110,000. That’s how many points it takes to earn a Companion Pass on Southwest Airlines. With that pass, a person you name can fly with you for free. A husband, a friend. Your second wife.
You receive those points by flying 50 round trip flights in a year, purchasing premium Business Select tickets (which is their most expensive ticket — roughly 10 round trip of those will get you to Companion Pass status —or using their credit cards for purchases (1 point for each dollar spent, or 2 points for purchases of Southwest tickets and other partners.)
I have a companion pass. I’ve had the pass for the past five years. I spend a lot of money on Southwest. That perk is one major reason why.
Let’s take another of my most used brands— Starwood Hotels. To achieve their highest status, Lifetime Platinum, you have to be platinum for ten years, or 500 (eligible) nights. When you reach that milestone, you’re automatically upgraded to the largest room available (read, suites) at check in, get free breakfast, and a metal card you can drop on the counter and make a clanging noise.
I have Lifetime Platinum, with well over 500 nights— closer to 700. At $140 per night (the average hotel room rate in the US according to Statista.com) that puts my total spend with Starwood at $100,000. And counting, I write this on a Southwest flight traveling to a Starwood suite at my Denver hotel.
Why Starwood? There are a few reasons. Mostly, I like the suites. Second, I like Starwood’s vibe. Third, a front desk clerk upgraded me out of pity on my first stay — and like a body builder to steroids— I was hooked.
In the last blog post, I wrote of the benefits in creating clients for life. When you land a client, and they book you for their event year in and year out, that’s one less part of the schedule you need to worry about. Let’s face it, having your own business, not really knowing where the next paycheck comes from (or when) is the hardest part of being an entrepreneur. In fact, it’s what prevents most people from starting their business. What if you could mitigate that stress? How would that change how you view your business and the plans you make?
Let’s look at one client, who hires you for one event, for the typical 2.5-day (20-hour total) conference. To land that client, you had to spend some money. Maybe PPC (pay per click) advertising on google. Maybe a fee to a third party booking source — like Thumbtack. Perhaps a referral premium to someone. Plus, don’t forget costs for equipment to shoot the event, travel expenses, expensive venue food you’re gobbling down while working, dry cleaning your work outfit, cat sitter for the monster you call you’re best buddy, web optimization fees from your leech of a web guy, insurance coverage demanded by the venue, cell phone, hotspot, social media ads— wow, the expenses just pile up, higher and higher. I just depressed myself.
Let’s say you charge a flat rate of $100 per hour, so the bill to your client for this event is $2,500 for that job. I would argue, at MOST, you’ll earn $1,000 in profit. Maybe. And it’s a lot of work for a demanding client that you’ve spent another 4 hours hand holding on conference calls.
Now, fast forward a year. The client books again—exactly the same event, basically the same schedule. What happens? You’ve already spent the money recruiting that client and paid for it out of that first event. You know the schedule, the preplanning is now two hours, not four. Referral fees— gone. Basically, your expenses drop by a couple of hundred dollars, bringing your profit up to $1,200. Same job, with a 20% gain on profit by virtue of it repeating. Now, what if you work that job for 5 years, at the same rate, adjusting for inflation? $1,000 profit the first year, 1,200 for four years, means that client will earn you $5,800 in profit instead of $1,000 for the same initial investment.
Now, Let’s take that same client, and the same event, and make it happen twice per year? That suddenly brings you to a profit of $11,800.
So….
What makes more sense, and sets you up for success? Running after new clients, or actively recruiting clients for life? What is better, $12,000 profit or 1,000? Hmmm, it’s a mystery!
But I’ve added in another part of the equation, haven’t I? It seems, under this business model, your smart road to profitability is not just seeking clients for life, but also seeking “core clients”.
What are “core clients”? They are your clients that are both booking you year in and year out AND booking multiple events during the year. The more core clients you have, the more your profits can multiply.
How do you get these clients? You ask for them. You INVITE them. Yes, it’s that simple.
Different industries take different approaches, but they all boil down to the same thing: nudge existing clients into becoming core clients by offering perks. Things you’ll do for that customer that is beyond the standard. The hotel industry offers upgraded rooms, beverage credits, fruit delivered to your room. Airlines by giving away free flights, companion passes, or upgrades. Grocery stores with their frequent shopper cards, even restaurants with lunch clubs. So, if ALL industries are encouraging loyalty, why would you be any different? Better, how many of your competitors have any policies in place to encourage loyalty?
You know, I have a friend who is a high-end stripper. Do you realize she has a loyalty program in place? Why do you think Trump was(is?) such a frequent client?
No, not really. I mean, I’m not friends with Stormy Daniels. But she MUST have a loyalty program given Donald’s thrifty nature and his frequent, um, patronage.
The lesson? Be the Stormy Daniels of photography, and not the “Girls! Girls! Girls! Stripper at the corner bar. And, like a good stripper, look for those repeat clients and throw in an extra lap dance once in a while. You’ll be the one smiling as you deposit the checks.
Featured image: My partner (the tall one), Matthew, and I at a green screen photography shoot in Los Angeles. Matthew flies free on Southwest when he flies with me, because I hold a Companion Pass. Since he owns the business with me, it means we get two for one airfare. Since we work all over the country together, we utilize that perk about 30 trips a year. At $400 per round trip ticket, that saves us about $12,000 a year on flights.
Author
Mike Gatty is owner of US Event Photos, a national experiential photo marketing company. He started his career in photography on September 12, 2001, photographing the rescue operations at Ground Zero, then worked as a US Senate Gallery Press Photographer, and finally launched US Event Photos, working nationally for the past dozen years. The business, originally founded by his mother (who was a White House Photographer and worked on Capitol Hill since the Carter Administration) now helps large firms — including HBO and the Travel and Adventure Series — leverage experiential photo marketing at events world wide. He lives with his partner, Matthew Frey, also a principal in the business, on the Gulf coast near Tampa, FL.
