November 14, 2011 at 12:07 PM

This concept is extraordinarily simple, yet it results in nothing less than a guaranteed future cash flow. 

It can be applied to any business that offers a continuing service (maintenance, cleaning, etc.), or a continuity-type product such as a newsletter.

The way it works is this:  you get the customer started by offering the first instalment free, or at very low cost, with the understanding in advance that if they like the product or service, the customer will continue at an agreed-upon price for a year or, even better, forever!

Consider a  carpet cleaning business that offers new customers a free cleaning of one room, provided the customer agrees in advance that should they be happy with the work, they will sign up for regular cleanings four times a year and will be automatically billed to their credit card.

This is what’s called “TFN”  — ‘til further notice.  The business simply keeps on billing until the customer cancels.

Do you see what this accomplishes? Instead of waiting for customers to call when they need carpet cleaning, the company is now guaranteed that the customer will pay for a cleaning four times a year.

All the company has to do is call the customer each season to schedule the cleaning and then just write up the charge slip.

Naturally, the company will lose money giving out free cleanings on the initial sale. 

However, the loss will be more than compensated by the back-end profit made from the four-times-a-year cleanings — especially since the marketing cost for the future cleanings are zero.

This is what we call second dimension thinking.