn, rather than supporting someone they know. Because in their heart they will always be thinking, "How much did he earn from me?" instead of "How much did he SAVE/MAKE for me?". This is a classic example of a poor person's mentality!
Benefits and limitations of selling to your friends and family
Those closest to you or the lowest hanging fruit are the first people you should trust when beginning a business to test out a product and pricing. However, what should you bear in mind if you use this as your initial group of customers?
Benefits
- Starting a business can be challenging, but boosting confidence is crucial. Encouraging customers, especially friends and family, to enthusiastically follow and purchase your products can help boost your confidence, even during the early stages of your business.
- Family and friends should be able to give you constructive criticism without breaking your spirit. They should be invested in your individual development and may not break your business if they don't want to interfere with your finances.
- Maintaining cash flow is essential to a startup company's survival. Due to their propensity to patronize small businesses rather than larger ones, friends and family become great sources for recurring purchases.
Limitations
- If your relatives and friends seem genuinely excited about your new product or service, please don't be misled by this. All of it is the result of inflated expectations and the general perception of those who do not know you well. You will be really disappointed to learn that all of the enthusiasm was based on a personal connection and an investment in you, the entrepreneur.
- The misleading feedback loop might have a detrimental effect on the company by upholding a friend's opinion that a handmade spice blend is delicious, for instance. This false feedback loop may cause the business to decline which makes it difficult for the entrepreneur to address the true problems.
- You might turn your family into guinea pigs for new products, leaving family and friends with houses full of useless crap. Imagine a friend saying, "Well, this widget that Joe got me is a hunk of shit, but I can't say that to him, he's put his heart and soul into getting this business going, I'll just tell him it's good so I don't hurt his feelings.". it ends up sitting in a drawer for fear of hurting your feelings by throwing it out. This is an example of how family or friendly bias can be put forward to a product.
Strangers Are Better Than Friends - True or False?
Jack Ma on Sales: "When doing Sales, the first people who will trust you will be Strangers. Friends will be shielding against you, fair-weather friends will distance themselves from you. Your family will look down upon you."
We frequently hear complaints about selling to your closest friends and family. For instance, the following are some typical ideas we hear:
- You feel as though you must provide them with a special discount of some kind.
- They anticipate that you will provide them with priority service.
- You don't want to be held responsible for selling them something that didn't meet their needs because you believe your product isn't good enough.
So how did the rich people become rich? One of the main reasons is because they are willing to SUPPORT their business associates, taking care of one another's interest. They eventually regain more.
Your friends that BELIEVE in you, in turn will support you. Thus, the circle of wealth continues to grow and grow!
The hard reality is that family and friends often feel like you owe them, which is why they are comfortable taking things from your business on credit and not bothering to pay up.
You will realise that you are successful, when you start paying the bills for every get-together dinner, entertainment expenses etc. Everyone else is present except the Strangers.
As a business owner, it is crucial to maintain a strong relationship with family and friends who may not value your business or take it seriously. Family and friends can be supportive in the beginning but may not take your business seriously.
To maintain a successful business, it's crucial to expand beyond your network and develop a strategy for attracting new customers through a customer journey.
Identify low-hanging fruit customers for your service or product, targeting them without specifying their specifics. Focus on marketing to a larger audience and not overlook initial engagement stages.
People have more value for things they pay for, so offering discounts or offering a special payment plan can help them feel more accountable. This strategy can lead to quicker payments or even encourage them to leave your market to find someone else to buy the product. When they enjoy the product, they will likely return and pay full price without argument.
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